Social determinants of health have an outsized impact on the health of vulnerable populations. Access to quality housing, nutrition, and transportation can greatly improve communities’ health, but it can be difficult to sell to investors because these determinants are in effect public goods, and not limited to those who pay for them. But healthcare economists hope they can use the self interest of community health stakeholders to improve these determinants.
During the North Dallas Chamber of Commerce Healthcare Conference, economist Len Nichols of George Mason University shared his research that details how to get self-interested healthcare systems to collaborate to improve social determinants in their communities. Not only do these factors make for a healthier population in their own right, they affect the impact of future medical interventions. “Antibiotics are of little help to those who drink polluted water every day,” Nichols’ paper, which he cowrote with doctoral candidate Lauren Taylor, in Health Affairs, says.
Other factors contribute the need for this collaboration. The Affordable Care Act penalizes hospitals for readmissions, providing incentive for the providers to make sure their patients are returning home to healthy spaces. In addition, the average household has gone from spending 7 percent of its income on healthcare in 1996 to over 23 percent today. Lastly, debt in the United States exceeds GDP, and government healthcare spending needs to be reduced if the country hopes to make a dent in the deficit. Medicare and Medicaid are around a quarter of the federal budget, a major opportunity to trim costs.
Some systems have invested in community health workers and social workers to keep patients connected to the healthcare system and are living healthful lives, but there hasn’t been any large scale investment to change social determinants from providers.
Nichols noted that there are some Medicare and Medicaid programs have loosened up restrictions on what money can be spent on, opening a door to spending these dollars on something like housing, food, or other environmental factors.
But because investing in social determinants might not only benefit those in a provider’s system, it can be difficult to convince the financial powers that be to invest in the community this way. Rather than having the government tax citizens more and provide the services, private companies may find it in their best interest to invest in another way. Health plan providers, healthcare providers, and the tex payer can all benefit from an intervention upstream of the hospital visit.
The paper, “Social Determinants As Public Goods: A New Approach To Financing Key Investments In Healthy Communities” outlines the concept. It begins by finding out which stakeholders may gain from improved housing, food, or other factors. Then, the community must identify a broker with public and private trust, such as a nonprofit. With stakeholders and broker on board, the group identifies the largest social determinant needs in the community, and finances improvements in that area. It could be access to food, transportation, housing, or anything else. Stakeholders have to be made to understand that they benefit financially if they can avoid costly patients and keep the community plugged into their primary care doctors. Next, the group must find out what the different stakeholders would be willing to pay for the investment, as each group will see different returns on their investment. The plan will make sense if the collective benefit to all the stakeholders (such as reducing emergency room visits or hospitalizations) is greater than what the stakeholders are collectively willing to pay. If this proves the case, then the broker can calculate how much each stakeholder should pay based on how much they are willing to pay and the overall benefit, so that each stakeholder benefits.
The chart below from Nichols and Taylor’s research in Health Affairs demonstrates how the concept can be put into practice and benefit all stakeholders.
Next, a vendor should be selected to deliver the intervention, such as non-emergency medical transportation, and the broker manages the services and contract. The contract can be renewed if the data holds and the plan remains profitable for everyone.
Though the plan has been implemented in certain communities across the country, it isn’t without its challenges. It can be difficult for the healthcare organizations to determine exactly how much an intervention will benefit them, or they may doubt that the chosen intervention will be delivered efficiently. Lastly, there is a risk that a patient who benefits from an intervention may switch providers or health plans thus negating the benefits of helping that person. There could also be a lack of trust for the broker or difficulty choosing the site for the intervention.
But Nichols is hopeful and believes it can be accomplished. For him, it is about communities coming together to do the right thing and benefit along the way. “That is what community is,” he said at the conference. “We can build it because we already have it.”