Incorporating social determinants of health: Progress towards VBC 2.0

The American health care system is currently in the midst of a shift from fee-for-service (FFS) to value-based care (VBC). This has been informed by, and seeks to adhere to, the tenets of the Triple and Quadruple Aims. The Affordable Care Act (ACA) and Centers for Medicare and Medicaid Services (CMS) initiated the most decisive shift toward VBC through provider payment reforms, which linked quality and outcomes to reimbursement. These include the Hospital Value-Based Purchasing Program, Hospital Readmissions Reduction Program, and Medicare Shared Savings Program (MSSP). This initial effort to formalize VBC in these direct patient care settings can be conceptualized as VBC 1.0.

Early results from these programs produced moderate quality improvements and cost savings. Twenty-four percent of Accountable Care Organizations in the MSSP were able to meet quality benchmarks and generate >$700 million in savings in the first year of operation. However, in the decade-plus since the ACA has been in effect, CMS' other value-based programs have largely struggled to yield cost savings or significant quality improvement, and have even been found to exacerbate health inequities.

Analogous to the increasing shift from FFS to VBC, there is a developing national opinion that social determinants of health (SDOH) play a larger role in health than previously understood. In fact, an estimated 80% of an individual's health outcomes can be attributed to SDOH.3 The incorrect assumption that health outcomes are predominantly associated with direct patient care may explain the discrepancy between high health spending and low population health outcomes in the United States compared with other Organization for Economic Co-Operation and Development countries. In the United States, there are obvious disparities in life expectancy, infant mortality, chronic disease prevalence, and overall mortality among different populations, which are associated with SDOH status.