Download Building a Framework for Paying for Social Determinants of Health

A Framework for Paying for
Social Determinants of Health
Presentation for SNP Alliance
October 11, 2013
Purpose of Paper

Current MA P4P increases resources for plans that provide better quality
care and reduces resources for plans when disparities are measured

Recent paper commissioned by Amerigroup (now Wellpoint) suggests:

Current MA P4P could disadvantage plans that serve a disproportionate share of
beneficiaries with LOW socioeconomic status (SES)


Solutions include adjusting more MA quality measures for case mix (including
SES) and rewarding quality improvement
This paper looks more broadly at how Medicare payment can be designed to
reflect socioeconomic status and related “downstream” factors
Characteristics of SNPs

SNPs enroll a disproportionate share of dual eligibles


Dual eligibles have higher poverty, high prevalence of no high school
education, more racial and ethnic representation, miniscule rates of retiree
coverage


90% SNPs vs 20% FFS
i.e., low socioeconomic status
SNPs have perspective and experience that can help educate policymakers
about the effects of socioeconomic status on health

SNP experience can inform design of health policy solutions for Congress
Socioeconomic Status Affects Health

Research concludes SES plays a significant role in a person’s health



Research has found a host of social factors “downstream” from SES that affect
health


Low SES affects how individuals use health care and their health outcomes
SES deemed a “determinant” of health, like biological factors – age, sex, genetics
 Differences in SES and related factors can lead to disparities in health outcomes
Health literacy, access to transportation/social supports, health behaviors,
neighborhood
Many but not all downstream factors within sphere of influence of health
system

SES not within sphere of influence of health system but can help identify/target
interventions that reduce SES-related health disparities
Conceptual Framework for Determinants of Health
Age, Sex, Genetics
SOCIAL DETERMINANTS
Socio-economic Status
(SES)
Race/Ethnicity/Culture
Neighborhood
MEDIATORS/MODERATORS:
Health Literacy/Language
Transportation/Social Supports
BEHAVIORS:
USE OF CARE:
Smoking
Diet/Nutrition/Exercise
Substance Abuse
Preventive Screenings
Doctor vs ER Visits
Treatment Adherence
MEDICAL
ILLNESS:
z
Acute/Chronic
OUTCOMES:
Quality and Cost of Care
CONDITIONS:
Drug Dependence, Frailty
Homelessness
Scope of Health Plan
BIOLOGICAL DETERMINANTS:
Twelve Social Factors of Concern to SNPs

SNP Alliance identified 12 social factors that they view as most challenging
for beneficiaries and plans in the care delivery process
Criteria Could Help Select Social Factors for
Medicare Payment

Criteria could be applied to SNP identified factors and universe of social
factors found to affect health in order to select ones most appropriate for
Medicare payment

Strong base of evidence that social determinant affects health

Complexity/severity of illness is increased by social determinant

Proximity to providers and plans, i.e., within sphere of influence of health system

Social determinant links to other social factors for possible spill-over effects

Degree of social/political acceptance of need to address
Role of Race and Ethnicity

Racial and ethnic groups are a growing part of the Medicare population

SNPs enroll racial/ethnic groups at higher rates than traditional Medicare and non-SNP MA plans

Minorities experience worse outcomes (greater illness and mortality) than non-minorities

Focus of social epidemiological research has been on racial/ethnic health disparities , more than
SES health disparities

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Institute of Medicine concerned that some racial/ethnic health disparities stem from discrimination in the
health system
A goal of this Administration is to reduce disparities in wages, health care, social justice
Relationship between race/ethnicity and health is complicated by strong correlation with SES


Overlap in reducing racial/ethnic health disparities will be created by addressing SES health disparities
SES and downstream social factors are relevant as means to address health disparities of all kinds
Goals of Medicare Payment

Medicare payment policy has focused on 3 main goals:




Payment accuracy
Encouraging efficient use of services
Ensuring access to care
Broad national policy goals have been addressed through Medicare payment


In general, Medicare payment does not account for social determinants

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Graduate medical education, access to care in rural areas
Exception: Medicaid status included in MA risk adjustment model
Current Medicare payment design could incorporate social determinants

Policymakers asked: would such a payment add new resources to the system or be budget
neutral?
Components of MA and FFS Payment


Both FFS and MA payment systems have 3 components

Base Pay = core payment per unit of service , per patient or per person

Adjustments to base pay = multipliers to base pay

Add-ons or separate payments = separate lump sum payment
ACA added new quality bonus adjustments (pay for performance) to
payment for both MA plans and FFS acute-care hospitals

P4P planned for other FFS settings
Components of MA Payment
Capitated Rate
(= Plan Bid if Bid is Below
Benchmark)
x
Plan-Level Characteristics:
--Varies by Star Rating
Health and
Demographic Risk
Adjustment
Person-Level Characteristics:
--Diagnosis
--Age/Sex
--Medicaid status
--Disabled status
--Working aged status
+
Rebate
(Add On)
Plan-Level Characteristics:
--Adjusted by plan-level risk adjusted
benchmark
--Varies by Star Rating

Base Rate = Plan Bid

Risk Adjustment = demographic (age/sex) and health (limited to 70 diagnoses), 1
social (Medicaid status proxy for income)

Add On = rebate for financial efficiency, must fund new benefits
Current Adjustments to MA Capitated Payment
BIOLOGICAL DETERMINANTS:
Age, Sex, Genetics
SOCIAL DETERMINANTS
Socio-economic Status
(SES) SSI Status, Education,
Occupation
Race/Ethnicity/Culture
Neighborhood
POSSIBLE MEDIATORS:
Health Literacy/Language
Transportation
Social Supports
Smoking
Diet/Nutrition/Exercise
Substance Abuse
MEDICAL ILLNESS:
CONDITIONS:
Acute (AMI)
z
Chronic
(Obesity/Diabetes/COPD/CHF)
Drug Dependence
Frailty
Homelessness
OUTCOMES:
Quality and Cost of Care
= included in MA
payment
USE OF CARE:
Preventive Screenings
Doctor Visits
Emergency Room
Treatment Adherence
Scope of Health Plan
BEHAVIORS:
Components of FFS Payment
x
Area Wages
Prospective
Payment
x
Area Wages
+
x
Physician Fee
Schedule
Adjustments
(1 and 2)
+
Add-on: area level
adjustment for health
Add-on professional shortages
Add-on
(Base Rate)
1. Patient Level Adjustments
(facility)
-Diagnosis/case-mix (hospitals)
-Complication/comorbidity
(hospitals)
-Age (IRF, Dialysis, Psych)
-Cognitive status (IRF)
-Functional status (IRF)
-Sex (LTCH)
2. Facility-Level Adjustments
(facility)
-RuraTeaching status (Psych)
-l location (IRF)
-Share of low income (IRF)
Add-On (purpose/facility)
-Indirect GME (teaching/acute
care)
-DSH (low-income/acute care)
-Rural (access to care/acute
care)
-Hold harmless payments
(outpatient)
Components of FFS Payment

Base rate = fee schedule or prospective payment

Adjustments = area wages + patient level adjustments + facility level
adjustments


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Patient level varies, reflects demographic (age/sex), diagnoses, functional status
Facility level reflects teaching/rural status, share of low income benes served
Exclude SES factors
Add on = separate payment to achieve national policy goals:


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Graduate medical education
Access to rural providers
Financial viability of hospitals that serve low income populations
Quality Bonus Payment (P4P)

ACA added quality bonus “adjustments” to both MA and FFS base payments

P4P has potential to improve quality outcomes and reduce health disparities in Medicare

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Caveat: Medicare P4P could exacerbate SES-related health disparities in Medicare as unintended consequence
 Only CAHPS measures are adjusted for case-mix (reflect includes health status, demographics and education)
MedPAC: broaden case-mix adjustment of hospital all-cause readmissions measure to include income/SES
 Same argument can be made for all outcome measures and those that are clinically-based
Issue of whether socioeconomic status should be included in case mix adjustment of quality measures will
need to be addressed

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Lack of case mix will have larger effects over time as more health outcomes measures are being added to P4P
Should providers/plans be held accountable for differences in patient quality that derive from differences in SES?
 NQF informed SNP Alliance that CMS has asked NQF to address this question
Options for Designing Payment that
Reflect Social Determinants of Health
1. Modify MA risk and FFS case-mix adjustments in order to reflect effects of social
characteristics of patients on costs of care


Incorporate measures of SES or other social characteristics of beneficiaries into the risk/case-mix
models
 Per MedPAC, adding race/ethnicity and income does not improve accuracy of the MA risk model
Include/interact in the risk/case-mix models more diagnoses that are highly correlated with SES
 For example, substance abuse could be interacted with several diagnoses in MA risk model
2. Modify P4P to control for independent effects of SES on health outcomes

Apply case-mix adjustment to all outcome measures and broaden case-mix adjustment to include
more SES factors of beneficiaries
Options for Designing Payment that
Reflects Social Determinants of Health
3. Create separate payment to reduce health disparities linked to SES
disparities

Addressing SES disparities will reduce racial/ethnic disparities

Not all plans would qualify, i.e., plans enrolling more beneficiaries with higher
SES would not likely receive added payment
4. Create new payment adjustment to reduce health disparities linked to SES

Adjust base payments for social status, not just health and case-mix

Example: 1 percent adjustment in base rates in areas that have SES or quality
disparities among Medicare beneficiaries
Potential Adjustments or Add-Ons to MA Capitated Payment
Key Data Considerations

Data issues will be a major consideration in any new payment policy, including:



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Does necessary data exist that identifies social characteristics/determinants of
Medicare beneficiaries?
 If so, at what level (beneficiary, plan, geographic area)?
Who collects the data?
 Can the data be gamed?
 Policymakers are skeptical of descriptive data collected by providers or plans, more
comfortable with data collected by Social Security or other agencies
If no data exists, could it be readily collected?
 By whom? At what level? Is it gamable?
Is the data accurate?
Data Issues for 12 Social Factors of Concern for SNPs
Other Considerations in Medicare Payment

Policymakers may be concerned with other issues when considering any
new Medicare payment:

Should payment modification or new payment be linked to results?

ACA ushered in a new era of accountability

If goal is to reduce disparities, then how could policymakers know payment is
working?

Should payment modification or new payment add resources to Medicare or be
designed to be budget neutral?

Would payment modification or new payment duplicate Medicaid or other federal
programs designed to address same or similar issue?