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5 Payer Trends That Will Outlast the Pandemic

May 12, 2021

More than a year into the COVID-19 pandemic, Americans are looking forward to a return to normalcy as vaccination expands. But the health care landscape has been irrevocably altered. From spurring explosive growth in virtual care to highlighting the painful realities of health inequity, the virus fundamentally changed how care is delivered. As a result, many of the pivots payers have made during the pandemic will endure long after COVID-19 has faded. Here are five pandemic trends that are here to stay.

1. A renewed commitment to health equity through revised payment models

The pandemic’s disproportionate impact on people of color exposed and amplified the United States’ massive racial health disparities. Stark data released by the Centers for Disease Control and Prevention in March shows that Latinos were 3.1 times more likely to be hospitalized due to COVID-19 and 2.3 times more likely to die than white individuals. For Black individuals, the likelihood of hospitalization was 2.9 times greater and the risk of death was 1.9 times greater. Overall, the pandemic’s devastation underscored the structural problems that prevent people of color from accessing high-quality care to prevent illness and effectively manage chronic disease.

To incentivize providers to transform care in ways that reduce and ultimately eliminate these disparities, payers have stepped up equity-focused payment approaches. But this means more than simply shifting from fee-for-service to value-based care, as new payment models are far from an automatic equity slam dunk.

In fact, if the rubrics for paying physicians for better quality care are not thoughtfully established to account for specific socioeconomic factors, these rules can actually exacerbate health care disparities by encouraging providers to achieve high quality scores by focusing on healthier, less diverse patients.

Payers, therefore, are rethinking how they account for factors including geography, ethnicity, race, and disability status when measuring quality performance. Increasingly, instead of holding providers to a quality benchmark based on generic performance measures, payers are beginning to reward improvement compared with patients’ own historical baselines. They’re also incorporating social data into their risk adjustment methodology measures to avoid penalizing providers who treat patients with greater social needs.

2. More attention to social determinants of health

This effort to address health disparities has resulted in increased awareness of the impact of nonclinical factors on people’s health. Indeed, social determinants of health — including housing, employment, food, smoking, and transportation — account for 80% of health outcomes, according to the University of Wisconsin's County Health Rankings. This was illustrated during the pandemic, when adverse social determinants directly correlated to increased risk for becoming seriously ill from the virus. For instance, unhoused individuals struggled to socially distance, and smoking was quickly linked to adverse COVID-19 outcomes.

Looking forward, payers now understand that they must partner with providers and community organizations to provide vulnerable patients access to shelter, smoking cessation programs, healthy food, and more to reduce chronic diseases and mortality. Doing so provides a major opportunity to improve health outcomes, reduce costs, and address disparities in the post-pandemic future.

3. An increased focus on personalized care

Beyond drawing attention to health disparities and the social factors that dramatically impact a person’s well-being, the pandemic also reinforced the individual nature of health. COVID-19 affects people differently in ways that researchers are still trying to understand. “If you have 100 people infected, you have a wide range of outcomes,” explains Joaquin Espinosa, PhD, a professor at the University of Colorado School of Medicine. “Some will not get sick at all, some will die, and everything in between.”

This as-yet unsolved mystery, which may be related to unique immune responses and genetics, underscores the importance of personalized care management plans to improve health and ultimately cut costs. If an illness presents differently among a group of people, it stands to reason that each person may need different interventions and approaches to best manage it.

To implement personalized care plans, payers must leverage tremendous volumes of patient data to not only create condition- and age-specific recommendations for managing a disease, but also to drive insight into patients’ individual histories. This individualized approach can make a huge difference by proactively identifying risks and empowering people to take control of their own health — all while improving the patient experience. As patients grapple with the potentially long-term chronic health effects of COVID-19, personalized care management will play a critical role in the future.

4. …and on population health, too

At the same time that the pandemic emphasized the need for personalized care, it also highlighted the importance of large-scale population health. Public health strategies were required to track the pandemic’s spread, identify high-risk patients and so-called hot spots, support infected patients, and guide recommendations for reopening communities and classrooms.

This same public health approach will play a huge role in combating the scourge of lifestyle and chronic diseases going forward. To succeed in slowing the rise in care costs while improving health outcomes, payers must continue to adopt a population health approach that accurately defines geographically based populations, identifies the health risks each faces, and effectively manages that risk through a proactive and multi-pronged approach.

Another COVID-19 insight? Population health needs to go beyond physical health to address mental well-being, too. Only 50% of individuals with behavioral health concerns actually enter any form of treatment, noted American Psychological Association CEO Arthur Evans, PhD, and senior director, Lynn Bukfa, PhD, last year. “A population health approach is needed to address the impact of the COVID-19 pandemic and the inadequacies of the nation’s current approach to behavioral health needs, which have been magnified during the pandemic,” they wrote.

5. Leveraging the power of telehealth

Meeting the demand for high-quality personalized care and robust behavioral health services may not seem feasible for an already burdened health care system. Luckily COVID-19 provided a tremendous case study in how virtual care can expand access to essential health services.

When lockdowns prompted health care systems and payers to improve telehealth options, virtual care exploded. Telemedicine accounted for a fifth of all medical visits last year, driving an estimated $29 billion in health care services.

These efforts to digitize health care delivery were aided by loosened telehealth licensing restrictions, as well as by temporary waivers that allowed Medicare and Medicaid to reimburse providers for a far wider swath of telehealth services. Now, as these temporary telehealth waivers are set to expire, payers must determine how to transition telehealth into a permanent, integrated strategy.

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Articles on Rally Health’s website are provided for informational purposes only, as a free resource for the public. They are not a substitute for medical advice, diagnosis, or treatment. Rally Health does not accept solicitations or compensation from any parties mentioned in the articles, and the articles are not an endorsement of any providers, experts, websites, tools, or financial consultants, services, and organizations.