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The healthcare system has been working for years to find ways to advance health equity, improve health outcomes, and curb rising health costs. One way to create this change is to partner with care providers and pay them for improving their patients’ health outcomes, otherwise known as value-based care. When value-based care contracts are created with an emphasis on improving healthcare access and health equity, they can help level the playing field for everyone.

Working toward equitable healthcare, access, and outcomes is the right thing to do for individuals and communities, especially for historically marginalized people. Health inequities are extremely costly for society: A 2022 Deloitte study found that health inequities cost the United States around $320 billion in annual healthcare spending, which could grow to more than $1 trillion by 2040. Individually, that could drive up the cost of healthcare for the average person in the U.S.

What is Value-Based Care?

Value-based care prioritizes preventive services that keep people healthier. It encourages care that drives the best possible outcomes for any one individual patient and helps to personalize care. Value-based care contracts can help reduce other healthcare inefficiencies and wasteful practices that are not proven to improve outcomes nor patient experiences and can drive up costs. These contracts help align health plans and care providers to address the health of the people they serve by shifting the focus from volume of services performed to improved health outcomes.

Value-based contracts account for approximately 63% of Elevance Health’s medical spend among all health product lines and are a key aspect of the company’s business strategy. Changes made by the Centers for Medicare and Medicaid Services (CMS) in 2012 opened the door to incorporate value-based care contracts with care providers serving people covered by Medicare and Medicaid. In addition to a focus on individual health outcomes, value-based care models can include a focus on health equity outcomes.

“When we have access to health equity data, we can use it appropriately to better align value-based programs to members’ specific needs,” said Bryony Winn, president of health solutions for Elevance Health.  “For example, in one of our Medicaid value-based care programs, our care provider partners receive payment for specific health equity-related measures. This includes screening members and referring them to community organizations that can help with transportation, food, and housing needs. Since 2020, nearly 41,000 members have been screened and 14,000 members have been referred to community-based organizations.”

How Outcomes Are Measured

Elevance Health-affiliated health plans include a range of actionable measures and goals in their value-based contracts. Care providers are given current data on their performance against these goals as a baseline. Their reimbursement is then based on their data-demonstrated improved health outcomes achieved over the time period specified in the value-based contract.

Some of the contract measures include follow-up appointments after hospitalizations for mental health conditions, diagnosis codes that include referrals to community-based organizations, and postpartum follow-up visits for Black women who were experiencing high blood pressure while pregnant. These goals encourage provider partners to address health-related social needs (HRSNs) as part of care and services. A number of these measures align with national recommendations by CMS as well as the National Committee on Quality Assurance (NCQA).

To boost awareness of health equity measures among providers participating in Elevance Health-affiliated plans’ quality incentive programs, reporting measures include follow-ups to emergency department visits for substance use, pharmacotherapy for opioid use disorder, well-child visits, breast cancer screening and more. Industry best practices also include increasing upfront reimbursement for providers caring for socially vulnerable populations as well as screening patients for unmet HRSNs, then partnering with community-based organizations to address those needs.

Collaboration to Improve Health Outcomes for Everyone

While value-based care can drive down costs and increase process efficiencies and quality, the ultimate goal should be creating better health outcomes for everyone, regardless of their background, said Dr. Elizabeth Teisberg, executive director of the Value Institute for Health and Care at Dell Medical School and McCombs School of Business at the University of Texas-Austin. “We can achieve health and care equity only if we prioritize ending disparity in health outcomes,” she said.

This approach requires collaboration between payers, providers, patients, and community-based organizations to create and measure better health outcomes and develop a true understanding of the outcomes that matter most to people. “Measuring what matters requires knowing what matters, and we won’t know unless we ask,” Teisberg said. “We can achieve equity only if we listen to and honor differences in how people identify themselves, their priorities, and their lived experiences and circumstances.”

Communicating the Value of Value-Based Care

While care providers and the health system appreciate the value-based care model, it matters little to individuals unless it improves their overall experience. Value-based care incentivizes care providers to spend extra time understanding and resolving patient concerns and improve the patient experience with care coordination services. These kinds of changes are helping to re-establish trust with a system that has historically excluded or marginalized some people.

“A new challenge is communicating these exciting but complicated new types of healthcare models to the communities who trust the healthcare system the least — and we have not done a great job at that,” said William Bleser, research director at Duke’s Health Care Transformation for Population Health, Social Needs, and Health Equity project. “We need to do a better job so that we can improve the health and resiliency of all communities,” he said.

“Value-based care has the potential to really move the needle. Incentives are powerful motivators, but it is critical to understand the physical, behavioral, and social aspects of someone’s health in order to offer the right programs and support,” Winn said. “We need to make it easier for people to access services that are individualized to their care and community needs and demonstrate cultural humility. When we meet people where they are, we can have a greater impact on the whole health of our members.”

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