Report to Congress: Social Risk Factors and Performance Under Medicare’s Value-Based Purchasing Programs
United States Department of Health and Human Services
Office of the Assistant Secretary for Planning and Evaluation, December 2016
There is growing recognition that social risk factors – such as income, education, race and ethnicity, employment, community resources, and social support – play a major role in health. Despite ongoing efforts, significant gaps remain in health and in life expectancy based on income, race, ethnicity, and community environment.
At the same time, the health care system is increasingly moving towards higher levels of provider accountability for the quality, outcomes, and costs of care. Value-based or alternative payment models, which tie payment to the quality and efficiency of health care delivered, are in place in nearly all Medicare settings, including in hospitals, outpatient settings, and post-acute facilities.
These two issues are intersecting. If beneficiaries with social risk factors have worse health outcomes because the providers they see provide low-quality care, value-based purchasing could be a powerful tool to drive improvements in care and reduce health disparities. However, if beneficiaries with social risk factors have worse health outcomes because of elements beyond the quality of care provided, such as the social risk factors themselves, value-based payment models could do just the opposite. If providers have limited ability to influence health outcomes for beneficiaries with social risk factors, they may become reluctant to care for beneficiaries with social risk factors, out of fear of incurring penalties due to factors they have limited ability to influence.
This report, mandated by the Improving Medicare Post-Acute Care Transformation Act of 2014 or the IMPACT Act (P.L. 113-185), shares empirical analysis using existing Medicare data to help address these questions and provides considerations for policymakers while additional work using other data sources continues.
FINDING 1: Beneficiaries with social risk factors had worse outcomes on many quality measures, regardless of the providers they saw, and dual enrollment status was the most powerful predictor of poor outcomes.
FINDING 2: Providers that disproportionately served beneficiaries with social risk factors tended to have worse performance on quality measures, even after accounting for their beneficiary mix. Under all five value-based purchasing programs in which penalties are currently assessed, these providers experienced somewhat higher penalties than did providers serving fewer beneficiaries with social risk factors.
Strategies and Considerations
STRATEGY 1: Measure and Report Quality for Beneficiaries with Social Risk Factors
Consideration 1: Consider enhancing data collection and developing statistical techniques to allow measurement and reporting of performance for beneficiaries with social risk factors on key quality and resource use measures.
Consideration 2: Consider developing and introducing health equity measures or domains into existing payment programs to measure disparities and incent a focus on reducing them.
Consideration 3: Prospectively monitor the financial impact of Medicare payment programs on providers disproportionately serving beneficiaries with social risk factors.
STRATEGY 2: Set High, Fair Quality Standards for All Beneficiaries
Consideration 1: Measures should be examined to determine if adjustment for social risk factors is appropriate; this determination will depend on the measure and its empirical relationship to social risk factors.
Consideration 2: The measure development community should continue to study program measures to determine whether differences in health status might underlie the observed relationships between social risk and performance, and whether better adjustment for health status might improve the ability to differentiate true differences in performance between providers.
STRATEGY 3: Reward and Support Better Outcomes for Beneficiaries with Social Risk Factors
Consideration 1: Consider creating targeted financial incentives within value-based purchasing programs to reward achievement of high quality and good outcomes, or significant improvement, among beneficiaries with social risk factors.
Consideration 2: Consider using existing or new quality improvement programs to provide targeted support and technical assistance to providers that serve beneficiaries with social risk factors.
Consideration 3: Consider developing demonstrations or models focusing on care innovations that may help achieve better outcomes for beneficiaries with social risk factors.
Consideration 4: Consider further research to examine the costs of achieving good outcomes for beneficiaries with social risk factors and to determine whether current payments adequately account for any differences in care needs.
Social factors are powerful determinants of health. In Medicare, beneficiaries with social risk factors have worse outcomes on many quality measures, including measures of processes of care, intermediate outcomes, outcomes, safety, and patient/consumer experience, as well as higher costs and resource use. Beneficiaries with social risk factors may have poorer outcomes due to higher levels of medical risk, worse living environments, greater challenges in adherence and lifestyle, and/or bias or discrimination. Providers serving these beneficiaries may have poorer performance due to fewer resources, more challenging clinical workloads, lower levels of community support, or worse quality.
The scope, reach, and financial risk associated with value-based and alternative payment models continue to widen. There are three key strategies that should be considered as Medicare aims to administer fair, balanced programs that promote quality and value, provide incentives to reduce disparities, and avoid inappropriately penalizing providers that serve beneficiaries with social risk factors. Measuring and reporting quality for beneficiaries with social risk factors, setting high, fair quality standards for all beneficiaries, and the provision of targeted rewards and supports for better outcomes for beneficiaries with social risk factors, may help ensure that all Medicare beneficiaries can achieve the best health outcomes possible.
The findings outlined in this report represent only the beginning of a body of necessary work around fair and accurate quality measurement in the context of Medicare’s increasing use of value-based purchasing programs. The IMPACT Act lays out specific additional requirements for Study B, including the examination of specific social risk factors not currently available in Medicare data such as health literacy, limited English proficiency, and Medicare beneficiary activation (the degree to which beneficiaries have the knowledge, skill, and confidence to manage their health and health care). Based on the findings in this report, future work may also include examining the impact of measuring and accounting for functional status or frailty on the relationship between social risk factors and performance, and identifying care innovations associated with the achievement of good health outcomes for beneficiaries with social risk factors.
Full report (374 pages):
By Don McCanne, M.D.
One of the problems with the various pay-for-performance schemes is that social risk factors play a major role in health care outcomes. Dedicated physicians and hospitals who take care of patients with greater social risks tend to be penalized for factors over which they have no direct control. This 374 page ASPE report was generated at the request of Congress to define this problem and consider solutions.
Skim reading this report leads to the conclusion that the approach to evaluating the role of social risk factors in payment systems using value-based purchasing, alternative payments models and other forms of payment innovation results in profound administrative complexity, with all of its waste, and yet it is still not very effective in correcting payment injustices. And this 374 pages is only the bare beginning of a “a body of necessary work around fair and accurate quality measurement in the context of Medicare’s increasing use of value-based purchasing programs.”
We continue to head down the wrong path. Our target should be to establish universality in health care while financing the system equitably with a system that reduces administrative waste. Instead you would think, based on the responses of the policy community and government bureaucrats, that the problem is that we do not have enough administrative oversight, so they propose more and more and more!
Instead we should reduce administrative waste by establishing a single payer national health program and improve value through global budgets, negotiated payment rates, and administered pricing, plus separate budgeting of capital distribution and system capacity. The latter should help to improve care for patients with higher social risk factors, though we do need to improve social programs that would better address the fundamental factors resulting in otherwise amenable social risks.