Our health is influenced by so much more than the inner workings of our body. Housing, financial stability, food access and transportation – factors widely known as social determinants of health — all impact how healthy we are as individuals and communities. Despite broad acceptance that social factors affect health, U.S. health care organizations don’t typically fund social programs to address them.
It comes down to something called the “wrong pocket problem,” which occurs when one group won’t fund a program that is socially beneficial because the financial returns go to another group, said Jonathan Shaw, MD, a clinical associate professor of medicine in primary care and population health.
Health care organizations and insurers in the U.S. don’t have an immediate financial motivation to fund social interventions or programs that prevent illness or reduce health care use, Shaw said. Programs like Medicaid and commercial insurers typically reimburse hospitals and clinics for patient visits, procedures and other medical services they provide. Health care systems generally can’t be reimbursed for social services, and they may even lose money if there is a reduced need for high-cost health care services, Shaw said.
Some hospitals, like Stanford Health Care, embrace the opportunity to support their community by covering the costs of unreimbursed care and creating a multitude of other community benefit opportunities through strategic partnerships.
Shaw is hopeful that the U.S. health care system can move to a new model that better serves individual and community health. Some states and payers, such as Medicaid, are starting to financially reward hospitals and other health care entities for positive patient outcomes and efficient health care spending, instead of focusing only on the number of services provided. But to obtain wider adoption of this quality-over-quantity model, health care systems and payers alike need more evidence that social services reduce health spending.
To this end, Shaw has teamed up with a coalition of social service agencies in New York called Healthy Alliance. Healthy Alliance has curated a network of social services that address housing, employment, food access and other social issues, and it connects these services with health care providers. The idea is that doctors in the Healthy Alliance network can refer patients to specific programs to help secure the social assistance they need.
With a three-year grant from the Robert Wood Johnson Foundation, Shaw and colleagues will study the impact of Healthy Alliance on patient health outcomes and health care spending to see if communities with Healthy Alliance have measurably better health and seek fewer reimbursements from Medicaid and other payers than those that don’t.
I spoke with Shaw to better understand how social determinants affect health and how his new study could address the wrong pocket problem.
What are the biggest challenges to addressing social determinants of health on a large scale?
Historically, addressing social determinants hasn’t been viewed as the job of health care systems, but we in primary care increasingly recognize that it’s something we need to consider. Social services and health care are not used to working together. If we as a medical system say that stable housing and other social needs are important and we fund programs to support that, it creates a problem.
Traditionally, payers reimburse only for medical services provided, so when a health care system helps pay for the social needs of a patient, it can’t get reimbursed for those costs. And although there is an effort to shift to value-based care, as opposed to service-based, for the most part, health care systems are still reimbursed only for services. So if individuals stay out of the hospital, then the hospital may actually lose money.
However, I think there’s a more universal awareness among physicians and others in the health care system that the care provided after someone is ill addresses only a small part of the problem. We need to work on the big picture if we are going to be more cost-effective and thorough in caring for patients.
How is Healthy Alliance’s approach different from that of other social assistance programs?
Healthy Alliance uses a fairly unusual model. It is organized as an independent practice association, which brings organizations together under a single entity that can negotiate contracts with the health care system. What’s novel is that it puts social care on equal footing with doctors and gives the social service groups a way to engage with the health care system as equal players. It’s about building a shared network and culture change where health care and social services are working together.
In addition, Healthy Alliance uses Unite Us, which is an online referral platform that lets a doctor electronically refer a patient to multiple community service agencies and keeps the doctor informed of the outcomes. The big key is working in a closed loop: Just as I may refer a patient to cardiology and expect to hear back so that I know that the patient’s heart needs are being met, I want to be able say, OK, their housing needs are being met.
What is your overall goal in evaluating Healthy Alliance and its closed-loop system?
Healthy Alliance started in six counties and has now spread to 22 counties in New York. It’s grown rapidly, but the open question is whether Healthy Alliance truly leads to cost savings and better outcomes in terms of health care use. We are analyzing its impact on patients and health system spending in the six founding counties, and comparing that with patient data from neighboring counties without Healthy Alliance to see if there is a demonstrable improvement in ER visits, hospitalizations, medication adherence and spending, among other things.
My goal, working with my colleague Todd Wagner, PhD, a health economist, is to evaluate the Healthy Alliance model and, we hope, make the case that investing in connections between health care and social programs is financially and socially beneficial. That may be an optimistic outlook — you’re taking a lifetime of social factors, often infrastructural factors, that lead to poverty, and you’re implementing one intervention to meet people’s needs.
Recognizing that, we are applying for funding for the next phase, which will include interviewing patients, community members and stakeholders to get a sense of whether the closed network increased connections and broke down the walls between health care and social care. We may not see concrete benefits in terms of health care dollars yet, but that doesn’t mean it is not benefiting the community. If a patient says this service is life-changing, that’s still pretty powerful.
Photo by Blue Planet Studios