Economists estimate that 80 percent of all the cost of health care relate to social determinants of health. These include everything from exercise and healthy diet and healthy weight, to avoiding substance abuse and/or other self-destructive behaviors, to ensuring that people have adequate nutrition and housing. Those are big social issues that hospitals and health systems often see as outside of their purview.
But according to a recent Deloitte Center for Health Solutions survey of about 300 hospitals and health systems, these organizations are ramping up spending on the social determinants of health.
The authors of the Deloitte research report noted that “hospitals and health systems are investing in health-related social needs, and that leadership support is high: 80 percent of hospital respondents reported that leadership is committed to establishing and developing processes to systematically address social needs as part of clinical care.” (Social determinants of health: How are hospitals and health systems investing in and addressing social needs? Deloitte, 2017)
The authors qualified their conclusions by noting that much activity is still ad hoc (i.e., occasional and only reaching some of the target population), and gaps remain in connecting initiatives that improve health outcomes or reduce costs.
Some of the key findings in the report include:
- Hospitals are screening patients and intervening around social needs, though some activity is fragmented and ad hoc
- The healthcare system’s shift toward value-based care may spur more investment and activity around addressing social needs
- Hospital investments vary and sustainable funding may be a challenge
Most spending on social needs goes to nurses, social workers and care managers to address social needs; less goes to behavioral health professionals and translators. Hospitals tend to follow the more traditional clinical care model of having nurses address social needs. (“Amid Criticism, Hospitals Fund Social Determinants Spending, HFMA Weekly, July 28, 2017)
Capabilities for addressing social needs are still in early stages of development, according to the report. These capabilities include:
- Having a well-defined process for connecting people to social needs resources
- Measuring outcomes for some of their initiatives
- Developing ties to community nonprofits or organizations that address social needs
The Importance of Addressing Social Needs
Research appears to justify social determinants of health spending by hospitals. A recent study found that unmet health-related social needs are associated with nearly twice the rate of depression, a 60 percent higher prevalence of diabetes and more than double the rate of emergency department visits. (“Amid Criticism, Hospitals Fund Social Determinants Spending, HFMA Weekly, July 28, 2017)
Stuart Altman, PhD, an economist and chairman of the Massachusetts Health Policy Commission, said, “One of the things we’re learning is how important the social determinants are—how the non-healthcare-delivery issues affect health. Most of the estimates suggest health care is just 20 percent of health.” (“Amid Criticism, Hospitals Fund Social Determinants Spending, HFMA Weekly, July 28, 2017)
The authors of the Deloitte report concluded that “The health care stakeholders we interviewed think that addressing health-related social needs is the “right thing to do,” and expect that alignment with value-based care will likely continue to spur partnerships and innovative solutions. (Social determinants of health: How are hospitals and health systems investing in and addressing social needs? Deloitte, 2017)
Marian Jennings, healthcare consultant and iProtean, now part of Veralon expert, noted “We certainly can’t solve all of those problems in our communities, but if we are going to be held accountable financially for managing the health of the population, we need to be finding ways to connect in our community to social organizations, social agencies, community agencies, public health and other partners to not only provide extraordinarily high quality health care, but to actually improve health by addressing the social determinants of health. (Marian Jennings, Financial Risks & Strategic Implications of APMs, iProtean, now part of Veralon, June 2017)
To read the full Deloitte report, click here.
Check your library for the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards. In this course, Marian and Seth discuss the financial risks of ACOs and bundled payments, the strategic risks of not participating in an alternative payment model, clear trends and the characteristics of organizations that have successfully implemented one or more alternative payment models.
For a complete list of iProtean, now part of Veralon courses, click here.
For more information about iProtean, now part of Veralon, click here.