Investments Are Needed to Implement Value-Based Care in Pediatrics

August 02, 2023 - While value-based care adoption has accelerated in the healthcare industry, the alternative care delivery and payment model is still lacking in the pediatric setting. The current healthcare infrastructure does not support the resources needed to successfully implement this model for kids, according to Rachel Thornton, MD, vice president and chief health equity officer at Nemours Children’s Health.

“So much of pediatric healthcare is about preventing future harms that may require more investment in the short term to achieve those optimal long-term outcomes,” Thornton told RevCycleIntelligence.

“That may be one of those places where the current model—the way it’s operationalized from a cost-benefit standpoint or an efficiency standpoint—doesn’t provide the latitude needed to make those early investments in children that ultimately produce the healthier population in the future that is going to cost the healthcare system less.”

A key aspect of value-based care is quality measurement, as healthcare providers are reimbursed for the quality of care they provide rather than the quantity of services they deliver. However, quality measurement standards and value-based care itself tend to revolve around the Medicare population, including those with disabilities and people 65 years and older.

As healthcare spending continues to rise, older adults incur the majority of costs. The Office of the Actuary (OACT) estimated that healthcare spending will grow by 5.4 percent per year on average from 2022 through 2031. Medicare spending alone is projected to increase by 7.5 percent per year.

Given the significant spending and high chronic disease burden among the Medicare population, it’s not surprising that many value-based initiatives target this group. In addition, Medicare often requires providers to participate in these alternative payment models, resulting in a higher share of older adults receiving value-based care.

When it comes to pediatrics, these national standards will likely differ, given children’s unique needs.

Medicaid and the Children’s Health Insurance Program (CHIP) pay for over half of children’s healthcare in the United States. Before the Medicaid unwinding process began, 54 percent of children were covered by these public programs, according to Georgetown University’s Health Policy Institute.

Within Medicaid and CHIP, a good amount of care is covered through managed care organizations. Subsequently, quality is already at the forefront of pediatric healthcare delivery.

Managed care organizations typically prioritize preventive care when reimbursing providers, Thornton indicated. For example, they focus on whether children are receiving vaccinations on time or if common chronic conditions like ADHD and asthma are being managed.

While pediatrics prioritizes preventive care measures, the sector is lacking when it comes to behavioral healthcare. Ideally, providers would refer children to behavioral health providers if they identify a complex need. But the demand for behavioral health services surpasses the number of behavioral health providers.

“If we’re just thinking about this in terms of financial efficiency, what might be needed to provide the highest quality care to children is more investment, more funding, and not less,” Thornton shared. “This is the kind of challenge we face when we conceptualize value-based care as always economic efficiency in the short term, without really coming to terms with the mismatch between need and the level of resources available or the investment we’ve made and having the infrastructure to meet those needs.”

“Higher value care for kids might mean pouring a lot more money into a workforce and an infrastructure, and making it easy for them to get behavioral health services early, not having to be institutionalized for those services, or not having to have growing severity of disease before they reach the threshold for which we find it urgent enough to get them care,” she added.

Additionally, children’s health outcomes rely heavily on circumstances outside the clinical setting.

“Value in children’s health is not just about preventing disease; it’s also about giving every child the best possible shot at their best life. That means ensuring they have access to the kind of educational environment that will help them thrive, grow, and develop and ensuring they have basic needs, like safe, affordable housing and access to nutritional food at their fingertips,” Thornton explained.

“Without those things, you can’t expect a child to grow up to their most healthy self. Those are things where it’s not just about the funds flow in the healthcare payment models; it’s about ensuring we understand the other resources needed to produce the healthiest generations of children, which comes from beyond healthcare.”

This idea reinforces Nemours Children’s Health’s commitment to a whole child health model as the foundation of value-based payment in pediatrics. In addition to monitoring preventive care, like flu vaccinations, models can consider services that address health-related social needs.

In its whole child health model, Nemours helps ensure children have access to food resources, such as SNAP, WIC, and food pantries. The health system also prioritizes children’s readiness to enter school and focuses on identifying underlying reasons for absenteeism, which could include anxiety or untreated depression.

Health equity is another key component in pediatric value-based payment models. In order to generate positive health outcomes among children, providers must acknowledge that everyone’s circumstances are different. Incorporating health equity into payment models helps ensure kids have equal access to necessary care.

Disaggregating data can help healthcare entities identify disparities and use that information to develop targeted interventions and investments. Population-based payment models are perhaps the best route to achieve these goals.

“We want to ensure that we’re optimizing outcomes for the entire population, but sometimes that means looking equitably at where there’s more unmet need, whether that’s because we’re screening for health-related social needs, or because we’ve taken the time to look at the background population milieu,” Thornton said.

Once providers use the delivery model to pinpoint individual disparities, they must invest accordingly, which can require going outside the healthcare space and partnering with other organizations for community-based interventions.

“The future vision is, in keeping with our focus on moving well beyond medicine, how can we be part of the change in communities? Sometimes that means we’re bringing resources to bear on a problem that a community identifies. It could also mean that we’re advocating for expanded resources or investment in areas other than healthcare, whether that’s in housing, education, or early childhood,” Thornton said.

“We know that those missing links have to be closed, and it’s not something we can close with a pill or a prescription in the doctor’s office. It has to be addressed in those other sectors,” Thornton concluded.