Managed Care Organizations Trailblazing Social Determinants of Health

Federal and state rules have enabled spending on nonmedical services that have health benefits such as food security.

Managed care organizations (MCOs) are on the leading edge of efforts to strike a better balance between health and social service expenditures, a recent article in JAMA says.

Evidence is mounting that countries with higher social services spending such as disability, unemployment, and housing have better population health outcomes. Among Organization for Economic Co-Operation and Development (OECD) countries, higher social services spending is associated with higher life expectancy, lower infant mortality, lower prevalence of chronic diseases, and lower all-cause mortality.

MCOs are taking a leading role in addressing social determinants of health, the JAMA article authors wrote.

"By expanding the scope of service delivery as part of managing population health risk, managed care companies can invest in services and supports that meet their members' health-related needs, benefit from reduced spending on medical care, and leverage business principles to justify resource reallocation," they wrote.

The Centers for Medicare & Medicaid Services (CMS) have enabled MCO expenditures for social services.

In 2016, CMS amended the Medicaid managed care rule to prompt Medicaid MCOs to help patients with nonmedical expenses that were considered crucial to achieving health outcomes and cutting costs.

Under the CMS Accountable Health Communities Initiative, many Medicaid MCOs assess patients' unmet social needs, including housing instability, food insecurity, utility needs, interpersonal violence, and transportation requirements.

An increasing number of states are requiring Medicaid MCOs to address social determinants of health as part of contractual agreements. In New York, The Empire State's Value Based Payment Roadmap requires MCOs to offer startup funds for partners in Value Based Payment agreements who are conducting social determinant of health interventions.

Berwick's perspective
 

MCOs cannot take on social determinants of health single-handedly.

"Even if all MCOs were appropriately incentivized to invest in upstream social services for their members, the sum of these investments would be insufficient to create the system for providing social services and blending them with medical services to optimally serve all U.S. residents," the JAMA article authors wrote.

Healthcare organizations must build partnerships to address social determinants of health in the communities they serve, Don Berwick, MD, former CMS administrator, told HealthLeaders at last month's IHI Forum.

"Cincinnati Children's Hospital Medical Center is working with dozens of organizations in the city with the shared goal of improving outcomes for 60,000 disadvantaged kids in Cincinnati. They are not trying to do it alone," he said.

Hospitals can also look for economic opportunities to engage distressed communities, Berwick said. "Hospitals account for about $750 billion of economic activity—employment, construction activity, and supply chain."

Opportunities to generate partners through economic activity include hiring from those communities, using construction firms from those communities, purchasing products in those communities, and investing in community infrastructure such as housing.

"We're going to spend the money anyway. Why don’t we spend it where we can work on progressive income redistribution and opportunities?" he said.