In a recently released video, the president of a renowned healthcare foundation explained the complexities involved when partnering healthcare providers with hunger relief organizations. This seems paradoxical, particularly when considering mounting evidence showing that food security leads directly to enhanced public health outcomes.

Dr. John Lumpkin, who heads the Blue Cross and Blue Shield of North Carolina Foundation, called out a “harmful fee-for-service payment system.” This system coerces nonprofits to operate within healthcare’s rigid payment structures, often compelling them to alter their business processes and operational frameworks. Consequently, these entities have to deal with escalated costs and the looming threat of potential failure.

Nonetheless, a unique partnership between Blue Cross NC and the Hunger and Health Coalition of Boone, North Carolina, illustrates an alternative approach to structuring Food as Medicine initiatives. The partnership has established a sustainable payment method that empowers the Hunger and Health Coalition to dispense much nutritious food. In an innovative pilot initiative begun this year, this coalition extends its services to about 1,000 households per month, providing food hampers, deliveries, and meals for specific medical needs.

Blue Cross NC‘s financial contribution for this one-year pilot constitutes a significant segment of the Hunger and Health Coalition‘s total operational funds. It almost completely covers the budget for medically tailored meals. Maura McClain, the Director of Strategic Initiatives, stated, “It composes the major part of our healthier food budget; it’s vital in procuring that food.”

The alliance between Blue Cross NC and Hunger and Health Coalition has led to an inventive solution. Instead of attaching payments to specific services per member in a fee-for-service arrangement, the health insurer offers a lump-sum “capitated payment” that significantly simplifies the working process for the Hunger and Health Coalition.

Explaining the system of capitation—a predefined amount of money per patient per time unit, paid upfront for healthcare service delivery—McClain said, “A unique aspect of this program that makes it function seamlessly for us, Blue Cross Blue Shield, and our clients, is that we receive this lump sum and we have the discretion over its allocation.”

The Executive Director of the Hunger and Health Coalition, Jenn Bass, echoed the sentiment. She said that when Blue Cross sought information about their running costs, produce spending, and the staff ensuring effective operations; they delivered those details in good faith.

The coalition has displayed a broad approach toward its clientele, catering to specific nutritional requirements associated with various health conditions. “Our medically tailored food boxes are specifically designed for those with diabetes, hypertension, and heart disease,” McLain said.

Notably, this partnership spans across Blue Cross NC‘s business lines. Food insecurity is often linked to people enrolled in Medicaid. However, private insurers are exploring innovative payment strategies due to the high costs affiliated with clients on plans under the Affordable Care Act or employer-led coverage.

Dr. Lumpkin revealed that around 20% of Blue Cross NC‘s non-Medicaid members are at risk of food insecurity. This included members with coverage provided by their employers, Affordable Care Act participants, or Medicare members. Staggeringly, one of every three Blue Cross NC‘s Medicare members is food insecure.

Bass believes the pilot has absolutely bolstered what the Hunger and Health Coalition excels at. “For us, success resembles assisting as many individuals as possible,” she asserted. Looking at the future, Bass is hopeful about fostering similar collaborations with other insurance providers. “We aim to capitalize on the power that Blue Cross Blue Shield has bestowed upon us,” she added, noting the potential for cost savings in the healthcare system.