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Value-based care champions health and justice by focusing on outcomes rather than on units of service. As this type of payment reform expands, implementing the necessary changes to enable it must operate from a frame of equity rather than equality.

Working toward equality means giving different groups the same opportunities, while working towards equity means giving different groups different opportunities according to their needs. Health equity requires recognizing that systems of care are yielding different results for different populations due to underlying systemic differences, so the solutions to improving health and health care need to be different as well.


The commitment to reducing care disparities for populations affected by racism and other systemic disadvantages has grown over the past few years. Yet the successes have been highly variable, and sometimes have even widened disparities. Some payers and policymakers who are shifting to value-based reimbursement remain stuck in an equality mindset, treating all health systems the same rather than recognizing the disparate starting points for this transition. This is significantly curtailing progress toward a truly equitable health care environment.

In a recent JAMA Viewpoint article, Amol Navathe, Pooja Chandrashekar, and Christopher Chen explored ways to make value-based payments work for federally qualified health centers (FQHCs). These are community-based clinics that receive federal funds to care for historically disadvantaged populations. Value-based payments that treat these centers just like any other primary care clinics, without recognizing and addressing the real-world complexities of serving highly challenging patient populations, will not move the needle toward true health equity.

Navathe and co-authors outlined the policy directions that could allow federally qualified health centers to increase health equity through value-based payments by expanding funding for addressing social drivers of health, providing care in the community with a local workforce, and enhancing quality measurement. Realizing these policy goals depends heavily on how they are implemented.


Create flexibility with innovative value-based payment solutions

One step toward value-based care is a prospective payment system: upfront, enhanced payments not tied to billing for a specific service that are intended to address social drivers of health as well as barriers to access and adherence.

But if payments are predicated on patients actually visiting the clinic, it creates a Catch-22 for federally qualified health centers, since they serve more patients who experience greater difficulty attending appointments. Populations with less access to efficient transportation, less flexibility to leave work or care duties, and less ability to navigate the health care system may not be able to make or keep appointments. It’s absurd that federally qualified health centers can’t get paid for helping patients overcome barriers to care unless patients first overcome those barriers themselves so their visits “count.”

One solution is to decouple payments related to social drivers of health from payments based on visits. Small-area indices, such as the Area Deprivation Index, measure the relative difference of numerous social drivers of health between populations based on geographical census tracts of about 4,000 people. The data are publicly available and require neither increased resources for practices to collect data nor office visits for patients. Offering dedicated funding for social drivers of health informed by these small-area indices is a promising way to ensure that disadvantaged communities get the support they need to engage more comprehensively with the health care system.

Screen individuals only when it serves their needs

Screening for social needs at a primary care visit has some detriments. Patients report that it can feel degrading to have providers collect data on their social challenges, and the process can be re-traumatizing or even exploitative if providers have no resources to address the issues disclosed. Providers have said that universally screening for social conditions they can’t respond to takes time away from addressing the pressing concerns of patients and their families. Both perspectives acknowledge that implementing universal screening for social drivers of health without a concordant ability to respond could widen health disparities rather than narrow them.

Policies should require federally qualified health centers to screen at the individual level only for vulnerabilities they are capable of addressing, while still directing payments for these centers based on population-level metrics using publicly available data such as the Area Deprivation Index, combined with age and disease burden data.

An equitable payment system should also recognize that federally qualified health centers must work to earn patients’ trust rather than assume that trust exists. The populations most historically discriminated against are the least likely to trust health systems. Black Americans, for example, may be less likely than others to trust a health center with their race and ethnicity data.

That has a trickle-down effect for value-based payment. Payments predicated on health systems collecting race and ethnicity data will disproportionately disadvantage health systems where the lack of trust is already prevalent and could have the unintended consequences of exacerbating disparities. Again, using publicly available population-level data would relieve federally qualified health centers of the need to collect data that patients may not yet wish to share.

Empower patients and communities with person-centered care

Delivering value-based, person-centered care must embrace the idea that time belongs to patients, not to the health system. Working toward greater health equity means creating systems that take this notion seriously. Disadvantaged people must often use more of their personal time to accomplish the same tasks as advantaged populations, such as in transportation or obtaining food.

Value-based care that enhances care at home and in the community improves access and adherence, and provides respectful, culturally competent services through a workforce reflective of the community is vital to ensuring a more just system that narrows disparities.

Level the playing field for FQHCs

Federally qualified health centers aren’t the same as other primary care clinics. They typically care for a high proportion of people without insurance or who are covered by Medicaid. Such individuals are already more burdened by illness and social drivers of risk which, in turn, drives up medical costs. That means fundamental calculations like the medical loss ratio, a measure of how much of the money spent on care is used to deliver that care, will need to be higher in value-based care arrangements because it costs more to take care of patients who are already more burdened.

Setting a lower target for the medical loss ratio that is “equal” with other provider systems will undermine equity for federally qualified health centers in value-based contracts and perpetuate the discrimination inherent in the current system. Instead, value-based contracting must meet these centers where they are, clinically and financially. That means setting targets that will give FQHCs a fair chance to earn shared savings, enhance their financial sustainability, and continue to serve their communities.

Lora Council is a family and preventive medicine physician and the chief population health officer at Yuvo Health, which provides administrative and managed-care contracting services to federally qualified health centers.

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