How Oak Street Health’s Value-Based Care Structure is Bolstering Health Equity in Underserved Communities

Written by 
Dr. Ali Khan, MD

As we approach the third year of the COVID-19 pandemic, the need for bridging health disparities and focussing on health equity has come more and more to the forefront for both health practitioners and health policy thinkers. Health equity is about ensuring everyone, regardless of age, income, zip code, or ethnicity, gets the care they need to be as healthy as possible. At Oak Street Health, we have become a leader in working towards health equity in underserved communities across the country. The main way we are able to do this is via our value-based care structure for adults on Medicare, particularly those in underserved communities with multiple chronic conditions. 

Our value-based structure allows providers like me to treat the whole person and the circumstances in which they live, not just bill for appointments and services rendered. This is very different from the traditional fee-for-service model, which mostly repairs what goes wrong rather than what works to keep people well. In doing so, Oak Street Health is creating a new standard of care in communities that have been underserved for far too long while at the same time creating opportunity and connections for patients and their families.

Value-based care providers are incentivized to spend more time with their patients because the priority is quality rather than the number of appointments. Outcomes – how healthy patients are – are the focus. Individual services – and how much they cost – are secondary concerns. When medical providers are encouraged to keep their patients as healthy as possible – and are given the leeway to do so – costs also fall; patients are hospitalized less, and medical providers can offer constant attention to a patient’s overall health and well-being.

Oak Street Health is implementing value-based care in communities across the country as one way to bridge health disparities and achieve health equity. In our structure, the government pays health clinics a flat fee to care for each patient’s healthcare needs while keeping providers accountable for the patient outcomes they achieve. 

Value-based-care providers emphasize preventive care, wellness and mental-health monitoring and maintenance – care that keeps patients healthy rather than waiting until they’re sick. Value-based arrangements also allow patients to spend more time with their doctors and nurses, to eat better, to quit smoking, and to work through non-medical challenges that get in the way of a person being healthy such as housing and food insecurity. The value-based care model also contributes to the ability of our providers to see patients an average of almost eight times per year versus the average Medicare beneficiary who sees their primary care provider just three times annually.

Studies show this kind of ongoing care results in fewer unnecessary emergency room visits and, therefore, lower costs. Here at Oak Street Health, in one value-based arrangement we participated in during 2020, annual taxpayer savings were $1,200 per patient versus the CMS target. Due to our value-based model, we have cut in half the number of our patients that go to the hospital or emergency room compared to Medicare benchmarks. Better, consistent and evidence-based screenings matter — because they identify underlying risk factors for chronic disease that, when caught and managed early, lead to better control of those chronic diseases — particularly for behavioral health conditions, which remain unrecognized in far too many patients. 

In many of the communities Oak Street Health serves, access to routine primary care is limited. We are working to change that by making significant investments in community outreach to encourage patients to engage with primary and preventative care. We are demonstrating real-world results in solving health equity challenges both by building our centers in the communities most affected by health disparities and that many times previously lacked any primary care providers at all. Being value-based even allows us to equip our centers with community rooms where activities like bingo and line dancing attract patients while also reducing loneliness.

At Oak Street Health, we not only aim to provide care in underserved communities, but we want our workforce to look like the communities we serve. More than 60% of our employees are Black, Latino or Asian versus 38% of the overall United States healthcare workforce. We have also joined the Health Evolution Forum’s Health Equity Pledge in which we aim to capture race, ethnicity, sex and language data for 50% of our patients — and we hope more — by 2023. For us, if we don’t know the backgrounds of our patients, we can’t treat them to the standards we have set for ourselves. The key link between all of this is value-based care because it opens the space for us to fuse positive health outcomes and health equity – if our focus was on the number of appointments rather than healthy patients, our workforce mirroring those for whom we care would be less important.

The progress we are seeing is exciting. The work we are doing is meaningful. Oak Street and my many outstanding colleagues are ready to accomplish even more in 2022.

Dr. Ali Khan, MD, MPP, FACP is Chief Medical Officer for Value Based Care Strategy at Oak Street Health, a national network of primary care centers for adults on Medicare.

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