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Why Reforming Health Care Payment and Delivery is a Health Equity Issue

By Melissa Burroughs, , Akshaya Kannan,


This is part one of a two-part blog series describing the models three organizations are using to tackle community-level barriers to high-quality care for people of color and save their state Medicaid programs money.  

Across the country, there is tremendous momentum to change how health care is delivered and paid for in order to improve quality and to curb costs. These initiatives to transform the health system have the potential to improve care for everyone, and could directly address health disparities. Advocates must actively engage in these reform efforts—both to protect communities of color from harm and to take maximum advantage of opportunities to transform health care delivery to better serve people of color.

Health care equity must be a central part of delivery and payment system reform

Health care equity is achieved when everyone—regardless of racial and ethnic background or socioeconomic status—has equal access to high-quality health care that is affordable, culturally competent, and language accessible. Health care payment and delivery efforts present new and important opportunities to reach this goal. But even though payment and delivery reforms could directly target racial and ethnic health care disparities, they may also inadvertently exacerbate disparities if not designed and implemented carefully.

Health system reforms have the potential to reduce health disparities, but also carry risks

A broad variety of experiments with payment and delivery reforms to improve health care quality and reduce spending are taking place across the country, ranging from federal government pilot programs to private providers developing new systems to integrate medical services and social supports. Yet, reforms focused primarily on cutting costs or based on the experiences of an “average” patient will not necessarily result in an improvement in the quality of care delivered to communities of color. Nor will such reforms automatically lead to better health outcomes in communities who struggle with multiple barriers to getting the right care at the right time.

Assuming that the benefits of payment and delivery reforms will routinely trickle down to communities of color is a mistake.

Some reforms could even exacerbate disparities if they don’t address barriers to care commonly experienced by people of color. For example, if a payment reform penalizes insurers and providers based on the health status of their patients without taking into account the patients’ baseline health and barriers to care, they may begin to avoid serving people who may be more challenging to treat. Such patients include those with expensive, complex health conditions, people with limited incomes, people of color, and other vulnerable populations.

How advocates can integrate health equity into conversations about new delivery and payment systems

As interest in health care delivery and payment reform increases, it is imperative that advocates raise health care equity prominently in the discussion to ensure that it is integrated into the evolution of new models and payment systems.

To start with, communities of color and other vulnerable communities must be shielded from the potentially negative effects of reforms that do not take their barriers to good health into account. Equally important, advocates must identify, develop, promote, and evaluate promising practices and effective models that directly target health disparities to improve quality and outcomes, and thereby reduce spending.

The effective models we will be describing in this blog series share several features in common. They all:

  • focus on the community being served
  • improve care for specific populations
  • reduce spending—and have become sustainable and replicable by tapping into Medicaid as a funding source

Advocates from Minnesota, New Jersey, and New Mexico gave presentations on these models at Families USA’s Health Action 2015 conference in January. This week we focus on Minnesota’s model.

Minnesota: Medicaid funding for community health workers enables their full integration into patient care teams, which helps reduce health disparities

Minnesota has the distinction of being one of the first state Medicaid programs to pay for community health worker (CHW) services. CHWs, also known in Latino communities as promotores*, are trusted members of the communities they serve who are trained to provide a variety of health and supportive services. They often function as an extension of, or bridge to, patients’ health care teams, educating and supporting patients in ways that doctors and nurses can’t. CHWs are particularly effective in communities of color because they help patients overcome knowledge, access, literacy, language, cultural, and trust barriers.

Joan Cleary of the Minnesota Community Health Worker Alliance explained how her organization and a coalition of stakeholders succeeded in generating support for legislation allowing CHWs to be paid through Medicaid. According to Cleary, three elements were key:

  1. a well-defined CHW role, demonstrated by a clear scope of practice for their work
  2. the establishment of a curriculum for CHW education, training, and official licensure
  3. a strong coalition advocating for CHW integration, who effectively explained how this strategy saves money and improves health.

CHW services have been proven to improve healthreduce health disparities, and lower healthcare costs. Unfortunately, CHW programs are often limited because they do not always have adequate, reliable funding and are sometimes not fully integrated into patients’ ongoing care plans.

Minnesota Medicaid started funding CHWs in 2007. Currently, the state supports services for the roughly 700,000 enrollees in the program, which consists of approximately 45 percent people of color. This relatively stable funding allows physicians and other practitioners to consistently and intentionally include CHWs on patient care teams, not just as an occasional add-on.

In part two, we describe how organizations in New Jersey and New Mexico are targeting services to the patients in their Medicaid programs with the highest needs, thereby reducing health disparities while cutting costs.

*We use the term “community health worker” here to refer to a broad range of occupations including, but not limited to, promotores, as they are known in Latin America. While these occupations serve different needs and have vastly different histories, they all fill a role in extending medical, social, and educational services to their own communities.