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Public Health

Report: Health Insurance Should Cover Non-Medical Services

Medicaid data provides evidence that non-medical services can have huge financial and health impacts.
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Photography by Carmen Palma;

Medical care makes up just a fraction of what determines a person’s health, and a new study makes the case that Medicaid in Texas should support non-medical services because of their health impacts and return on investment. While medical experts and public health officials have long been touting the importance of the social determinants of health, the report from Episcopal Health Foundation and the Center for Health Care Strategies provides some hard evidence about why these services should be funded in the Lone Star State.

Healthcare leaders always want issues addressed upstream. Early cancer detection results in better outcomes and is less expensive to treat, and a healthier lifestyle can often prevent diabetes. In recent years, other non-medical services have been added to the conversation. Social, educational, safety, transportation, and food security majorly impact a person’s mental and physical health. If a program like Medicaid (or commercial health insurance) prevents downstream medical costs, it only makes sense to use those funds to address all the factors that impact health, especially if they are less costly than hospital procedures and expensive medication.

“Medical care makes up about 20 percent of what determines a person’s health, yet right now we spend almost all health dollars – including Medicaid – treating conditions medically and not preventing disease outside the exam room,” said Dr. Ann Barnes, a physician, and CEO of Episcopal Health Foundation via release. “We have to change the way we think about health and how we pay for it. The report shows how things could change for the better in Texas.” 

The organizations that administer Medicaid benefits can experiment with how they use government funds to improve the health of their clients. The Centers for Medicare and Medicaid Services has been more open to its funds being spent on non-medical care, as long as the impact is there through the “in lieu of services” authority.

The Texas advocacy effort focused on three areas, asthma remediation, access to affordable healthy food, and housing issues, with positive ROI for all the services. The asthma program provided asthma coaches to families to help identify triggers for a child’s asthma, develop a control plan, and look for and replace the moldy carpet or other areas. The result meant fewer visits to the emergency room, fewer absences from school, and increased confidence in handling the attacks. For every dollar spent on non-medical services, the return on investment for Medicaid was between $5.30 and $14.00.

Healthy and tailored food is another efficient health intervention. Blue Cross Blue Shield of Texas launched a program in 2019 that delivered healthy meals to neighborhoods in food deserts, and this report adds evidence to back up the impact of such services. The report details how the Food is Medicine program includes meals tailored to specific health conditions, and prescribing healthy foods can pay health and financial dividends down the line.

If a pregnant mother who struggles to afford healthy meals is enrolled in the Food is Medicine program that connects her with a local food bank for healthy food, cooking classes, and pregnancy education support. The hope is that the supports help deliver a full-term baby with no complications, which is a win for the family and those paying for the care. One study showed that Medicaid and Medicare enrollees in the Food is Medicine program decreased their emergency department visits and decreased overall medical spending by $220 per person.

While Medicaid’s role in connecting enrollees with housing is limited so far, the report discusses how Medicaid can be used for housing navigation services, community transition costs, and tenancy support services. This may include supporting those transitioning from a facility like a state hospital to permanent housing, financial assistance with the move, and helping people understand what it means to be a good tenant, how to negotiate with landlords, and what rights they have as tenants.

The housing programs will likely have the largest impact on the unhoused and those who would benefit from the wrap-around services. Pregnant women who lack housing, those experiencing domestic violence, and those with mental health issues would likely see overall health improvement given these services.

While government payors are often the first to experiment with and incentivize programs that address downstream costs, commercial health insurance companies and employers who subsidize the care of their employees could use the same logic to pay for non-medical services and reduce health costs down the line. While many companies have wellness programs and gym membership incentives, few offer more extensive assistance.

Providers, too, could use this data to change the way they work with insurance companies. What if the prescription included food, transportation, or housing support before the patient needed Lipitor or a procedure.

“This is a game changer that could improve the health and wellness of Texans most in need in an entirely new way,” Barnes said via statement. “As a philanthropy, we’ve funded asthma remediation projects and food as medicine programs that have shown great health improvements, but they were limited to patients of a single clinic or area. This report describes a great opportunity for Medicaid in Texas to cover these non-medical programs on a much larger scale across the state with sustainable funding.” 

You can explore the entire report here.

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Will Maddox

Will Maddox

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Will is the senior editor for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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