How Much Are Health Systems Spending on Social Determinants?

February 13, 2020 - Health systems are making significant investments in programs that address social determinants of health, such as housing, employment, and food security, according to a new study published in Health Affairs.

In analysis of public announcements of new social determinants of health programs operated by US health systems from Jan. 1, 2017, to Nov. 30, 2019, researchers from New York University uncovered at least a $2.5 billion in investments from 57 health systems that collectively included 917 hospitals. The health system funds were allocated to 78 unique programs launched during that time.

About two-thirds of the total investment ($1.6 billion) was specifically committed to housing-focused efforts, followed by employment (28 programs, $1.1 billion), education (14 programs, $476.4 million), food security (25 programs, $294.2 million), social and community context (13 programs, $253.1 million), and transportation (6 programs, $32 million).

Researchers pointed out that these investments dwarfed overall community benefit spending, which is estimated to be over $60 billion per year. Nevertheless, they determined the investments to be substantial.

“Historically, hospitals have tended to provide community benefit through uncompensated or subsidized care rather than through investment in activities not directly related to health,” they wrote in the study. But now, health systems have found a new strategy to improve outcomes and lower costs outside the walls of their organization.

Commonly-cited statistics show that social determinants of health can impact between 80 to 90 percent of patient outcomes. In efforts to improve outcomes while lowering costs, the healthcare industry including federal agencies has made a conscious effort to develop programs that address one or more social determinants of health.

Most hospitals and health systems are responding to the call for more programs, the analysis revealed. Health systems invested a median of $2 million per program and a mean investment of $31.5 million.

But some health systems are investing more than others. Researchers found that non-profit organizations dominated the investments during the study’s period. The majority of health systems (41 out of 57) publicly announcing social determinants of health programs were secular non-profit organizations, while 14 were non-profit sectarian, and two were public health systems. None were for-profit.

Compared to non-investing health systems, organizations investing in social determinants of health programs were also significantly larger and had more member hospitals. The organizations were also significantly more like to include at least one major teaching hospital, participate in an accountable care organization (ACO), and be part of a Medicare bundled payment model.

Overall, this suggests that mission and values may be the primary driver behind social determinants of health investments, researchers explained. Although, financial return and business case considerations may also play a role considering that investments were disproportionately made by systems that were in Medicaid expansion states, in Medicare’s largest bundled payment program, or in an ACO.

Social determinants of health investments may have also been concentrated among larger health systems because of the “complexity of making tangible commitments,” researchers stated. These organizations may have more capacity to launch programs that address social determinants of health than non-investing systems, they added.

But many of these programs are still in their infancy, the analysis indicated. Social determinants of health investments in simpler interventions (i.e., programs that address transportation and other social determinants other than housing) were typically pilot programs that were initially offered to a handful of patients. As an example, researchers pointed to Henry Ford Health System’s partnership with Lyft and the start-up SPLT, which offered rides to 25 patients who had a history of missing dialysis center appointments.

Other more complex programs, such as those that address housing security, were typically operated in conjunction with state of local agencies, community development financial institutions, or local community groups.

Additionally, most health systems did not specify an investment commitment duration. Of the 31 systems that did, the average time was 5.4 years. Only two programs involved health system commitments of annual expenditures for the foreseeable future, researchers stated.