Healthify Blog

Three Healthcare Trends Expected to Impact SDoH

These big-picture trends may play a role in shaping SDoH strategies in 2020

Doctor

As COVID-19 continues to spread rapidly, preliminary data shows that low-income Americans are much more susceptible to catching — and dying from — the virus. It's a powerful reminder that social determinants of health (SDoH) are critical drivers of overall health outcomes.

It also serves as an indicator of the vast disruptions we'll continue to see across healthcare and beyond. Healthcare and social service organizations are already mobilizing to address the deepening consequences of the virus. However, organizations must also take into account broader healthcare trends that may also play a role in shaping approaches to value-based care delivery.

With the impact of COVID-19 into consideration, let's look at three big-picture trends that could affect the way healthcare organizations address SDoH in 2020.

1. A surge in healthcare costs

Overall healthcare spending is expected to grow faster than the U.S. economy at large, rising from 17.9 percent of GDP in 2017 to 19.4 percent in 2027. More worryingly, the rate of spending is projected to increase as well, growing 4 percent annually through 2021 and 6 percent per year from 2022 until 2029, according to the Congressional Budget Office

In addition to those escalating costs are increases in Medicaid and Medicare spending. Per-enrollee spending as well as higher projected unemployment contribute the rise in costs — and data consistently shows that during economic downturns, enrollment in Medicaid grows. With more than 10 million Americans applying for unemployment benefits in March 2020 alone, COVID-19 will certainly be a contributing factor to increased enrollment in Medicaid. 

More broadly, while spending on Medicaid and Medicare continues to grow, the sheer depth and reach of recent disruption related to the COVID-19 outbreak calls for a closer look on strategies to curb costs and drive health equity. Healthcare organizations will likely look toward implementing SDoH strategies to help alleviate some of the financial strains while delivering high quality care. 

2. Innovations in payment and delivery systems

Managed care remains the most utilized delivery system for Medicaid and will likely continue to be the most dominant. As of July 1, 2019, 33 states reported that 75% or more of their Medicaid beneficiaries were enrolled in managed care organizations (MCOs). The shift of members into managed care is expected to continue as states explore ways to improve the quality of care and reduce the costs associated with care.

States are also expanding the scope of services included in MCO contracts such as behavioral health and long-term care services, to name a few. Additionally, almost every state with MCOs has managed care quality initiatives in place and many states are also implementing alternative payment models (APMs) to incentivize quality and outcomes.

Although most states have guidelines in place for MCOs using APMs, it's important to note that there is still a considerable amount of variation from one state to the next. For instance, consider the following high-level overview of commonalities and differences between Missouri and Kansas: 

As Missouri and Kansas illustrate, state-by-state variations in guidelines for MCOs using APMs add a further layer of complexity for payors looking to address SDoH.   

Both within and outside of managed care, states continue to experiment with ways to address SDoH, and we can expect to see more innovation in this area as states consider adopting Medicaid expansion.

3. Increased flexibility of MA supplemental benefits

In a further effort to improve health outcomes, the Centers of Medicare & Medicaid Services (CMS) recently increased the flexibility of Medicare Advantage plans, which currently cover more than a third of all Medicare recipients. Payors can now offer supplemental benefits to address social or long-term care. 

This is a major step forward in addressing SDoH, but payors have been slow to adapt.One study found that, of those that have added or expanded benefits in response to this change,  none had rolled out the new benefits nationwide. Three common challenges may help explain why:

  • Lack of community-based organizations (CBOs) that can provide SDoH services and bill an insurance company varies by region
  • Difficulty negotiating contracts with CBOs on a county-by-county basis
  • Skepticism among payors that they can effectively identify SDoH benefits that will deliver positive outcomes to large sections of their populations

All three challenges suggest that strategic partnerships will be critical to addressing SDoH at scale and integrating SDoH into the clinical ecosystem. 

As we have seen, there are a variety of healthcare trends that are expected to impact the way healthcare organizations address SDoH this year. These factors, together with the evolving COVID-19 pandemic, suggest we're in for a tumultuous year ahead. In the meantime, healthcare organizations can proactively work to understand and resolve obstacles on the path to whole-person care.

Topics: social determinants of health Medicaid public health Medicare