How HCOs are leveraging alternative payment models to address SDoH
Earlier this year, the U.S. Department of the Treasury announced a significant funding opportunity for states and local governments looking to invest in social determinants of health (SDoH). The opportunity stems from a little-known provision in the Bipartisan Budget Act of 2018: the Social Impact Partnerships to Pay for Results Act (SIPPRA). Of the $100 million appropriated under the law, the Treasury Department has allocated nearly $66.3 million to finance outcomes-based payments for “social impact partnership projects.”
This announcement brings the healthcare industry a step closer to value-based care. As healthcare organizations continue to consider alternative payment models and other sources of funding for SDoH initiatives, healthcare organizations are beginning to find different ways to facilitate collaboration between clinical and nonclinical organizations.
Adopting alternative payment models to improve health outcomes
Blue Cross Blue Shield Association (BCBSA), for example, recently announced that its Blue Distinction Total Care program, which is the industry’s largest national network of accountable care organizations (ACOs) and patient-centered medical homes (PCMHs), is benefiting from alternative payment models as participating providers have outperformed other providers in key care quality and patient health metrics since its launch in 2015.
The program focuses on prevention and wellness, disease management and better-coordinated care. The payer supports participating providers with data-sharing to aid in care coordination, disease management, and patient care monitoring. Providers are then rewarded for their quality of care with higher reimbursement.
In the first three years of the program, management of chronic conditions like diabetes, asthma and cardiovascular disease improved, according to BCBSA, which reported participating physicians, hospitals and clinical care teams reduced costs 35 percent and performed better than non-participating providers in 96 percent of the nationally-consistent, industry quality measures tracked. Such measures included:
- 275,000, or 10 percent, fewer emergency department visits
- 7 percent better HbA1c testing for diabetes patients
- 5 percent better adherence to medications for patients with cardiovascular disease
- 15 percent decline in hospitalizations year-over-year
Value-based care payments support collaboration on SDoH
While the Blue Distinction Total Care program did not specifically address SDoH, the initiative required collaboration between payers and providers and focused on care coordination and overcoming adherence obstacles that lead to unnecessary ED visits and hospitalizations. Numerous SDoH are often the cause for patients being unable to adhere to care plans and are responsible for 60 percent of health outcomes.
Research is showing overcoming SDoH obstacles requires the collaboration of providers, payers and community-based organizations (CBOs) under an alternative payment structure. For example, the Ohio Department of Medicaid operates a managed care program in partnership with five commercial health plans in the state who receive a capitated payment for each beneficiary. The health plans, in turn, enter into value-based care reimbursement contracts with providers, who often care for patient populations with numerous SDoH obstacles.
According to a study by the Ohio Association of Health Plans, this collaborative managed care program has been highly successful based on quality and financial metrics. For example, the capitated rates paid to the health plans were 13.9 to 16.8 percent lower in 2016 through 2017 than the cost of serving traditional fee-for-service beneficiaries, saving the state as much as $4.4 billion.
Savings were achieved, according to the study, because the capitated payment afforded the health plans flexibility in how they targeted patient populations and SDoH. By using a multifaceted approach, the health plans partnered with CBOs to confront SDoH such as food insecurity, job training, transportation, health education, behavioral health and others. The health plans achieved higher average quality scores than both national Medicaid average and the average for other Medicaid managed care programs in other large states.
To learn more about adopting alternative payment models to address SDoH, download our white paper, Incentivizing Collaboration Between HCOs and CBOs. This white paper explores the impact of alternative payment models and how they can foster collaborative solutions between healthcare organizations (HCOs) and CBOs to improve health outcomes.