DISCUSSION PAPER Redesigning Provider Payments to Reduce Long-Term Costs by Promoting Healthy Development Nathaniel Z. Counts, JD, Mental Health America; Neal Halfon, MD, MPH, UCLA David Geff en School of Medicine; Kelly J. Kelleher, MD, Nationwide Children’s Hospital; J. David Hawkins, PhD, University of Washington School of Social Work; Laurel K. Leslie, MD, MPH, American Board of Pediatrics; Thomas F. Boat, MD, Cincinnati Children’s Hospital Medical Center; Mary Ann McCabe, PhD, ABPP, George Washington University School of Medicine and Health Sciences; William R. Beardslee, MD, Boston Children’s Hospital; José Szapocznik, PhD, University of Miami Miller School of Medicine; C. Hendricks Brown, PhD, Northwestern University Feinberg School of Medicine Abstract | Cognitive, aff ective, and behavioral health (CAB) conditions are among the costliest and fastest growing in the United States. An array of interventions is demonstrated to be eff ective in preventing or mitigating these conditions and off ers the possibility of lower costs and improved lifelong health. These eff ective interventions have not been widely integrated into health care, and current health care reform eff orts have spurred limited additional uptake. Redesign- ing incentives to maximize life course CAB health is critical to reducing health costs and improving population health. Future health care reform eff orts will need to redesign incentives by developing quality measures of CAB developmental outcomes for accountability, creating payment methodologies based on the expected value of changes in these out- comes, and ensuring suffi cient reimbursement. These three changes would allow for timely incentives for eff ectively promoting life course CAB health and potentially reducing future health system spending. Health care reforms will also need to engage other sectors that contribute to and help optimize CAB health, including child care and education. Introduction contributing to the intermittent evolution of US health care delivery systems over the past century. The pro- Policy makers, administrators, and clinicians face in- gression began with a 1.0 medical care system that fo- creasing demands to achieve the triple aim by reduc- cused on rescue care for those with acute conditions ing health care costs while improving quality and pop- and infectious diseases, and evolved to the current ulation health outcomes. A growing body of research 2.0 health care system, largely focused on creating ac- indicates that achieving sustainable gains in health and countable health care organizations that manage ever- lowering costs will require more eff ective “upstream” increasing rates of chronic disease (see Figure 1). This preventive and population-based interventions, which shift from the fi rst-era system to the second-era system interrupt causal pathways to chronic long-term health was driven by epidemiologic changes in mortality and conditions and optimize healthy development across morbidity (from communicable to noncommunicable the lifespan [1]. To produce greater long-term savings diseases); scientifi c advances that helped to replace and better health, US health care systems will need to simple, linear biomedical models with a more complex accelerate the implementation of eff ective prevention and nuanced biopsychosocial framework for under- and population health improvement strategies. standing health; a bevy of new technologies, strategies, One useful way to characterize and inform this and organizational advances; and growing fi nancial transformative shift is through the 3.0 Transformation constraints and demands for fi scal accountability. Framework (TF) [2]. The 3.0 TF describes the drivers Perspectives | Expert Voices in Health & Health Care DISCUSSION PAPER FIGURE 1 The 3.0 Transformation Framework. SOURCE: Counts, N. Z., N. Halfon, K. J. Kelleher, J. D. Hawkins, L. K. Leslie, T. F. Boat, M. A. McCabe, W. R. Beardslee, J. Szapocznik, and C. H. Brown. 2018. Redesigning provider payments to reduce long-term costs by promoting healthy development. NAM Per- spectives. Discussion Paper, National Academy of Medicine, Washington, DC. https://nam.edu/redesigning-provider-payments- to-reduce-long-term-costs-by-promoting-healthy-development. Today, the evolutionary pressures fueling a shift to of the most innovative interventions that one might a third-era 3.0 health system are already underway. expect in a 3.0 system have been largely grant funded, Life course health science is transforming how we un- making system-wide progress impractical until incen- derstand the epigenetic and developmental origins tive structures are redesigned and larger payment re- of many lifelong conditions, and we are witnessing forms are underway. a dramatic shift in the salience of conditions such as While initial results of payment reforms have been obesity, behavioral and mental health conditions, and promising, most of these initiatives have failed to substance use, which have complex, multilevel eco- meaningfully address some of the nation’s largest logical, social, behavioral, and developmental deter- cost drivers: cognitive, aff ective, and behavioral (CAB) minants [3]. With a focus on optimizing lifelong health health problems, such as behavioral and mental health and achieving equity from the start, 3.0 transformative conditions, self-injury and suicide, substance use dis- innovations are already prioritizing strategies that ad- orders and overdoses, obesity and chronic diseases, vance upstream prevention and health promotion at risky driving and accidental injuries, unintended preg- the individual, population, and community levels [4]. nancies and sexually transmitted infections, autism We see these fi rst stages in cross-sector health im- spectrum disorders, and premature births [9]. CAB provement strategies that address truly upstream so- health conditions have become the costliest in the cioeconomic drivers of health and health care costs, United States [10]. These conditions are also leading such as built environment and poverty [5], as well as causes of disability in the United States and are fre- in health care models such as the Accountable Health quently interrelated with other chronic physical health Communities Model [6], the Diabetes Prevention Pro- conditions, including heart disease, hypertension, and gram [7], and the Vermont All-Payer Accountable Care diabetes [11]. Many CAB symptoms and disorders Organization Model [8], which lay the foundation for emerge during childhood, often from the impact of integrating life course and health equity perspectives adverse experiences, social inequities, and environ- into future payment and delivery models. Note that mental stressors. These early experiences can impact while the current movement represents a new, system- the trajectory of brain development and increase rates wide eff ort to address population health in payment of CAB health conditions and interrelated chronic dis- systems, innovative providers have been implement- eases later in life [12]. Interventions to promote CAB ing eff ective prevention and promotion interventions health, especially in childhood and adolescence, off er for decades. Unfortunately, the 1.0 and 2.0 health pay- the possibility of substantial savings across the course ment systems did not foster these eff orts, and many of an individual’s life. Page 2 Published April 23, 2018 Redesigning Provider Payments to Reduce Long-Term Costs by Promoting Healthy Development As the burden of chronic conditions related to CAB crue, however, when a provider intervenes to prevent development increases, we fi nd mounting evidence depression or its recurrence [21,22,23]. This dysfunc- that it is possible to prevent or mitigate these condi- tional misalignment of incentives is systemic through- tions in individuals, in general populations, and in sub- out health care sectors and runs counter to the strate- populations that have experienced historical health gies that are necessary to achieve transformation to a disparities. While many preventive interventions are 3.0 health system. With appropriate incentives in place condition specifi c, some address common risk factors for CAB health promotion, health systems could off er and can prevent multiple CAB-related health condi- eff ective prevention in CAB health, with the potential tions by promoting healthy CAB development [13,14]. for reductions in suff ering and some of the related The specifi cs of each intervention diff er, but they tend health care expenses. to function by helping families, schools, or communi- This article (1) examines a possible trajectory of ties to structure interactions and the environment in health care reform and the potential of leading health ways that meet children’s specifi c CAB developmental care payment and delivery systems to more strategi- needs, and/or by focusing on the child or children di- cally leverage the promotion of healthy CAB devel- rectly to help build core CAB developmental compe- opment; (2) outlines three areas that will need to be tencies that allow the child or children to successfully addressed to create incentives for promoting CAB manage developmental transitions and environmen- health—quality measurement, appropriate incentive tal challenges in family, school, and community life. A payments, and suffi cient reimbursement; and (3) re- number of these interventions are considered evidence views other work that will be required to maximize CAB based, have been successfully implemented at a num- health and progress toward a