6 Ways That Health Plans Can Influence A State’s Health Equity

Invest in communities’ social determinants of health

Regulators could incentivize plans to invest in health equity and social determinants of health by incorporating health equity investments into their reviews of payer transactions or applications.

For example, a historic health equity event in New York occurred when Highmark BCBS in Pennsylvania and HealthNow BCBS in New York received approval for their health insurance merger. The historic component of this otherwise typical consolidation was the regulators’ stipulation that the companies had to invest $10 million in addressing racial and health inequities in the western and northeastern sections of New York state.

The companies had to include local policymakers, providers, and community-based organizations in the decision-making process around how to allocate these funds. Ultimately, the payers distributed the dollars among programs that would pilot blood pressure control projects among underserved communities and support mobile health and wellness teams.

This strategy might be useful, but it can also become controversial, as the Highmark/HealthNow merger demonstrated.

The state’s Departments of Financial Services (DFS) and Health (DOH) received some pushback from locals around the amount, which dissenters deemed too small to make a significant impact. The payers responded that these investments would be in addition to their existing health and racial equity investment plans.

Other health plans in New York have invested in establishing foundations that can allow them to invest more specifically. One plan organized a bicycle-sharing program, while another invested in nonprofits that support domestic violence survivors and young mothers and promote healthy nutrition among immigrants and people of color.

These investments also present marketing opportunities, which can have various impacts.

“It is important to view these contributions in the context of the resources health plans command,” the report noted.

Invest upstream

Recognizing that upstream investments may be able to reduce healthcare disparities, policymakers and regulators could analyze if upstream investments will alleviate disparities in their states and, if so, how to incentivize these types of investments and remove barriers.

Insurance regulators ensure that payers are solvent and maintain a certain amount of static capital. But payers often have more than they need. These funds could instead be directed toward health equity efforts, the report proposed.

“Many insurers, however, do maintain reserves that are many multiples higher than regulators require,” the report found. “It may be possible to tap those funds to provide credit enhancements for affordable housing, primary care facilities, or other community capital investments, making it easier for projects to attract lenders or reduce loan costs.”

Some states have already implemented similar strategies. California regulators have advised payers in the state on making investments that are both financially optimal and positively impact the environment and social needs. In Oregon, coordinated care organizations have to invest in health equity and social determinants of health to participate in the Medicaid program.

However, for this tactic to become more broadly viable, federal regulators may have to tweak regulatory barriers, such as the Department of Financial Service’s minimum loss ratio qualifications.

Support economic equity efforts

Payers can have a profound influence on local economies. If payers choose to wield that influence to purchase services and products from members of underserved communities, they can make a difference in income disparities and help improve local economies, thereby addressing a major social determinant of health domain.

States could promote this type of investment in economic development. For example, California’s Insurance Department’s diversity program enables payers to identify women-owned and minority-owned companies.

“Alongside community investments, some insurers are addressing economic instability in their communities by paying more attention to where they spend their money, and how they recruit and compensate workers,” the report stated. “Their activities resemble those of a coalition of major health systems seeking to anchor their communities nationwide through more thoughtful allocation of funds.”

Payers have also supported local economies by raising their minimum wages, funding skill-building and professional development programs for some of the most impoverished areas in the state, and tracking their own diversity spending.

Redefine network adequacy

States could consider redefining network adequacy to include diversity. As the number of Black and Latino providers remains far below these communities’ share of the US population, insurers can ensure that their networks are sufficient, not only in quantity and geographical distribution but also in race and ethnicity characteristics.

Additionally, payers should prioritize including high quality providers and community-based organizations whose voices have influence in underserved communities.

In New York, a pending waiver amendment would enable local organizations with a finger on the pulse of underserved New York communities to share data-informed needs that health insurers and providers should prioritize.

These steps should be taken in concert with other measures to increase the quantity of providers from diverse and underserved backgrounds, the report mentioned.

Establish equitable benefit design

States can introduce benefits that reduce health disparities through their Medicare and Medicaid programs and policies.

Some states have accomplished this by introducing social determinants of health benefits. Medicare Advantage plans have championed these types of benefits, introducing medically-tailored meals, pest control, companionship, and financial support for individuals with chronic diseases through benefit design.

Most employer-sponsored health plans and state marketplace plans must comply with the Affordable Care Act’s essential health benefits. The essential health benefits require plans to cover preventive care, treatment, and nutritional services, but do not require social determinants of health benefits.

New York is changing that standard. The state’s health insurance marketplace will require payers to screen at least three-quarters of their essential plan members in 2023.

Other organizations are also shifting their approach. The National Committee for Quality Assurance (NCQA) changed its Healthcare Effectiveness Data and Information Sets (HEDIS) screening measures to encompass social needs screening.

Adjusting cost-sharing for diseases that disproportionately affect underserved or minority populations is another way to support health equity. Massachusetts pursued this strategy by implementing zero cost-sharing for certain conditions that disproportionately affect Black and Latino populations.

Address bias in artificial intelligence, clinical guidelines

Artificial intelligence utilization has exploded in 2023 and has the potential to transform healthcare, including the potential to compound healthcare disparities if human biases become engrained in these systems as they have in clinical guidelines.

Insurers can counteract this trend by practicing good algorithmic oversight. This is a step that different payers have already taken, such as Pennsylvania’s Medicaid program, the Washington, DC benefit exchange, and Excellus BCBS.

“A ‘playbook’ issued by AI researchers on identifying and fixing algorithmic bias highlights the importance of ‘stewards’ who are accountable for algorithmic oversight in an organization,” the report shared.

“This would seem to be a natural role for health plans, since they may own affiliated companies that are developing machine learning tools for sale or use by other entities, rely on them for their own utilization reviews, or contract with providers who use these tools.”