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COVID-19’s disproportionate impact on vulnerable populations and communities has called more attention to broad disparities in social determinants of health (SDoH). One potential positive outcome from this crisis is the opportunity to systematically address SDoH at national scale with a wave of investment and coordination in innovative, holistic services. This article looks at challenges in addressing social health needs while highlighting organizations leading efforts today.

In the early 1900s, health epidemics ranging from cholera to typhoid plagued America’s increasingly crowded and polluted cities. Public health services emerged during this time to manage the onslaught of these virulent infections.

Early countermeasures focused on “outside sources” of disease, including quarantining afflicted (usually immigrant) communities and rejecting diseased newcomers at Ellis Island. Ultimately, however, more effective interventions addressed root causes in public health.

In a wave of modernization, governments funded public infrastructure projects for clean drinking water and better sewer systems. Cities began regular garbage removal and insect spraying. Health inspectors ensured hygiene standards at workplaces and crowded apartment buildings. The FDA, founded in 1906, reinforced the importance of child nutrition and nurturing through public education campaigns.

These progressive measures focused on important living and environmental conditions – now called social determinants of health. They helped reduce the virulence of disease while also improving life quality, expanding education, lowering infant mortality and raising life expectancy.

In this century, America once again finds itself confronting a dire need for better public health services. Total health spending represents more than 18% of GDP even as chronic disease rates increase and health status metrics lag those of other advanced economies. Relative to its peers, the U.S. spends less on social care. Social barriers to health among disadvantaged populations and communities underlie America's dismal health statistics.

COVID-19’s disproportionate impact on vulnerable populations has made the nation's social disparities even more apparent. Social determinants such as economic status, access to transportation and basic care services, housing and food security, health literacy and age, race and chronic illness have accelerated COVID-19's spread and lethality.

A potential positive outcome from this crisis is the opportunity to systematically address SDoH at national scale. Numerous organizations are already applying innovative and cost-effective SDoH solutions. The challenge is to coordinate and scale their efforts and maximize their impact. This will require the removal of major barriers to better healthcare services, including changing the way we value and pay for care.

The Outsized Impact of Social Determinants of Health

Research indicates that social factors and lifestyle behaviors determine approximately 60% of an individual’s health status. Clinical care accounts for only 10-15% of health status.

Clinical care services, particularly acute treatments, account for the vast majority of America’s healthcare expenditures. The inverted relationship between health spending and sources of health status explains why America's expansive healthcare spending yields suboptimal health outcomes. Other advanced economies have more balanced spending between healthcare and social care. As a consequence, their health status indicators surpass those of the United States.

Many Medicare and Medicaid beneficiaries, in particular, confront major social barriers to managing their health. The following charts illustrate how SDoH afflict these populations:

Medicare (65+) SDoH Considerations

Unemployment, lower levels of education, food insecurity and especially transportation and social isolation play key SDoH roles in physical and cognitive decline for those aged 65 and up.

Economic Stability

  • 168,000 adults over age 65 looking for work in 2014 faced unemployment 27 weeks or longer
  • 90% of income is provided by Social Security for 43% of single recipients and 21% of married recipients
  • 1/3 of older households were either in debt or had no remaining money after paying monthly essential expenses

Neighborhood & Physical Environment

  • Estimated that in 2015, 15.5 million people aged 65+ had access to little or no public transportation, while 60% did not have close (within 10 minute walk) public transportation and 53% did not have access to a sidewalk
  • More than 8 million Americans aged 65 and older do not drive, particularly detrimental in rural areas
  • 15% of older Americans who do not drive visited the doctor less
  • Community crime and violence may correlate to higher levels of obesity, reduced physical activity and overall decline in health

Education

  • In 2018, 13.6% of people aged 65+ attained less than a high school degree, compared to 9.2% of those aged 25 – 64, limiting employment and income level
  • In 2018, 15.7% of Americans aged 65+ did not have a computer, compared to 3.4% of those aged 18-64
  • Additionally, 7.8% of Americans 65 and older had a computer without an internet connection, compared to 6.2% of those aged 25-64

Access to Food

  • 3/5 of Supplemental Nutrition Assistance Program-eligible adults over 60 were not enrolled
  • Food insecurity probability increases if an adult is: younger, living with a grandchild, has a disability, is in a Southern state, or is African American or Hispanic

Community & Social Factors

  • In 2019 34% of elderly adults felt companionship lack while 27% felt isolated
  • 28% of isolated adults reported poor or fair health while 13% of respondents who felt little isolation reported the same
  • Poverty elevates risk for mental health declines
  • Social isolation is linked to increased risks for falls, hospital readmission, dementia and even death
  • Social isolation is also correlated to cognitive decline and behavioral health issues, including depressive symptoms, sleep disturbance and fatigue
  • Factors contributing to social isolation include mobility problems, rural living, retirement and discrimination (ageism)

Medicaid SDoH Considerations

Medicaid beneficiaries often lack stable employment, face challenges paying for basic needs (housing, food, transportation) and live in communities that may be less healthy and safe.

Economic Stability

  • Half report difficulty finding work or restricted work schedules as reasons for not working more, while more than a quarter report health reasons for not working more (Urban Institute)
  • 83% of households earning less than $15,000 a year have little left over each month to spend on other necessities such as food, clothing, utilities and health care

Housing

  • High homeless numbers
  • Only one-quarter of eligible families in US receive federal rental assistance
  • Substandard housing exposes to health and safety risks such as vermin, mold, water leaks, structural defects, inadequate heating, cooling, electricity, hot water (Health Affairs) that are linked to poor health
  • Two million people in the US live in inadequate homes (healthypeople.gov)

Education

  • ~30% of Medicaid enrollees have a low health literacy (AHIP)
  • Lower health literacy (US Department of Ed) creates problems with treatment adherence, medication and difficulties adopting healthier behaviors

Access to Food

  • Medicaid members often face challenges with access to healthy food options and hunger due to income limitations and the neighborhoods they live in
  • In 2016, 31.6% of low-income households were food insecure, compared to the national average of 12.3%

Transportation

  • Medicaid beneficiaries are 8x more likely than those with private coverage to delay care because of a lack of transportation (MACPAC)
  • 66% of dialysis patients rely on others for transportation to their appointments, only 8% relied on public transport or taxi services, and 25.3% drove or walked themselves (NCSL)

Vulnerable population are typically older, sicker, poorer and have fewer resources. Many lack adequate housing and food, find transportation difficult and suffer from mental health conditions or social isolation. The chronically ill, the elderly and smokers, in particular, are at higher risk of premature death.

Not surprisingly, COVID-19 has preyed on these groups. Overall, the U.S. has 5% of the world's population but has absorbed 30% of COVID-19 deaths. The elderly, dispossessed and/or those with chronic disease constitute the majority of COVID-19's victims.

Barriers that Impede or Limit SDoH Interventions

The Centers for Medicare & Medicaid Services (CMS) and state health agencies have taken a lead in addressing SDoH more comprehensively. Medicare Advantage and managed Medicaid programs create financial incentives for plan sponsors to address members' health and wellness needs. While these initiatives are promising, the following characteristics of U.S. healthcare limit implementation of well-established practices for managing the health of large populations:

Misaligned incentives

Fee-for-service (FFS) payment models encourage the delivery of fragmented and transactional healthcare services, often in centralized, high-cost facilities. Healthcare services reactively treat illness, disease and injury. There is minimal payment for proactive services that prevent disease, manage chronic illness or address emerging mental illness.

Lack of access to primary, preventive and behavioral care

Populations with high social barriers to health often lack access to primary, preventive and behavioral care services.

Lack of holistic/community-based approach

Complex health problems require coordinated, holistic care delivery. This rarely occurs. Providers best address SDoH challenges by engaging patients and addressing their health and social care needs within a trusting provider-patient relationship.

A need for robust technology, data sharing and analytics

Most EHR systems and tools impede data sharing and patient engagement. They focus instead on controlling patient data and optimizing revenue collection. Robust data and analytics can help identify and engage vulnerable individuals.

Availability of resources

Low-income communities often lack the resources, services and infrastructure to address SDoH effectively. Solutions can be difficult to scale and/or coordinate without adequate funding, technology and operational expertise.

Investments and Innovations

As payment models incentivize care management, investment and experimentation in SDoH initiatives is growing. Private organizations are taking multiple approaches in developing SDoH solutions.

The following chart illustrates the sizable number of early-stage and established organizations addressing the specific categories of social care.

Implications for Payers and Providers Investing in SDOH Programs

Although numerous innovative organizations are addressing SDoH, they typically offer point solutions for specific social barriers. Real progress in addressing social care needs requires coordinating these types of point solutions. Large providers and payers are well positioned to assemble and operate these services within cohesive care delivery platforms that exhibit the following features:

  • Better data collection and analytics to understand member populations and target communities and individuals, improve patient identification and tracking
  • Adoption of predictive models that address care needs and gaps
  • Deeper engagement with members/patients to understand and address holistic needs, improve adherence and drive healthy behaviors and lifestyles
  • Broader integration in the larger social support infrastructure while filling gaps where necessary
  • Investment in business capabilities and processes that enhance information sharing, improve workflow, reduce administrative burden and facilitate collaboration between partners in shared-risk arrangements

To demonstrate their value, SDoH solutions will need to deliver positive investment returns over time. Cost savings and improved health outcomes will help gain executive and policymaker buy-in to devote more resources and utilize SDoH solutions more broadly.

Targeted investments in care management models generate savings over 3 - 5-year horizons. Payment models must accommodate these longer return horizons for care management programs to succeed. Again, large providers and payers are well-positioned to make coordinated SDoH investments and assess their success.

Developing effective ROI metrics is difficult but not impossible. For example, IU Health has developed the Healthcare Economic Efficiency Ratio (HEERO), which gauges actual spending on patient care against expected spending on patient care based on claims data for patients attributed to Medicare Advantage health plans or a Medicare accountable care organization.1

A Holistic, Scalable Approach: Oak Street Health

Oak Street Health, a rapidly growing network of primary care providers that delivers value-based care for adults on Medicare, opened its first care center in Chicago’s Edgewater neighborhood in 2013 and has since expanded to 55 centers in 8 states. The founding team established Oak Street to address disparities in quality of care and access to care in under-served neighborhoods with a mission to “rebuild healthcare as it should be.”

Oak Street’s model is consistent across all of its centers. As CEO and co-founder Mike Pykosz notes, “Healthcare infrastructure might be local, but the clinical needs of a diabetic are the same everywhere. We pick neighborhoods that are underserved and build our centers from scratch with one clinical model for how we treat patients and a common digital IT platform.”

Oak Street patients struggle with a litany of social barriers to health, ranging from chronic conditions and low economic status to housing and food insecurity. The population is unaccustomed to accessing preventive care and typically relies on costly ER visits. Pykosz says, “We put a lot of effort into community outreach and educating people on the importance of preventive care and regular primary care.”

Oak Street’s at-risk or capitated business model is predicated on taking the savings from reduced ER visits and hospitalizations and applying those resources to lower-cost care solutions that improve overall health status. This incentivizes Oak Street to treat patients holistically with frequent check-ups and interventions that address social barriers such as a lack of food, housing or transportation.

With the onset of COVID-19, Oak Street has transitioned much of its in-center care to telehealth visits via video and phone. “We’re doing more provider visits a day than we did two months ago,” Pykosz says, “all virtual.”

Oak Street calls their patients multiple times a day, checking on their condition, directing them to seek in-person care or testing if necessary, and educating them on the latest COVID guidelines. Oak Street also delivers groceries, medicines and medical supplies so that patients can stay safe in their homes.

Pykosz credits Oak Street’s value-based care model for giving it the operating flexibility and capacity to focus exclusively on members' health and social care needs. “We’re not worried about what’s reimbursable and whether there’s a code to do something. It’s harder for fee-for-service groups to invest in what patients actually need.”

Winning at Value

The average hospital generates around $11,000 per patient discharge. With ancillary services, that can often add up to more than $15,000 per average discharge. Success in a value-based system is predicated on reducing those discharges and associated costs by managing acute care utilization more effectively for distinct populations (i.e., attributed lives).

This changes the orientation of healthcare delivery toward appropriate and lower cost settings. It also places greater emphasis on preventive, chronic and outpatient care as well as better patient engagement and care coordination.

Such a realignment of care delivery requires the following:

  • A tight primary care network (either owned or affiliated) to feed referrals and reduce overall costs through better preventive care
  • A gatekeeper or navigator function (increasingly technology-based) to manage/direct patients to the most appropriate care settings and improve coordination, adherence and engagement
  • A carefully designed post-acute care network (including nursing homes, rehab centers, home care services and behavioral health services, either owned or sufficiently controlled) to manage the 70% of total episode-of-care costs that can occur outside the hospital setting
  • An IT infrastructure that can facilitate care coordination across all providers and settings
  • Quality data and digital tools that enhance care, performance, payment and engagement
  • Experience with managing risk-based contracts
  • A flexible approach to care delivery that includes digital and telemedicine platforms as well as nontraditional sites of care
  • Aligned or incentivized physicians
  • Payer partners willing to share data and offload risk through upside and downside risk contracts
  • Engaged consumers who act on their preferences and best interests

While none of these strategies is new or controversial, assembling them into cohesive and scalable business models is something few health systems have accomplished. It requires appropriate market conditions, deep financial resources, sophisticated business acumen, operational agility, broad stakeholder alignment, compelling vision, and robust branding.

Providers that fail to embrace value-based care for their "attributed lives" risk losing market relevance. In their relentless pursuit of increasing treatment volumes and associated revenues, they will lose market share to organizations that deliver consistent and high-value care outcomes.

Conclusion: Meeting the Surging Need for Quality Care

COVID-19 has accelerated the need for effective SDoH solutions.

Medicaid programs are already stretched thin, but their enrollment will grow with the prolonged economic downturn. At the same time, the number of uninsured requiring uncompensated care also will increase.

As the COVID-19 storm intensifies, SDoH solutions that decrease overall care costs and improve health outcomes are imperative. A keen understanding of local markets is critical in selecting the right solutions. Yet, the best solutions will also be scalable across many communities and populations.

As Oak Street Health demonstrates, innovative and effective solutions for managing the care of populations emerge when payment models incorporate prepayment and financial risk. This alignment between payment and outcomes enhances innovation, flexibility and coordination in meeting the diverse needs of vulnerable populations.

America won’t change the way it delivers care until it changes the way it pays for care. When payment and desired outcomes align, the potential for cost savings and improvement in health metrics drive investment in innovation and holistic services across the industry.

Contact: Court Houseworth

Managing Director

Contact: Kyle Stern

HealthScape Advisors, Managing Partner

Contact: David W. Johnson

4SightHealth, CEO

Cain Brothers Comments is compiled by Cain Brothers, 277 Park Avenue, 40th Floor, New York, NY 10172 Ph: (212) 869-5600. Editor: David W. Johnson. To receive our email, please register on www.cainbrothers.com. For questions regarding this publication please email dlebenger@cainbrothers.com.

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