As New York shifts the bulk of its Medicaid payments toward value-based care, the state has a golden opportunity to use new payment models to transform care for its youngest patients, a new report says.
The report, written by the consulting firm Bailit Health and funded by the Schuyler Center for Analysis and Advocacy and the United Hospital Fund, not only lays out the case for why value-based payment systems should treat children differently from adults but also sketches a framework for how the state could do so. Advocates predict that creating the right incentives will have significant health and economic benefits, although they could take years, if not decades, to manifest.
“We can't treat children as just small adults,” said Mark Fendrick, who is the director of the Center for Value-Based Insurance Design at the University of Michigan and was not involved in the report.
New York state has set the goal for 80% to 90% percent of its Medicaid managed care payments to be value-based by 2020, a change it hopes will lead to better quality care and healthier people, all at a lower cost. In 2013, 37% of New York's Medicaid enrollees were children, but current value-based payment systems aren't built to accommodate that younger demographic.
“For the field of pediatrics, the development of evidence-based quality measures are nowhere near as established for children as they are for adults,” Fendrick added.
In the past two or three decades, medicine and science together have made huge strides in understanding how a person's childhood experiences affect his or her health later in life, said Andrea Cohen, UHF's senior vice president for program. Investments in the healthcare system, however, have not exactly kept up.
“There's no managed care company in the world that's going to be able to think about a 30, 40, 50-year return on investment in healthcare,” Cohen said. “But, the government can,” she added, referring to New York's Medicaid program.
The report highlighted the fact that the default model of value-based care for adults doesn't work for most children, who tend to be healthy and use healthcare very differently from adults—they visit the hospital less, for instance. And even for the same illnesses, children are treated differently from adults.
Children's health is also strongly influenced by environmental and psychosocial factors. Only a tiny percentage of children—1 to 5% at most, the report estimated—are considered high-need children, with complex and expensive medical cases.
For the majority of children, excluding high-need cases, the report recommended a capitated primary care payment, combined with care coordination payments to reimburse providers for services like connecting patients with community resources that can have a direct impact on their health. Providers should also receive a bonus if they deliver high-quality care, it said.
High-need cases should be placed in a separate category, with a total cost of care model that also included care coordination payments, the report recommended.
The report also called for value-based payment models for children to recognize the critical role of social determinants that affect children's health, like parental depression or stress, and reward doctors who were able to address those factors.
The report was meant to serve as a broad framework, not a prescription, for how value-based payment systems could be developed to fit children, Cohen cautioned, saying, “It's not ready to be turned into a billing code.”
Kate Breslin, the president and CEO of the Schuyler Center for Analysis & Advocacy, said the recognition was growing among clinicians and policy experts alike that, for value-based payment, the value of healthcare should be gauged differently for children. The present could be a pivotal time to push for that kind of change.
“The reason we felt like this was the moment is because the state is moving forward with value-based payment for everybody,” Breslin said. “Kids will be lumped in if we don't take a more intentional look at what value means for kids.”