Payment Models Report
Community-directed research is a cornerstone of our work at the Tubman Center for Health & Freedom, and today, we’re excited to announce the release of our latest report on systemic barriers to care in collaboration with Byrd Barr Place. This time, we took a deep dive into how our healthcare system incentivizes providers for the care they provide.
Our findings are crystal clear: for healthcare to be truly equitable, we must redefine what we pay for and whose needs are centered in those decisions.
The report looks at a payment model known as “value-based purchasing.” This approach to payment was introduced as an alternative to reimbursement methods that reward quantity of services over quality of care.
But what’s valued most under value-based purchasing isn’t aligned with the type of care our communities know we need to be healthy. Instead, the model focuses on cost-effectiveness and quality measures that are not defined by us. Many current reimbursement models discourage providers from serving community members with complex medical needs. This exacerbates health disparities.
Our communities want trusted relationships with our care teams. We want access to our cultural and alternative medicines. And we want to be cared for as whole people with diverse health needs.
We need to be given a seat at the table to define what quality and equity in healthcare look like to us. Our policy recommendations are clear: accountability, transparency, and community direction.
Examining systems that define our care is an example of what it means for Tubman Health to address health and freedom from both clinical and systemic approaches. We’re committed to creating systems that make healthcare more equitable for everyone.
The Enabling Environment: Payment Models Report is the third report produced from a research collaboration between the Tubman Center for Health & Freedom and Byrd Barr Place and follows the WELL US Study released in 2022 and the Washington State Health Insurances Plans – Comparison Report released in 2023.
“Money makes the world go round” is an unfortunately common statement that also applies to the profit-driven model of healthcare. Within healthcare, payment models are the backbones that dictate care delivery by deciding what is paid for and who gets paid. Payment models profoundly impact the quality of care for patients and communities by setting expectations for the care we receive. Payment models can either drive or discourage quality care. Unfortunately, healthcare today is a business where traditionally, payment models prioritize the volume of services rather than the quality of care for an individual, let alone the quality of care for our communities. In Tubman Health’s latest research report Sustaining a Community-Designed Model of Care: The Existing Payment Landscape and Opportunities to Address Structural Drivers of Inequities, we conducted a scoping anti-racist analysis of existing payment models within the payment landscape. Complementing this analysis, we examined existing barriers and opportunities at different levels of the payment landscape.
Why We Conducted This Research
Over the past three years, we have worked with community to envision a model of care for the Tubman Center for Health & Freedom. Together, we have dreamed of an ideal model that transcends systemic constraints in profit-driven healthcare that drive health inequities. Community has dreamed of whole-person, patient-centered and relationship-centered care that recognizes the tailored needs of each patient, supports the creation of trusted relationships between patients and their care teams, and incorporates integrative medicine. These elements of our model of care are crucial for our health, wellbeing, and collective liberation from systems that keep us unwell. To bring this model to life, we have researched the payment environment to: (1) understand how to sustain our model of care and (2) identify opportunities to advocate for systemic change in healthcare policies for health justice.
Numerous opportunities to create change exist between key stakeholders who hold authority in the payment landscape, including the Centers for Medicare & Medicaid (CMS), health insurance plans, healthcare delivery systems (i.e. hospitals, clinics), and individual clinicians. Many of these stakeholders have publicly made commitments to health equity and made major systemic changes intended to support health equity that have fallen short.
One of the largest shifts introduced by CMS is value-based purchasing (VBP). VBP was introduced in 2010 under the Affordable Care Act to incentivize hospitals and healthcare to shift from the status quo of quantity of services to quality care. VBP attempted to transform the standard of healthcare to be more equitable through a focus on “value”, yet the definition of “value” today does not include the needs of our communities. VBP also has been implemented onto existing utilization-based structures. Thus, we see unsurprisingly in published outcomes research in 2022, that VBP has limited support for safety net hospitals that cater to more socioeconomically diverse patient populations who are already more medically marginalized.
Opportunities to Reimagine the Payment Landscape
In our research, we examined common payment models that health delivery systems rely on to sustain their models of care. Using the American Medical Associations categories, we reviewed core, supplementary, and organizational models. Core models, like fee-for-service, represent the status quo and have contributed to a utilization-based culture in healthcare. Supplementary models, like pay-for-performance, are newer models that were intended to support “value” but are not able to exist without a core model. Organizational models are a combination of core and supplementary models – they are considered the forefront of innovation.
Figure 1: Current Payment Landscape
Figure 1 outlines our current healthcare system and payment landscape with core, supplementary, and organizational models. Figure 1’s dotted lines exhibit the gaps in care. Here the pieces do not fit, and different payment models do not work in unison to support community. Figure 2 shows the current approach to care through organizational models that utilize both core and supplementary models to provide “value”. The pieces fit well but the structure of supplementary models is still dependent on the inner core – which are volume-driven payment models. At Tubman Health, we challenge what is current to radically design a model that centers community. If we start with community to create definitions and standards for “value” and quality measurement within our model, we can reimagine the payment landscape to support patient-centered, equitable care. By reimaging healthcare and the payment landscape collectively, community solutions can shift the direction of American healthcare to value equitable care as seen in Figure 3.
Takeaways
Our findings on the payment landscape reinforce that the United States healthcare system functions as a profit-driven business model that directly harms patients, providers, and communities. Current payment models and reimbursement policies uphold and reinforce structures that harm all patients, and especially Black and Brown patients by perpetuating differential health outcomes. Structural racism is imbedded in the payment landscape through exclusionary practices and exacerbates existing health disparities driven by medical racism, bias, mistreatment, and marginalization. Despite the myriad of health equity initiatives, disparities will continue to widen without structural shifts in the payment landscape. Collectively, we must:
(1) redefine who is at the table with the power to make systemic changes.
(2) include and prioritize the concerns of patients and providers from community who are most negatively impacted.
(3) rectify impact of those structures on providers and workforce development.
(4) prioritize health justice in future plans for implementation.
Above all else, solutions and re-design processes must be community-driven to recognize the innate expertise of our lived experience. Community solutions must be the gold standard in healthcare and our North Star for health equity.