No Reimbursement Impedes Social Determinants of Health Progress

March 11, 2020 - Hospitals are struggling to implement and sustain programs addressing social determinants of health without direct claims reimbursement, according to a recent survey of 200 healthcare experts.

The survey fielded by healthcare consulting firm Advis queried healthcare C-suite executives regarding their organizations and social determinant of health issues. Responses underscored the financial challenges hospitals and health systems are experiencing with social determinants of health programs.

“Spending up-front monies on the lower end of the socio-economic ladder just might pay big dividends in savings to our healthcare system; but for that to happen it seems the entire social safety net must be reconceived and supported with real financial backing and public support,” the authors of the survey stated.

The impact of social determinants of health on patient outcomes is at 80 to 90 percent, according to commonly cited statistics. That means physical environments and socioeconomic conditions, as well as behaviors and genetic predisposition, are significantly impacting how healthy an individual is and how effective clinical care will be.

Hospitals and health systems are best positioned to address social determinants of health and healthcare disparity issues, according to the majority of healthcare executives. However, these organizations do not have the financial resources to do so, respondents stated.

When asked what issues stood in the way of implementing programs and services to address social determinants of health, 85 percent of respondents agreed that a lack of direct reimbursement was impeding progress. That was followed by an inability for the programs or services to prove a return on investment, which was selected by 63 percent of respondents.

Additionally, healthcare executives ranked direct reimbursement at the top of their list of actions needed to help organizations address social determinant of health issues. The action was second to public policy changes and poverty supports targeting social determinants of health.

Other issues impeding the implementation of social determinants of health programs included:

• Organizational belief that addressing social determinants of health is beyond the scope and function of the organization (62 percent)
• Fearing of upsetting status quo (30 percent)
• No clear need identified at this point (12 percent)
• Another organization already fills the need (7 percent)

“Hospitals simply cannot do all they might without funding. And for-profit systems see SDOH as a net loser,” authors of the survey stated. “Without direct reimbursement for services, it’s hard to see how hospitals alone can impact socio-economic conditions and life-style significantly enough to pare the burden of SDOH issues on the system.”

Healthcare organizations are currently relying on a number of sources to fund social determinants of health programs. Chief among those sources is themselves.

The survey uncovered that the majority, over 57 percent, of respondents self-fund programs through decremental budgets. A significant portion of social determinant of health financing is also paid for through outside grants and philanthropy (44 percent and 41 percent, respectively).

These funding sources present significant ROI challenges, the authors stressed.

Hospitals and payers may feel that addressing social determinants of health is the “right thing to do,” but philanthropy may not be the right way to implement programs. The problem with philanthropy is “that it often lacks accountability and fails to produce alignment between payers’ business interests and tangible outcomes associated with those interests,” Jacob Reider, MD, explained in a recent HealthPayerIntelligence article.

Reider is the CEO of Alliance of Better Health, a company focused on helping Medicaid members and the uninsured achieve optimal health. He was formerly the Deputy Director of the Office of the National Coordinator for Health Information Technology (ONC) during the Obama Administration.

Philanthropy is the wrong solution addressing the right problems, he elaborated. “While it’s likely that payer philanthropy does have some positive effects, it’s fair to question how realistic or scalable this is.”

From reimbursement adjustments to value-based payment models, healthcare organizations have longed for more permanent financing structures for programs that will improve the health of their patients. But these policies are not widespread yet, which could threaten the overall safety-net.

“The majority of survey responses point to the need for change in our social safety net, changes that hospitals cannot make on their own,” authors of the Advis survey concluded.