Paper of the week: 22.08.18

Muir Gray’s paper of the week: Time for Value-Based Payment Models to Adopt a Disparities-Sensitive Frame Shift

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Reference: Chaiyachati KH, Bhatt J, Zhu JM. Time for Value-Based Payment Models to Adopt a Disparities-Sensitive Frame Shift. Ann Intern Med. 2018;168:509–510. doi: 10.7326/M17-2590

Bottom line, chosen by Muir from the paper

The health care industry cannot ignore true instances of poor quality, but it also should not worsen health care for at-risk populations. To address this tension, value-based payment models should adopt a disparities-sensitive frame shift to integrate measures of equity into hospitals’ financial calculus, incentivizing hospitals to tackle the disparities challenge without losing sight of quality. Achieving this frame shift requires us to continue determining which metrics matter most when addressing disparities in health care delivery and outcomes, both to improve risk adjustment and to establish which measures are actionable. To avoid underpaying hospitals that disproportionately serve socially at-risk patients, we should assess how risk adjustments would perform if they accounted for factors like socioeconomic position, social relationships, and community context, which the National Academy of Medicine has identified as key domains affecting health care outcomes.(1)

(1)National Academies of Sciences, Engineering, and Medicine. Accounting for Social Risk Factors in Medicare Payment: Identifying Social Risk Factors. Washington, DC: National Academies Pr; 2016.

Implications for value improvement

Inequity lowers value

The term value has significantly different meanings in the USA and in countries committed to universal health coverage. In 2008 an influential article was published from Harvard Business School with the key definition given below:

“Value in any field must be defined around the customer, not the supplier… the proper objective is the value of health care delivery, or the patient health outcomes relative to the total cost (inputs) of attaining those outcomes.”

Source: Porter, M.E. (2008) What is Value in Health Care? Harvard Business School. Institute for Strategy and Competitiveness. White Paper.

However, this would be classified as efficiency in any country committed to covering the population with a finite budget.  In the United States there is not a commitment to cover the whole population from a finite budget and therefore the allocation of resources is not made explicitly.  Neither is there explicit concern for inequity in populations underserved, who may derive more value than the people being treated. In fact a hospital that wants to be rewarded for efficiency might be prejudiced against people from the most deprived sections of the population because they may need longer to recover and therefore need a longer duration of stay for social reasons, so care needs to be taken that measures of quality and efficiency not only take into account the population served by the hospital but also are encouraged to ensure that access to care from the most deprived populations is at least as high as access from the least deprived even though the hospital has to expend more effort and therefore more cost to achieve this.