How Payers Can Take Action Against Racial Care Disparities

Update 3/10/2021: This article has been updated to accurately reflect Mark Friedberg's argument that care disparities in the payer industry were the result of a lack of equity measures in standard quality measure sets. A previous version implied that payers established these quality measures when, in actuality, Friedberg was referring to NCQA and CMS quality measures.

As an industry that can incentivize higher quality care and help reduce cost barriers to care, payer actions to reduce racial care disparities can have positive repercussions throughout the healthcare system.

In a recent episode of Healthcare Strategies, Mark Friedberg, senior vice president of performance measurement and improvement at Blue Cross Blue Shield of Massachusetts (BCBSMA), argued that care disparities in the payer industry largely result from the absence of equity measures from the quality measure sets which govern the healthcare industry.

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“When we look at the ratings of health plans, whether that's commercial—say, the National Committee for Quality Assurance (NCQA) ratings—or in the Medicare Advantage Star Ratings that the Medicare program puts out, not one of those measures currently is actually a measure of the equity of care received by the members of any given health plan,” Friedberg pointed out.

“I think that's going to change in the next few years, but that just gives you a sense of where the industry is right now.”

There are also structural issues that favor employer-sponsored health plans and Medicare over Medicaid programs, added Kedar Mate, president and chief executive officer at the Institute for Healthcare Improvement (IHI), president of the IHI Lucian Leape Institute, and a member of the faculty at Weill Cornell Medical College.

“The pay schedules for commercial and even Medicare, obviously, are often better than Medicaid-based schedules and that leads to Medicaid being considered undesirable insurance," Mate said. "And of course, if you look at the composition of who at the moment is covered under Medicaid, there are significantly greater people of color in that group and that leads to worse access and worse treatment. So you get more racially-based inequities in part because of the structure of how our payment system works between the three major payers."

Mate also pointed to high-deductible health plans (HDHPs) as an instigator for racially-based inequities.

Multiple studies have demonstrated the ways in which HDHPs create cost-barriers for members. Some have also highlighted the racially-charged implications.

For example, HDHPs have been found to create cost barriers among cancer patients and survivors in general, but particularly for those in the Black community. Over 22 percent of Black cancer patients and cancer survivors in HDHPs reported foregoing medication due to cost, compared to eight percent among non-Hispanic white individuals.

There are multiple ways in which a payer can help to reduce care disparities and engage in active anti-racism, both Mate and Friedberg affirmed.

Since the payer industry’s core function is to pay for medical care, insurers can play a key role in overturning local care disparities through their payment strategies, offering funds to organizations that reduce disparities, and by spending locally in a way that is conscious of systemic inequities by purchasing from black and minority-owned businesses, Mate said.

Both experts underscored the role that data collection plays in identifying care disparities and shared other tangible ways that payers can help reduce inequities in healthcare.