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Pricing & Contracting

Modeling SDOH financial sustainability

Posted by on 08 December 2020
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By Maureen Hennessey, PhD, CPCC, CPHQ, Senior Vice President and Director of Value Transformation, PRECISIONvalue

For decades, health plan and system clinician/executives like myself have recognized that adverse Social Determinants of Health (SDOH) detract from clinical outcomes and add to healthcare costs and health disparities. Adverse SDOH include lack of access to therapies, food and housing insecurity, and health literacy, including an emerging, alarming problem in this Pandemic-Infodemic Era, the inability to discern health disinformation. Affordable Care Act (ACA) mandates for hospitals to perform community needs assessments and participate in community health planning, CMS Medicaid waivers supporting coverage for SDOH services, and CMMI alternative payment model pilot programs aimed at addressing SDOH have added impetus for initiatives to tackle the pernicious risks presented by adverse SDOH.

It is therefore unsurprising that at least 917 hospitals have invested a minimum $2.5 billion in addressing SDOH during 2017-19. Health plans including Humana, Anthem and Neighborhood Health Plan also have initiatives to tackle SDOH such as food insecurity, unmet housing needs, and social isolation.

Design Thinking Concepts: How they can help

In developing a financially sustainable model, design thinking offers helpful guidance for evolving a model suited to an organization’s unique priorities. PRECISIONvalue has adapted design thinking concepts to support healthcare collaborations, building a process that starts with gathering and understanding key data; identifying and exploring unmet needs and potential solutions; and implementing select stakeholder solutions and pilots. Below are some key considerations to help inform your SDOH program.

Understand: Why should your organization develop an SDOH strategy?

As an executive with plan and health system experience, I’ve found that three factors guide successful SDOH strategies anchored to the Triple Aim: Managing total cost of care; improving clinical outcomes, and enhancing patient experience. In a survey PRECISIONvalue fielded of health plans and systems about their rationales for addressing SDOH, the majority of respondents selected clinical outcomes (86%), alignment with their organization’s mission (79%), and total cost of care management (71%) as most significant.

A recent Health Affairs article noted that investments by health systems are disproportionately being made by systems in Medicaid expansion states and/or participating in alternative payment models, indicating that business-case considerations are likely playing an increasing role. Health plan accreditation standards for broadening population health initiatives may also be a factor, along with imperatives to reduce costs for certain conditions. Thus, building a financially sustainable model requires recognizing how SDOH strategies may support your organization’s specific priorities and mission.

Explore: What are top unmet needs? How to prioritize initiatives to address them?

Crucial to the exploration process is identifying success metrics that will drive an organization’s program. In the PRECISIONvalue survey, reduction of admissions or readmissions (93%), reduced emergency department utilization (93%), and improved performance on chronic disease quality measures (89%) were drivers for initiating SDOH activities. Companies like Socially Determined utilize their analytic platform to identify social risk for individuals, populations and communities so that organizations can quantify the impact of that risk, integrate with existing infrastructure (eg, EHR or case management system), measure ROI, and prioritize key interventions.

Successfully mitigating the impact of SDOH (eg, lack of food or medicine; health literacy/disinformation barriers) and their associated costs may require innovative referral arrangements, acquisitions or partnerships, and alignment of priorities and initiatives within a multi-year planning process.

Implement: Review, Recalibrate, and Resolve

Following implementation of SDOH initiatives, many organizations find a continuous quality improvement process can help sustain the viability of their model. This process often includes review of process, clinical and financial outcome metrics, and consideration of unanticipated consequences of changes, with recalibration as needed, reaching resolution, for example, on the expansion or continued modification of a pilot, conclusion of some initiatives, and inclusion of new ones. Summaries of “lessons learned” can inform and sustain a financially and clinically robust model.

Looking to 2021

Population Health Management continues to evolve into Precision Population Health Management with more customized coordination targeting the COVID-19 pandemic-infodemic. Developing financially and clinically sustainable SDOH models to maximally impact health disparities will be vital to mitigating traditional and new problems unique to this era. Design thinking concepts can help identify relevant milestones for your organization’s journey.

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