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Aligning incentives for kids' health


What kind of change could occur if advocates for kids’ health shared similar incentives? Today, partnerships between key stakeholders – health systems, providers, community organizations, payors – are complicated because of the distinct contradictory incentives that shape their work.

For example:

  • Hospitals are largely paid on case-rates, while physicians are often reimbursed on a fee-for-service basis.

  • Health insurers are still designed to approve or deny treatment for clinical care, rather than promote the utilization of services that improves overall wellness and reduces medical risk, which may not be within the medical field.

  • Community organizations, whose work contributes to better health outcomes, are often funded through a mix of public and private dollars, with each funding streams attached to different eligibility criteria, measures of success, and funding horizons.

  • Families are taking on greater shares of their healthcare spending, and continue to shift to high-deductible health plans. Though they have incentive to be discerning consumers of health care services, there is limited transparency and comparability of critical data points like total cost, out-of-pocket share, quality and safety outcomes.

These financial incentives are so familiar to each stakeholder that they almost become invisible, accepted as something that is beyond ability to change. In truth, these incentives – and the systems that perpetuate the incentives – are possible to change. And, in doing so, can facilitate even more effective partnerships to improve kids’ health.

Where to start:

Today, stakeholders employ disparate methods to categorize the children and families they serve, if they record data on service delivery at all. Children may be identified by a medical record number, a Medicaid identification number, a social security number, a case-number for child welfare, a student identification number, or so on. These identifiers do not translate across different systems, nor do they consistently roll-up to a family unit. Research is clear that – particularly for pediatric populations – understanding and engaging the family unit is critical to achieving long-term, positive results to improving health and stability.

One way to facilitate this work is to endorse a shared, unique indicator to identify children, coordinate care and measure outcomes. If organizations are able to illustrate the real journey that a family takes through different social, medical and community programs, those organizations will be better able to articulate opportunities for alignment, potential for improved outcomes, and establish shared measures of success.

There is no silver bullet to addressing the complex and conflicting incentives in the broader health care community. These incentives have taken years to evolve, and will take years to organize and align. However, if organizations have support to begin to understand and communicate about populations served in a consistent, shared language, then one large barrier to the ultimate outcome has been reduced.


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