Archives     Advertise     Editorial Calendar     Subscribe     Contact Us    

Accounting for Social Risk Factors in Value-Based Payment


Healthcare providers are becoming more responsible for ensuring the efficiency and quality of the care they provide to Medicare beneficiaries. The shift toward value-based payment models means that measurements of efficiency and quality of care are increasingly used to determine financial bonuses and penalties.

A recent report by a committee of the National Academies of Sciences, Engineering, and Medicine (NASEM, formerly the Institute of Medicine) --on which one of us served --finds benefits of adjustment of such measures for both clinical and social risk factors. Clinical risk factors are physiological attributes that can be associated with increased risk of certain diseases and health outcomes: they are already used to adjust quality and efficiency measures. Social risk factors are patient attributes such as low socioeconomic position, minority race or ethnic background, minority sexual orientation or gender identity, or living in a deprived setting.

Research has shown that these social risk factors influence health-related outcomes: patients with these attributes have worse health outcomes, and providers that disproportionately serve them appear to, as well. If they are not measured and adjusted for as clinical risk factors are, providers who serve disadvantaged populations could be unfairly penalized.1 In addition, providers might work to reduce the effects of social risk factors but doing so could require additional staff effort and costs. If social risk factors beyond providers' control are not accounted for, and providers serving disproportionate numbers of patients with high degrees of social risk are penalized, then disparities in health outcomes could widen.

Thus, in order to achieve the goal of accounting for social risk factors in Medicare payment programs and compensating providers fairly, the NASEM committee was commissioned to "specify criteria that could be used in determining which socioeconomic status factors should be accounted for in Medicare quality measurement and payment systems."1 The committee found that these goals could be reached with a combination of approaches. Specifically, depending on the measure and context, a combination of approaches might be used to account for social risk factors without masking real differences in performance. The approaches are:

  • Stratified public reporting by social risk factors within reporting units to illuminate how providers serve those with risk factors.
  • Adjusted performance measures to standardize estimates of quality.
  • Direct adjustment of payments to providers who disproportionately serve those with social risk factors.
  • Restructured payment incentives to reward improved quality or high-value care.

The committee also found that development of new data sources and methods of measurement would be beneficial in identifying indicators of social risk. Table 1 shows the five major categories of measures considered important by the committee, and specific examples of measures in each category, which may be ready for use. One example is that data are ready for use on dual eligibility for Medicare and Medicaid (an indicator of low income), and the Medicare program could use them to adjust measures of - and penalties for - hospital readmissions.

In addition, work to improve the accuracy of social risk data and use it for payment and quality measurement would likely benefit providers and patients in Nashville.1,2 Davidson County's poverty rate is higher than the U.S. average, and Nashville has a higher proportion of citizens who are members of minority races and ethnicities. 3 Accounting for social risk factors that a significant numbers of Nashvillians face would not only benefit the providers who serve these disadvantaged populations, but those directly affected by social risk factors themselves.

1 National Academies of Sciences, Engineering, and Medicine, Accounting for social risk factors in Medicare payment. Washington, DC: National Academies Press, 2017.

2 Buntin, MB, Ayanian, JZ. Social Risk Factors and Equity in Medicare Payment. NEJM. 2017 Feb 9; 376:607-510.

3 People Living Below Poverty Level by Race/Ethnicity, Nashville TN. (2015). Retrieved: March 9, 2017, from Data Source: US Census Bureau, American Community Survey. 2011-2015.

Melinda Buntin, PhD is a Professor of health economics and the Chair of the Department of Health Policy at Vanderbilt University's School of Medicine. More about her Department can be found at or by following @VUHealthPol.

Aiden Lee is a senior at Vanderbilt University studying Medicine, Health, and Society with a concentration in Health Policies and Economies.


Related Articles:

Recent Articles

Trump Administration Announces MyHealthEData Initiative to Put Patients at the Center of the US Healthcare System

CMS launches "Blue Button 2.0" tool, calls on all health insurers to make data available to patients

Read More

Centauri Health Solutions Partners with RoundTrip, Lyft for RISE Nashville Summit

Partnership providing free rides via Lyft code or RoundTrip app to showcase link between transportation and quality healthcare

Read More

Assessing and Addressing Detriments to Health in Nashville

From safer sidewalks to anti-smoking campaigns, Nashville is finding innovative ways to address social detriments in Middle Tennessee.

Read More

Password Protected

Trying to stay ahead of healthcare hacks can be time consuming and costly. Yet, many medical practices and healthcare companies could significantly lower risks by following simple, inexpensive best practices.

Read More

Dr. Kiffany Peggs: Changing Expectations

Geriatrician Kiffany Peggs' whole-person approach brings peace of mind, hope to UnitedHealthcare clients.

Read More

Driving Community Outcomes

Two area companies are doing their part to highlight and address common barriers to care that increase health risks in American communities.

Read More

Better Collaboration Required to Address Social Determinants

Despite amazing advances in medical science and improved understanding of biology on a cellular level, environment continues to play the biggest role in impacting an individual's health status.

Read More

Mazzetti+GBA Helps Bring Clean Water to Puerto Rico

Mazzetti+GBA believes in building healthier environments to make the world a better place - whether that environment is a hospital in a small Tennessee town or a community clinic in rural Burundi.

Read More

Heart Failure Risk Predicted By Communities, Not Wealth

When buying and selling real estate, how often have you heard the realtor's mantra-- location, location, location? This is also the central theme of a recently released journal report on factors that can predict heart failure risk.

Read More

Walking in a Patient's Shoes

What happens when the 'right' action plan for a diagnosis doesn't mesh with the real world? UTHSC students and residents in Chattanooga have a unique opportunity to walk in their patients' shoes.

Read More

Email Print



Aiden Lee, Melinda Buntin, Quality Care, Risk Adjustment, Social Determinants of Health, Social Risk Factors, Value-Based Reimbursement, Vanderbilt University School of Medicine, VUMC
Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: