Financial incentives to reduce health care disparities have potential, but require greater buy-in from leaders and policymakers

(CHICAGO, IL) October 10, 2018—If done right, financial incentives and payment reform can help reduce disparities in health care, a Robert Wood Johnson Foundation program has concluded—but only with greater buy-in from policymakers and the health care leaders.

Three grantees of Finding Answers: Solving Disparities Through Payment and Delivery System Reform, a national program of the Robert Wood Johnson Foundation, recently concluded projects using payment and delivery system reform to reduce disparities in health and health care. Now, Finding Answers has released a report to help other organizations do the same.

After 13 years of experimental pilot projects, Finding Answers has pinpointed the leaders of health systems and payer organizations—including heads of state Medicaid programs—as key to changing how vulnerable groups are cared for.

“We know a lot about what works to reduce disparities in health care,” says Finding Answers Director Marshall Chin, MD, MPH. “But it takes prioritization, work, readjustment, and persistence. Giving these projects authority and staying power requires commitment from the C-suite. It means restructuring payment to support and incentivize the reduction of disparities. Utilizing value-based payment reforms to give organizations the resources and incentives they need to address disparities is a critical next step.”

When Finding Answers initially sought grantees in 2014, very few applicants submitted proposals that actually included a payment reform component to reduce disparities. But after three years, there are some notable successes and several key findings.

The grantees included Mount Sinai Health System in Manhattan, Advantage Dental, a Medicaid dental health plan in rural Oregon that used field-based dental hygienists and a team incentive structure to reach low-income patients; and the Community Health Care Network safety-net health system in northern Virginia that used a team incentive to motivate improved care for non-Hispanic minorities. The key takeaways include:

• Designing and implementing effective financial incentives to reduce disparities has potential but is more complex than anticipated. Financial incentives are information-technology-intensive to implement, and an incorrectly designed financial incentive system can discourage staff. Integrated payment and delivery reforms to address disparities need to be tailored to the organizations and settings. There is no one-size-fits-all answer.
• There are many benefits of team-level incentives. One of the advantages is that they can encourage integrated care management as team members strive toward a common goal.
• Data management is critical. Revealing and combating health care disparities requires sustained collection, integration and reporting of race, ethnicity and language (REL) or other key demographic data.
• There are factors other than money that health care teams find motivating. Seeing positive movement in reduction of a disparity and related quality of care measures, for example, may be more motivating to some health care team members than a financial incentive.
• Patient navigators and case workers (especially those who share language, identity, or heritage with a vulnerable group) can make a big difference in disparities—if their positions are funded. Flexible funding models and high-level commitment are necessary to ensure their success. Much work remains in changing policy and practice so that payers cover peer-based models.
• Institutions, leaders, and individual team members must buy in. Policy change and value-based payment systems can encourage health care leaders to prioritize disparities reduction in a sustained way—and make it financially viable to do so. They can also incentivize the hard work of culture change necessary to address disparities.
• Providers and other health care team members are usually surprised about disparities in their patient care. But once they find out, they are highly motivated to do something about it. New financial models might make it more possible to do so, especially when aligned with state Medicaid programs and federal policies.

Click here to see a full report of the lessons learned.

In one of the projects, designed to improve postpartum care for the most disadvantaged women giving birth at Mount Sinai Hospital, OB-GYN Elizabeth Howell MD, MPP enlisted Healthfirst, a Medicaid Managed Care plan. Healthfirst had a stake in improving the rate of postpartum care for its patients, partly because it’s a statistic by which the plan is measured by New York state. Mount Sinai and Healthfirst pooled their resources and hired people to guide new mothers on Medicaid toward postpartum care. They also paid doctors extra for conducting a postpartum checkup with these patients. Although results are still being finalized, the project has shown positive results: 74 percent of women on Healthfirst plans, many of whom are Hispanic, came back for care in the 3–8 weeks after giving birth, compared with 58 percent before the program started.

“Health plans will need the outcomes from studies like this to create the business case to justify future and ongoing investments in transforming practice processes through innovative interventions,” says Susan Beane, MD, Vice President and Medical Director of Healthfirst.

Indeed, Finding Answers program participants learned a great deal, and some achieved good results—yet it proved hard to keep these interventions going through the constant massive changes in the health care sector, Dr. Chin says. “We need another layer of motivation. We need Medicaid, Medicare, and private payer policies that support and incentivize disparities reduction among managed care organizations and health systems. And we need the highest-level decision- makers on board within health systems and managed care organizations.”

According to Jennifer E. Moore, PhD, RN, Executive Director of the Institute for Medicaid Innovation, progress is being made. “The outcomes and lessons learned from the previously funded Finding Answers projects and IMI’s experience leading multi-stakeholder learning collaboratives provide important initial lessons about integrating payment and health care delivery reforms. We must support direct collaboration between Medicaid managed care organizations and providers to address health and health care disparities. Including state Medicaid agencies in partnership with Medicaid health plans in this type of proactive collaboration is an important next step that has the potential to significantly expand the impact of these lessons.”

Find out more about Finding Answers’ work in payment reform.