Why Payers Should Care about the Social Determinants of Health

Millions of Americans face basic survival needs that place a low priority on obtaining healthcare, and yet these same needs are linked to poor health outcomes. Such barriers may include geographic distance, housing, transportation, financial support, and food security, to name a few. These “social determinants” account for 80% of health outcomes, which means that the majority of our health care costs can be attributed to non-clinical factohomeless womanrs. Given that social determinants play a more significant role in the lives of vulnerable populations that may be disabled and living in poverty, this is important to payers who are now managing these populations through the Medicaid Expansion, Health Insurance Exchanges, and Dual-Eligible Demonstrations.

Addressing the social determinants is a smart business decision that can significantly decrease cost and utilization. Research supports that unmet social needs are associated with higher rates of hospital admissions, readmissions, and emergency room use. For example, supportive housing has been shown to decrease Medicaid costs by up to 67%, including reduced emergency room visits and inpatient admissions.

If this is true, why haven’t more payers addressed the issue? First, these needs are complicated to meet and do not typically fit into a managed care model. Reducing these barriers to healthcare requires engaging people in their own communities where they live, and appreciating that all healthcare is local. Further, since these are non-clinical issues, using clinicians or a medical model to address the needs is a mismatch. This is why Community Health Workers (CHW) can be especially impactful. Second, there are significant payment challenges in a system that is predicated on medical loss ratios and fee-for-service billing from credentialed providers. However, some payers are taking a novel approach to the problem. Kaiser has developed a community benefit strategy that directs funds to address social needs, and uses medical teams to screen for food insecurity. The Affordable Care Act also provides three innovative health system changes that increase CHW roles:

  1. Increased access to preventive health services under Medicaid that allow states to designate non-licensed providers (i.e., CHWs) to provide preventive services
  2. State Medicaid programs can create Health Homes for beneficiaries with chronic illness, and several states have designed health homes that include or refer to CHWs
  3. Funding for State Innovation Models, in which 4 of 6 states currently implementing their model have included CHWs in their design

Isn’t it time that people should stop having to choose between basic survival and their healthcare? We have an unprecedented opportunity to bring hospital systems, providers, community organizations, government agencies, and payers together to solve this national challenge. Let’s not waste it.

1727019About Dr. Indira Paharia, Executive Vice President
As Executive Vice President of Healthcare Strategy and Services, Indira Paharia leads product design and strategy for Integra’s community-based services. Dr. Paharia is a healthcare executive with over 15 years of experience in managed care, behavioral health, and program development. Previously, she was the Corporate Vice President of Clinical Programs, Policy, Research & Development for Molina Healthcare Inc. Dr. Paharia serves as a National Advisor to the Substance Abuse and Mental Health Services Administration (SAMHSA) and is a published author on the biopsychosocial integration of medical and behavioral services.

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