Historically, the U.S. healthcare system has evolved based upon the presence of an “event”, i.e., the need for a visit – planned or impromptu – to a medical provider and/or facility. The inefficiencies, glut of utilization and exponentially rising costs that flow from it as funded by the long-standing “fee-for-service” (FFS) payment methodology have been well chronicled to date. Even with the advent of a variety of risk-share payment models, medical costs remain out of control due to the complexities of operationalizing such models across a heavily siloed healthcare continuum.
Fast forward to today. In walks Value-based Care (VBC) – a payment model that aligns desired health outcomes with funding. With the Centers for Medicare and Medicaid Services (CMS) signaling a move to its exclusive use and history teaching us that where CMS goes so eventually do the commercial healthcare markets, demonstrating “outcome achievement” is now the name of the game for players in the industry. That is why industry stakeholders who currently hold the medical cost risk are investing in the rapid enablement of VBC models across their partner landscapes and beginning to directly link provider pay to the ability to demonstrate improved health outcomes for the consumer. However, this enablement goal is requiring a significant paradigm shift for both the financial risk holders and their partners, while simultaneously revealing incentives to overcoming the barriers that impede making the shift a reality – and doing so at scale.
A Paradigm Shift
A critical ingredient in making VBC work is gaining a holistic view of the individual. This requires seeing them not only through the lens of the possible medical interventions but also within the context of the individual’s social and economic conditions, which research shows have a disproportionate – as high as 80% – impact on their health status. These conditions are referred to as social determinants of health (SDOH) and include education, economic and housing stability, food insecurity, access to transportation, and community support.
As you read this, you may be thinking: “This is not new. We’ve known this for a while and just changed the label to SDOH.” You would be correct. As an industry, we have become very effective at screening for and identifying SDOH needs but have not yet effectively and consistently acted on the information. With 81.0 million Americans served by Medicaid today, up from 62.9 million in 2009, and the potential for Medicaid expansion driving future estimates up dramatically, the stakes have never been higher, and our need to figure this out and do so at scale has never been more important. The U.S. spends nearly $4 trillion annually on healthcare; understanding, accounting for and shifting our funding priorities to what is driving 80% of the costs is our best chance to realize the promise of VBC and controlling, or even reducing healthcare spending.
Incentives in the Mastery of SDoH
Providers, payers and community programs alike share two major incentives to succeed at truly mastering SDOH: achieving desired outcomes and generating sustained financial impact.
As was stated earlier, for VBC, positive outcomes rule the roost. The paradigm shift comes through the personalized, desired outcome for an individual guiding the care path versus the suggested direction of the historical, medical-resource-centric interventions.
For example, becoming a well-managed diabetes patient is the desired outcome for an individual whom we know from all the data we collect is economically disadvantaged, has Type 1 diabetes, and has no transportation of their own. Are we better off focusing people and financial resources scheduling yet another visit with a quality endocrinologist and an extensive education program on the importance of diet and blood sugar measurement – even when we already know their transportation challenges not only render completing the provider visit unlikely but also is the reason they eat fast food three times a day – making the education sessions pointless?
Or, conversely, could we achieve a better outcome by removing the need for transportation altogether and automatically flagging them for a nurse practitioner telemedicine visit, automatically booking it via SMS text or social media, and making an appointment with a local food bank walking distance from their residence for access to healthy food and programs to build skills to prepare it? Intuitively, it is the latter given our experience as an industry proving that personalized care drives the highest chance for consumer engagement.
From a provider’s perspective, SDOH generates sustained financial success in consistently delivering desired outcomes, which maximize reimbursements and their top-line revenue. For the payer, it takes the form of cost reduction from a “1 + 1 = 3” effect obtained from consistent delivery of desired patient outcomes – the potential for lower utilization at a much lower cost of care. This is enhanced by applying tried and true techniques to SDOH, like network tiering (for quality, expertise, capacity, geography, etc.), risk/fee sharing arrangements, and applying artificial intelligence (AI) and machine learning (ML) to identify high-value patients. Community programs are incented by the ability to move beyond their donation-based coffers to establish new revenue sources and sustained financial impact that underwrites program investment and growth – if that weren’t enough, consistently delivering quality outcomes to members of the community fits squarely into their missions, too.
SDOH Barriers and Levers for Scale
Make no mistake, SDOH is currently hard to do at scale. With the requirement to coordinate across multiple disciplines and challenges running the gamut (from accounting for population level impacts of patient/member turnover, to determining how much to pay community providers, to managing the potential for capacity constraints in a heretofore largely volunteer-based service) the ROI on the investment in SDOH remains a work in process.
However, being fully prepared to perform at scale tomorrow is greatly enhanced by building levers for scale into your approach today:
- Use AI and ML to target the most vulnerable individuals and do it now – SDOH is not for your entire population; as such, prioritize the step of defining the criteria that yield the best outcomes.
- Create the following at the “enterprise” level as capabilities required for critical inputs into SDOH/other core processes to better meet partners where they are technically.
- Digitization of unstructured content – this is NOT simply storing a PDF in a database; it is efficiently extracting and storing granular information regardless of source information format.
- Capture and permissioned sharing of patient/member consent – with expanded services and partners comes more complexity; elevate consent to have a single source across all services/lines of business.
- Electronic visit verification – required today for home health visit reimbursement in Medicaid with likelihood to expand its reach to SDOH.
- Integrate SDOH payments into the scale used for the rest of your enterprise – plan for and expect EDI and automated procedures in payment to community service organizations.
With Value-based Care (VBC) beginning to replace the traditional Fee for Service payment models used in U.S. healthcare today, both payers and providers are investing in the rapid shift toward linking demonstrated outcomes with the payments. A holistic view of the individual is a critical ingredient in making VBC work at scale and includes seeing them within the context of their social and economic conditions, which account for up to 80% of their medical status. The shift is driven by aligned incentives, both altruistic and financial, across all stakeholders, making the ability to share data securely and confidently the key to enabling this shift at scale. Fortunately, the technology to make this a reality is available now.