Health systems in the United States spent up to $2.5 billion on SDoH programs between 2017 and 2019. Changes are being made every year to support SDoH initiatives, but unfortunately, not enough flexible spending has been offered to health plans and health systems.
Before allocating funding and resources to address SDoH, it’s important to have a frank discussion with your team to assess the value of a social services referral network and your organization’s network readiness. You should consider a variety of factors, including your organization’s long-term goals, which populations you want to target, and how much financial and operational resources you have to allocate to SDoH solutions.
We know social drivers have a direct impact on health, but preventative measures can be costly and you want to ensure that ROI is possible. If you’re considering an SDoH investment, you’ll want to take the following factors into account.
SDoH software costs
When you’re investing in new technology or software, you want to ensure that your organization’s needs are met. The best SDoH systems will allow you to access a directory of resources, coordinate care between multiple providers, pull reports on social services referrals for easy tracking, and develop partnerships with social service providers. This technology or software should comply with federal and state privacy regulations and allow for interoperability, so the platform is embedded into your organization’s existing workflow.
If you haven’t already allocated staffers to develop your SDoH intervention, it’s time to broaden your team. In addition to securing experts in SDoH or population health, you may need more IT and data personnel to support data collection and sharing, evaluation, and ongoing data-informed program development. The best SDoH solutions will incorporate data collection and analysis to help you determine which preventative measures should be maximized.
Social risk assessment needs
To achieve the most optimal population health outcomes, you’ll want to consider social risk scores, which can be assessed using predictive analytics. Knowing which members face housing instability or neighborhood stress, you can make more strategic decisions. If you know, for instance, that chronically ill patients have a high risk of food insecurity, you can develop a food program that targets these specific members.
SDoH program costs
One of the best ways to achieve ROI is to establish specific goals and invest in reliable community partnerships to build customizable programs. If you know, for instance, that chronically ill patients face a higher risk of food insecurity, you can work with a local organization of your choosing to pay for a select number of food boxes, which may be home delivered to the individuals in need.
Utilize a calculator to assess your costs
The Commonwealth Fund’s ROI calculator is a free tool designed to help payers and providers plan sustainable financial arrangements for the delivery of SDoH programs.
According to The Commonwealth Fund, “the tool’s basic algorithm calculates the financial returns of partnerships by subtracting the expense of offering social services from the financial benefits of avoided medical events.” Therefore, to use the ROI calculator you’ll need to estimate the cost of medical events (such as falls, hospital admittances, or emergency room visits) in the absence of SDoH services in order to compare the cost of medical events once social services are implemented.
The calculator requires an estimate for each medical event and each relevant social service offered. If your organization does not have specific program data available, you can use input data from two helpful Commonwealth Fund resources:
- The Average Cost & Utilization Data table, which provides national averages for healthcare utilization rates and costs.
- The Evidence Review, which provides a list of SDoH programs, studies, and evidence of their costs and impacts as collected from peer-reviewed and gray literature.
To determine if your organization is ready for a referral network, take our SDoH Network Readiness Discussion Guide and review the discussion questions with your team.