We need health care models that pay for equity, not just “pay for performance”

Over the past few years, public payers like Medicare have started to prioritize payment models that reward doctors for performance, rather than for volume. This pattern is likely to accelerate with the Biden administration; recently, Dr. Elizabeth Fowler, director of the Center for Medicare & Medicaid Innovation (CMMI) said the agency was looking to make more of their value-based care models mandatory.

The movement away from fee-for-service payment in Medicare is encouraging. But as many experts have pointed out, our current value-based payment models have a huge blind spot when it comes to equity. These payment systems also don’t reward hospitals for reducing racial health disparities; in fact, they may exacerbate disparities, because safety net hospitals and hospitals caring for Black patients get financially penalized in certain value-based models.

In a recent JAMA viewpoint, Dr. Joshua Liao of the University of Washington School of Medicine, and Dr. Risa Lavizzo-Mourey and Dr. Amol Navathe of the Perelman School of Medicine provide a roadmap for how value-based payment models can prioritize and advance health equity. Here are a few of the key takeaways:

• Pay for equity. To advance equity, CMS will have to pay for equity, and set national long-term “pay for equity” goals, in the same way they previously set goals for “pay for performance.” These could include a deadline for incorporating equity benchmarks into performance metrics, and tying reimbursement to meeting these deadlines.
• Define equity as part of value. Currently, CMS’ definition of high-value care is only defined as care that improves quality or decreases spending. CMS should incorporate equity into definitions of value, so that improvements in quality or decreased spending are not only helping a subset of patients. This would then allow policymakers to evaluate the impact of value-based models on health disparities to ensure that all patients benefit. For example, policymakers could conduct an “equity audit”to examine how the bundled payments program impacted the rates of elective joint replacement surgery, skilled nursing facility use, and surgical complications for people of color compared to white patients.
• Create an equity agenda. The authors argue that we need a multidisciplinary group of “clinicians, insurers, community organizations, and patient advocates” to guide policymakers toward achieving equity goals. Part of the equity agenda could be directing CMS to collect valuable data on patient demographics, socioeconomic status, and other factors that drive disparities.

The authors acknowledge that these policies would be just a start, but they would help set the government’s intention to pay for equity. In the same way that paying for performance has become commonplace, paying for equity can be part of the payment landscape as well — if we commit to starting the work now.