Funder: Robert Wood Johnson Foundation

Author: Shilpa Patel, Anne Smithey, and Tricia McGinnis, Center for Health Care Strategies and Kim Tuck, Institute for Medicaid Innovation

January 2021 | Report


Given Medicaid’s role in delivering care to individuals with low-income, including many from Black and Hispanic communities, the program is uniquely situated to address health-related disparities. Value-based payment (VBP), which many payers are already using to improve health outcomes and support more efficient care, can be an effective tool in designing equity-focused payment and contracting models. The development of equity-focused VBP approaches to support care delivery transformation is an important lever that can help payers advance health equity and eliminate disparities in health care.

This report, authored by the Center for Health Care Strategies (CHCS) and the Institute for Medicaid Innovation (IMI), identifies six connected strategies to guide payers, including Medicaid agencies and managed care organizations, in developing equity-focused VBP approaches to mitigate health disparities at the state and local level. These strategies include: (1) articulating an equity goal; (2) assessing the payment and care delivery environment; (3) selecting performance measures; (4) setting performance targets; (5) designing the payment approach; and (6) addressing operational challenges. This resource is a product of Advancing Health Equity: Leading Care, Payment and Systems Transformation, a national program based at the University of Chicago operated in partnership with CHCS and IMI, and made possible by the Robert Wood Johnson Foundation.