The formation of value-base payment models is the latest front in an ongoing struggle over whether to risk-adjust healthcare service reimbursement for socio-economic status.
Who pays for the medical maladies that poverty inflicts or inflames?
As the healthcare industry begins a historic shift from payment for services based on volume to payment based on value, providers serving economically disadvantaged communities are bracing for an existential financial blow.
"Anyone who serves a disadvantaged population is going to go under," says Barbara McAneny, MD, chairperson of the American Medical Association's Board of Trustees.
Based in Albuquerque, the practicing oncologist serves patients across New Mexico. McAneny's Gallup clinic treats many patients who live in poverty on Native-American reservations. "People have to decide between paying co-pays and buying food. They know what they have to do, but don't have the resources to do it," she says. Most oncology patients from the reservations have comorbidities and delay care until their health conditions have degraded to acute stages, as opposed to oncology patients from affluent Albuquerque suburbs who tend to be fundamentally healthier, McAneny says.
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"The difference is not something we can control."
She says physicians who serve economically disadvantaged communities are anticipating a Dickensian nightmare as the Centers for Medicare & Medicaid Services crafts replacement payment methodologies for the long-reviled Sustained Growth Rate formula. Under SGR repeal-and-replace legislation enacted earlier this year, CMS officials are designing new value-based payment mechanisms through the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). Unless MIPS and APMs are risk-adjusted for socio-economic status, physician practices in disadvantaged inner-city neighborhoods and rural communities face crippling financial losses, McAneny says.
"They are just hanging on to stay alive now."
With Medicare and other major payers cautious about risk-adjusting value-based payment models for socioeconomic status, patients such as Tiny Tim's character in A Christmas Carol by Charles Dickens likely will be an unwelcomed sight hobbling into a hospital or physician practice in the early phases of the shift from volume to value.
Historical Precedent
The poor of 19th century London faced health-compromising living conditions similar to the hazards that the impoverished face in 21st century America, including exposure to environmental hazards, limited access to affordable healthcare services, and nutritional deficiencies.
The connection between poverty and increased risk for medical maladies is undeniable, says Otis Brawley, MD, chief medical officer of the Atlanta-based American Cancer Society and a top healthcare-disparity researcher. "The poor are more likely to live in impoverished areas. They are more likely to live down wind of factory exhaust, in smog-filled developments. There is even a correlation between living in crowded apartments with roach droppings and childhood asthma."
Consequently, "the poor are more likely to have cardiovascular disease, diabetes, cancer, asthma, and a number more acute diseases. Poverty is linked to increased risk of getting disease and being less able to deal with the consequences of the disease afterwards," he says.
But establishing and maintaining a high level of overall health is a longshot for impoverished Americans, Brawley says.
"Rather than saying poverty is causing a number of illnesses—and it is—let's focus on the fact that the middle and upper classes are more able to prevent these diseases… The poor are less likely to get healthcare services, both preventive counseling and effective treatment."
Otis Brawley, MD |
"If those services are available, the poor are less likely to be able to understand and follow what can be complex instructions. There are even studies to show that the impoverished are more likely to miss appointments and fail to adhere to therapies. This can be due to [family and other] obligations as well as logistical issues such as lack of transportation.
"The thing about poverty that perhaps most drives disease is lack of education," Brawley says. "About 30% of Americans with a high-school education or lower smoke tobacco. Among college graduates, it's less than 5%. Smoking is associated with a number of chronic diseases. The children of smokers are more likely to have asthma. Obesity is a far greater issue among the impoverished versus the middleclass. This is not to say it is not an issue for the middleclass, [rather] it's disproportionately bad among the poor."
When designing MIPS and other value-based payment mechanisms, CMS and commercial health plans should take the additional costs of serving disadvantaged communities into account, Brawley argues.
"A successful healthcare system will have to recognize the additional challenges of getting care to the impoverished. These include the challenges of providing preventive care as well as treatment once a patient has been diagnosed. Some studies have suggested that the poor benefit more from patient navigation and counseling services. This involves personnel beyond the normal healthcare provider to spend time counseling the patient."
Risk-adjustment for socio-economic status should be part of value-driven payment models, says the CEO of Nashville-based DW Franklin Consulting Group, C. Timothy Gary, JD, MBA. "A value-based model can work, but it absolutely has to be adjusted for local demographics. [In disadvantaged communities,] you cannot count on the patients to have the support infrastructure in place; you cannot count on patients to follow the course of care. It's hard for them to get back to follow-up visits to their doctors. There's a shortage of physical-therapy facilities in these communities."
'An Entirely Different Mindset on the Costs'
Healthcare providers fear CMS and commercial payers will not risk-adjust value-based payment models broadly enough, including failure to account for the health-shattering impact of poverty, he says. "CMS tends to take a meat-cleaver approach when they need a scalpel… It's very similar to what we saw in the 1980s, when we moved to capitated payment rates. Providers went into deals without understanding the cost of care and the contributing factors to outlier cases… Doctors have a healthy degree of suspicion about the reimbursement models that are being crafted, and rightfully so."
Some patients, such as disabled, malnourished children like the Dickens character Tiny Tim, who grow up in grinding poverty, probably are not appropriate for participation in value-based payment models, Gary says.
"High-touch cases really don't fit into a risk-based model. There's an entirely different mindset on the costs," he says. "Higher-touch patients are a costly group that can drive costs… Providers will either eat the costs or avoid caring for that group of patients."
On Dec. 3, the Washington, DC-based National Quality Forum announced the roster of the nonprofit organization's 22-member Disparities Standing Committee. A "key focus" of the panel will be to review the findings of an ongoing two-year trial that is designed to determine whether quality metrics should be adjusted for socio-economic status and other demographic factors, according to a prepared statement from NQF. The committee is expected to make recommendations to the NQF board in 2017.
As Dickens illustrated in A Christmas Carol, accounting for the needs of the poor can be a matter of life or death, Gary says. "One way Scrooge goes, Tiny Tim lives. The other way Scrooge goes, Tiny Tim dies."
Christopher Cheney is the CMO editor at HealthLeaders.