The evidence of the disproportionate impact of the COVID-19 pandemic has galvanized calls for change and a renewed determination by local, state, and national regulatory bodies to make health care more equitable and reduce the long-standing disparities in health outcomes. The disproportionately detrimental effect on the health and well-being of various patient groups is not only a moral issue but also a threat to the sustainability of the US health care system. A recent estimate puts the cost of current US health inequities at approximately $320 billion. If left unchecked, the cost of health disparities could reach $1 trillion or more by 2040.
Addressing the deeply seated inequities within health care is a tremendous challenge, but the Centers for Medicare and Medicaid Services (CMS), along with other payers, have taken bold action. This includes new CMS proposals and policies that rely on the use of the Area Deprivation Index (ADI) as a central tool for identifying underserved communities.
In this article, we focus on how the ADI is being used in Medicare accountable care organization (ACO) initiatives to target support for organizations caring for disadvantaged and marginalized groups. Targeting support is important but complicated because of the great variety of communities across the country, including differences in cost of living and population density. The ADI has been a useful tool for many research efforts, and it offers several advantages including accessibility, timeliness, and ease of use. Nonetheless, as we discuss here, the first applications of ADI within Medicare payment policy have significant limitations that need to be addressed to ensure that Medicare is successful in its efforts to achieve health equity. While our focus is on the ACO-related policies, we note that CMS has also communicated the prospect of using ADI in the Medicare Advantage Stars program.