There is growing evidence that social determinants of health (SDoH) have a negative effect on health outcomes. SDoH are “the conditions in which people are born, grow, live, work, and age,” and they play an important role in a patient’s overall health status.
This is considered by many to be the top disruptive trend impacting the managed care space today.
Lindsey Morris, director of data science and analytics for Nashville, Tennessee.-based axialHealthcare, a pain management and opioid data firm, says managed care is well-positioned to tackle SDoH by implementing population health risk management strategies that address social factors contributing to excess spending, unnecessary use of healthcare services, and worsened patient outcomes.
“However, barriers to MCO visibility into SDoH in healthcare claims, like lack of provider reimbursement for inquiring about SDoH, non-standardized SDoH screening tools across organizations, and limited evidence that SDoH screening improves outcomes, will need to be addressed,” she says.
Fortunately, a recent CMS decision allows Medicare Advantage plans to allocate their SDoH expenses as a medical cost. This means plans will be better positioned to help members overcome foundational barriers to care.
The 2019 Medicare Advantage and Part D Call Letter released by CMS also indicates how the federal government has shifted the regulatory calculation of medical loss ratio (MLR) from administrative to medical costs.
“This new rule will enable managed care plans to be innovative in how they work with their consumer populations,” says Jason Rose, CEO of AdhereHealth, a Franklin, Tennessee, healthcare technology company. “In the year ahead, Medicare Advantage plans will augment an array of current programs and community outreach services to better address the most basic needs of their at-risk populations.”
For example, medication adherence is a predominant problem for consumers, however it is often SDoH that cause these barriers to better care in the first place. If consumers don't have food in their refrigerators, it is more challenging to engage them on the importance of medications for better health. If consumers don’t have access or funding for transportation to their doctors or pharmacies, how can they get the care needed?
“This disruptive change to managed care will positively support momentum toward critical areas of need, such as medication adherence,” Rose says. “Medication adherence issues cause $300 billion dollars of annual unnecessary medical expense, about 10% of the nation’s healthcare spend. With the SDoH rule change, health plans can improve their medication adherence strategies to capture value-based care reimbursement for Medicare Advantage Star Ratings and Medicaid Pay for Performance (P4P).”
Trey Sutten, CEO of Cardinal Innovations Healthcare, Charlotte, North Carolina, notes people’s living situation have a tremendous influence on their overall health and well-being, but it’s not something people typically or historically have connected with healthcare.
“Social determinants of health are taking a while to catch on with managed care leaders because supporting them is challenging due to cost and regulatory barriers,” he says. “However, that is changing because they have such a significant impact on health outcomes, which makes social determinants a disruptive trend to watch.”