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REACH Won’t Fix the Equity Harms of Value-Based Care

July 13, 2022

Summary: A commentary in the New England Journal of Medicine by individuals consulting for huge health care companies argues that REACH, the new corporate-focused funding mechanism for traditional Medicare, will enhance equity. Their assertion is hype, with no evidence. Single payer would guarantee equity.

“REACHing” for Equity—Moving from Regressive toward Progressive Value-Based Payment
New England Journal of Medicine
July 9, 2022
By S Gondi, K Joynt Maddox, & R Wadhera

(No excerpt)

Comment by: Ana Malinow

Even before the Center for Medicare and Medicaid Innovation (CMMI) rebranded the Global and Professional Direct Contracting model as ACO REACH, requiring “all model participants [to] develop and implement a robust health equity plan to identify underserved communities and implement initiatives to measurably reduce health disparities within their beneficiary populations,” the industry had been flagellating itself over its lackluster equity outcomes. The authors explain why value-based care payments, the darling of health policy experts, have failed so miserably to address health equity.

Just what is value-based care (VBC)? Good luck finding a definition to this slippery term. Mostly, it is defined in terms of its goals, as in this article, published in the New England Journal of Medicine Catalyst, that describes the VBC model as one where hospitals and physicians are paid and rewarded on patient outcomes while controlling costs. Benefits for patients include spending less money to achieve better health; for providers, achieving efficiencies and greater patient satisfaction; for payers, controlling costs and reducing risk; for suppliers, aligning price with patient outcomes; and for society, becoming healthier while reducing overall spending.

There is no shred of evidence that this has ever happened or ever could. The New England Journal of Medicine Catalyst Innovations in Care Delivery, a recent peer-reviewed project of NEJM Catalyst, publishes articles which “are vetted rigorously and are evaluated for originality, innovation, readability, clarity, relevance… practicability and scalability.” Evidence is not mentioned. All aspiration and fluff. The Catalyst offers “exclusive sponsorship opportunities for organizations that recognize the value of joining an industry dialog while aligning their brand and solutions with influential NEJM Catalyst audiences.” A dangerous alliance for the venerable NEJM.

To pay based on value, one should define value. But defining and measuring value in medicine and rewarding or punishing the physician for creating or failing to create value are elusive because: 1) there are over 85,000 CPT service codes, making it difficult if not impossible to decide which value to measure; 2) inevitably, services not chosen receive less attention; 3) patients see multiple providers every year despite being assigned to one PCP; and 4) most of the determinants of health are outside the control of the physician.

The authors of “REACHing for Equity,” one of whom consults for the Centene Corporation, the largest Medicaid managed care organization in the U.S. [KJM], and the other for the giant CVS Health [RKW], honestly admit to the many flaws of VBC, including:

1) Disproportionally penalize outpatient clinicians who care for poor adults through Medicare’s Merit-Based Incentive Payment System (MIPS).
2) Transfer resources away from safety-net hospitals and potentially widening inequities in care through all Medicare’s hospital value-based programs.
3) Perpetuate structural racism by penalizing institutions caring for high proportions of Black adults.
4) Reward practices and hospitals with robust infrastructure that can adapt to logistic and reporting requirements (draining resources from needier practices and hospitals).
5) Set up unrealistic expectations for providers with patients who use fewer resources due to lack of services, putting them at a disadvantage.
6) Encourage gaming the system by avoiding high-utilizing patients and widening long-standing racial disparities.
7) Encourage gaming the system of well-resourced providers who maximize their scores based on their existing performance without improving care.
8) Punish providers who care for low-income populations who often have fewer resources to dedicate to score optimization.
9) Encourage upcoding.
10) Strategically drop high risk beneficiaries or clinicians whose panels consist of large numbers of these patients to reduce spending and increase their chances of earning shared savings.

One would think 10 well-referenced reasons would be enough to put this model, which has exacerbated health inequities, to rest, but no. They argue that VBP has failed to advance health equity because equity wasn’t prioritized. And that’s where ACO REACH will be different. Because this new model will prioritize equity (while keeping everything else the same), equity will be achievable. How?

First, the new model includes a new “health equity benchmark adjustment” and will pay providers who care for underserved patients $30/month/beneficiary in the top decile of disadvantage and a downward adjustment for providers not caring for the underserved. This is supposed to entice providers to care for underserved beneficiaries. But providers get this payment even if the beneficiaries do not receive any services to address health inequities. We are made to believe this $30 adjustment should be enough to transfer resources back into safety-net hospitals and physicians.

Second, providers are supposed to fill out a health equity plan. These plans are supposed to use “payment reform as a lever to foster local efforts that promote equity,” but the equity plan is a 5-step boilerplate created by the CMS Office of Minority Health, reminiscent of a 5th grader’s attempt at QI. Other efforts by CMS to “promote health equity” include the CMS Health Equity Awards, which in 2020 went to UnitedHealthcare. A previous award recipient was the Centene Corporation. CMS would like us to put our hopes on corporations to address structural racism.

Third, REACH models are supposed to collect and submit data on demographics and social determinants of health, to the extent that beneficiaries are willing. Figuring out how to define and measure social risk adjusters, just like value, will spawn a whole new cottage industry, creating another level of middlemen. Thus, mandating data collection without mitigating any inequities should be sufficient to counter gaming the system.


Value-based payment has been an invention peddled by policy elites through peer-reviewed publications. Some of those policy experts now admit that VPC is regressive. However, instead of taking these “lessons learned” and recommending the model be scrapped altogether, they propose to expand it to include “equity” and make it mandatory – with no evidence it will work.

In addition to medical outcomes, as well as to the day-to-day financial responsibility of risk-sharing arrangements, physicians will now be responsible for the equity outcomes of their patients. What’s next? Inflation? Arguing against VBC, Lisa Rosenbaum wrote also in NEJM that doctors want the best care for their patients. Tying financial incentives, and the documentation burden that is involved, to value, cost and now equity, has already harmed and will prove fatal to the profession and to patients.

Why not model national single payer, known to increase value, equity, and lower costs around the world? Or are the sponsors of our models too beholden to the profiteers to offer real progressive change?

© Health Justice Monitor
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