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Two-Sided Financial Risk Model Reduces Socioeconomic Disparities

Patients experiencing significant socioeconomic challenges benefitted the most from a two-sided financial risk model that promotes population health management.

Two Sided financial risk model promotes population health

Source: Thinkstock

- A two-sided financial risk model that encourages population health management significantly narrowed the care disparity gaps between different socioeconomic groups, according to a study from Harvard Medical School.

Disadvantaged patients receiving care under the Massachusetts-based Alternative Quality Contract (AQC) with Blue Cross Blue Shield saw a 1.2 percent higher rate of improvement on process measures than patients in more socioeconomically secure areas.

"During the first four years of the Alternative Quality Contract in Massachusetts, improvements in quality of care for enrollees in areas with lower socioeconomic status were comparable or greater than those in areas with higher socioeconomic status, without statistically significant differences in spending trends," the research team said.

"These results suggest that in its early years, the AQC likely contributed to a narrowing of disparities in some dimensions of quality, notably as reflected by process measures in the contract.”

The ACQ model requires participating providers to shoulder financial risk in addition to giving them the opportunity to share in savings.

"In 2009-10, physician organizations could earn up to 10 percent of their risk-adjusted budgets in bonus payments for quality performance—an amount substantially larger than the 2.3 percent average bonus for quality performance in prior pay-for-performance contracts," the team said.

Providers were also responsible for sharing in BCBS’s deficits should they exceed their budget for delivering care.

With AQC enrollment numbers of 299,285 individuals in lower socioeconomic statuses, and 244,415 in higher statuses the research team compared the process quality measures, outcome quality measures, and spending individuals to similar populations not enrolled in the AQC. 

Disparities lowered, outcomes increased for AQC enrollees

Source: Health Affairs

However, while both the lower and higher socioeconomic subgroups under AQC coverage increased in quality and outcomes, the socioeconomic disparities in outcomes still existed. Higher socioeconomic groups experienced better outcomes than the lower groups, indicating that providers and payers have more work to do in order to truly improve the quality of care.

"The fact that disparities between enrollees in areas with lower and higher socioeconomic status narrowed among process measures but not for outcome measures, despite larger improvements for both subgroups in outcome measures, could reflect a weak relationship between process and outcome measures," the research team said.

"In general, improvement in outcome measures is considered more complex and challenging because it requires patient adherence and changes in health behaviors, which are less under the direct influence of providers than process measures are."

Large insurers such as the Blue Cross Blue Shield with a higher number of enrollees could set an example on how groups could effectively encourage population health management, the researchers concluded.

"The size of the Blue Cross Blue Shield of Massachusetts enrollee population could help facilitate positive peer- or neighborhood-level effects on health, given that populations with similar socioeconomic and demographic characteristics tend to cluster geographically," the team said. "Ultimately, social and environmental factors are recognized to play a larger role than health care in determining the health of populations."

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