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In Value-Based Payment, the Direct Care Workforce Matters

By Allison Cook | April 8, 2019

As individual consumers, we often use our purchasing power to encourage quality improvement in the marketplace. We select the plumber or auto mechanic with the most positive online reviews. We choose the bank that offers the most investment perks. We bypass our local bakery in favor of one that is known for better customer service.

The health care system has begun adopting a similar approach—paying for the value rather than just the volume of services—through value-based payment arrangements. In broad strokes, “value” in value-based payment is defined as higher quality at a lower cost, although specific definitions vary by program. The goal is to incentivize health care providers to make quality improvements that benefit both consumers and the health care system.

While value-based payment is relatively common in primary and acute care settings, such as doctor’s offices and hospitals, there are few existing value-based payment models in long-term services and supports (LTSS). But momentum appears to be growing. As more states consider introducing value-based payment in LTSS, it is essential that unique measures of quality in our sector—including care quality, quality of life, service delivery, and other quality measures—are taken into account.

Why the Direct Care Workforce?

One major but often overlooked measure of quality in LTSS is the quality of the direct care workforce. Because direct care workers (including home health aides, personal care aides, and nursing assistants) provide most of the paid hands-on care that LTSS consumers receive, they have the potential to greatly influence other health and quality of life outcomes that value-based payment models target.

To understand the importance of direct care workers, let’s consider an example: the role of home care workers in a value-based payment model that aims to reduce the rate of avoidable (and costly) hospitalizations among home care clients. Home care workers can be instrumental in preventing avoidable hospitalizations by observing, recording, and reporting health status changes that may require clinical attention—such as the early signs of a urinary tract infection or swelling associated with chronic obstructive pulmonary disorder (COPD). But for workers to effectively fulfill this role, they require training, support, and access to effective communication systems. A value-based payment program to reduce avoidable hospitalizations will be most successful if it specifically incentivizes providers to invest in the workforce, such as by providing funding for additional training or for improving communication systems to include direct care workers.

A few states have recognized the importance of direct care workers in their value-based payment models in LTSS. New York, for example, determined that accomplishing value-based payment goals will require greater workforce capacity. Therefore, it established a $245 million Workforce Innovation Program to enhance direct care workers’ training, including on topics related to value-based payment goals. Tennessee, as another example, includes nursing assistant workforce measures (including training rates, retention, and consistent assignment) in its nursing home value-based payment program, directly incentivizing nursing homes to invest in these workers.

Next Steps

As the popularity of value-based payment in LTSS grows, PHI will conduct research, develop guidance, and identify best practices for policymakers, payers, and providers—focusing on the critical role of the direct care workforce in achieving value-based payment goals. Look for our next publication on this topic: a case study on value-based payment and the direct care workforce in New York, which we’ll release in late spring.

Allison Cook
About The Author

Allison Cook

New York Policy Manager
Allison Cook is the New York Policy Manager at PHI. Her work focuses on New York policy issues affecting direct care workers, including Medicaid, public benefits, training, career advancement, and workforce development.
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