With the nation’s pediatric care infrastructure under growing strain, alternative payment models that incentivize preventive measures to keep children out of the hospital could gain steam.
Durham, N.C.-based Duke Health is among a handful of organizations participating in the Integrated Care for Kids, or InCk, model. CMS launched the voluntary model in 2020, aiming to incentivize upstream, cross-sector interventions by reimbursing health systems for addressing social determinants of health. Angelo Milazzo, MD, chief medical officer of integrated practice at Duke Health, described it as an ambitious endeavor that flips the traditional fee-for-service model on its head.
“It takes a different, much more holistic approach to the care of children by looking at not only the direct delivery of medical care, but associated services that are so impactful on children’s health,” such as those that tackle food and housing insecurity, transportation barriers and education, he said.
The model is structured so health systems receive payments for working with community-based partners and nongovernmental organizations to connect children and their families to resources that ultimately demonstrate a positive effect on their health and reduce preventable hospital stays or ED visits.
“If we can show in the long term, for example, that a diabetic has better glucose control when we connect them to nutritious food, then we want a mechanism to be able to reward the health system for doing that,” Dr. Milazzo said. “That’s what this nontraditional payment model is trying to achieve.”
Another example of provider efforts reimbursable under the model is working with community and private partners to go into housing complexes in underserved areas and replace old carpeting to prevent asthma complications in children.
While reduced hospital use is a positive indicator for patient health, it also translates to fewer billable encounters for hospitals already navigating tight financial margins. The InCK model acknowledges this economic tension by compensating health systems for their preventive efforts and recognizing that community-based interventions can be just as critical to children’s health as clinical care.
“If we’re going to have less of those kids, there has to be a way for the system to recuperate some of that potentially lost revenue,” Dr. Milazzo said. “Those payments for connecting patients with these other services are meant to fill in some of that gap.”
While still in its early stages, Dr. Milazzo said the model offers one potential solution to help stabilize and maintain access to high-quality pediatric care. Over the past 20 years, hospitals across the U.S. have shuttered pediatric units due to financial strain and persistent workforce shortages — a trend that, if left unaddressed, could significantly limit access to specialized care for millions of children.
Dr. Milazzo said Duke is just beginning to see results from its initial demonstration project under InCK, which focused on food insecurity.
“Our team has already been able to show that when you address food insecurity before it becomes a crisis you actually can drive and improve certain KPIs that we look at,” he said.
In the next few years, Dr. Milazzo anticipates models such as InCK will play a larger role in helping systems reduce avoidable hospital visits and improve community health while preserving limited pediatric capacity for children with the most serious and complex needs.
“Proactive models where the investment is made up front and as a preventative measure I believe is going to be a huge part of what children’s hospitals and other health systems will do in the future,” he said.
