How identifying and addressing the social determinants of health can reduce rising healthcare expenditures and improve quality of care for at-risk populations
Over the last 50 years, health expenditure growth has more than doubled and continues to rise rapidly, while rates of chronic diseases continue to increase. According to the U.S. Centers for Medicare and Medicaid Services, health spending is projected to rise by 5.5% this year and will continue to rise over the next decade. The rise marks a sharp increase from last year’s spending, which is estimated to have been around 4.6%, almost $3.5 trillion. The increase in healthcare expenditures can be attributed to several factors including rising costs associated with medical goods and services, shifts in income growth, Medicaid and Medicare.
Healthcare Expenditures For At-Risk Populations in the United States
Yearly costs associated with Medicare (7.4%) and Medicaid (5.8%) account for a substantial part of the increased rate of national health expenditure growth. Although these trends both show the impact of at-risk populations, they affect the overall national health expenditure growth rate in different ways. For Medicare, projected enrollment growth is the primary driver; for Medicaid, it is an increasing projected share of aged and disabled enrollees. By 2026, Medicare growth spending is expected to rise to 7.7%, with increases in enrollment and per enrollee spending being the primary driver for this trend. Medicaid growth spending is also projected to increase to 6.1% with per enrollee spending associated with the growing number of aging and disabled enrollees in the program.
A significant portion of these escalating costs can be attributed to rates of chronic disease. In general, chronic diseases account for the vast majority of health spending in the United States, but the costs associated with chronic diseases for populations enrolled in Medicare are even more significant. In 2016, the cost per Medicare enrollee was estimated to be around $10,986 with a large portion of those costs being related to the treatment of chronic diseases like hypertension, diabetes, etc (Fig. 1). Studies have found that individuals with chronic diseases accounted for approximately 94% of Medicare spending and these numbers continue to increase. In 2015, total per capita spending for chronic conditions in Medicare enrollees averaged around $406,390.
Figure 1 Medicare Spending Per Enrollee from 1991-2014
The costs associated with those who are dually eligible are just as alarming. A study shows that 60% of dually eligible enrollees suffer from multiple chronic conditions. Those who are dually eligible for Medicare and Medicaid only represent 15% of the Medicaid population and 16% of the Medicare population but account for nearly 40% of Medicaid spending and 27% of Medicare spending.
Social Determinants of Health Linked to Chronic Diseases and Increased Costs
Despite the increasing costs associated with the treatment of chronic conditions, enrollees often do not make significant progress with their health conditions. The reason for this can be attributed to differences in populations or social determinants of health. Factors like socioeconomic status, education, physical environment, employment, access to social service, and healthcare can result in higher rates of disease, poor quality of care, and limited access to care. Studies show that social factors account for over a third of total deaths in the United States in a year. It is important to understand the disparities between patient populations to reduce healthcare expenditures and improve healthcare quality.
One of the most common unmet social needs is access to sufficient and quality food. As of 2016, 15.6 million Americans are food insecure. The inability to access nutritious foods is one of the primary causes of chronic diseases. The inability to access healthy foods can lead to poor dietary habits like regularly consuming foods high in fats, sugars and starches. On our search platform, food resources are the most searched for social need. In 2017 alone, searches for food resources accounted for around 25% of total searches on our platform (Fig. 2). Chronic disease prevention and management is difficult for those who are unable to access nutritious, healthy foods and addressing this need is a step forward in reducing rates of chronic diseases and the costs associated with treatment.
Figure 2 Most commonly searched resources on the Healthify Search Platform in 2017
Tools and Strategies to Reduce Costs and Improve Care
To successfully reduce healthcare expenditures, a greater understanding of the differences between patient populations is needed and a holistic approach to healthcare can help fill gaps in clinical care. The first step is screening patients for social needs, which can help identify major causes of poor health outcomes. By identifying these needs early, providers and payers have the opportunity to reduce costs and improve quality of care. While screening for social needs is vital to improving health outcomes and reducing costs, it is only a fraction of the solution. Building a network of community partners and collaborating with them is the key to ensuring these needs continue to be met outside clinical settings. For example, if a patient with type 2 diabetes lists food insecurity as one of their top social needs, referring them to a food pantry may help them access the foods necessary to follow their strict dietary regimen. By connecting the patient to this resource, the patient now has access to nutritious food and is more likely to adhere to their treatment. The patient is also less likely to make avoidable trips to the emergency department for medical emergencies like hyperglycemia or continue to seek care for recurring problems caused by an inability to follow their diet.
As healthcare expenditures continue to rise, payers, providers and community partners must recognize the efficiency associated with understanding the needs of different patient populations and the importance of screening for social needs.
At Healthify we believe that no one’s health should be hindered by their need. We deliver a leading solution that empowers organizations to find community services for their patients, track social needs across their population, and coordinate care with community-based services. As a partner to health plans, social service agencies, and provider networks working with Medicaid and Medicare members, Healthify enables integrated care to fulfill the promise of a value-based healthcare system and healthy communities.
If you’re interested in implementing a tool to screen for social needs or how to connect your patients with social services, we’d love to talk. Connect with us here.