Why Tackling Social Issues Is Important for Health Insurance

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If you’ve paid attention to news about healthcare reform, you may have heard of “bending the cost curve.” The phrase describes the desired outcome of policy and management strategies aimed at reducing the high costs of the United States healthcare system.

These high costs are burdensome to patients, to organizations, and to the country.

What make our healthcare costs even more unnerving are the deficient outcomes we’re seeing as a result. In effect, our return on investment is not what it should be.

Traditionally, our medical system has been primarily focused on what happens inside the walls of a hospital or a doctor’s office. Click To Tweet

One solution to the healthcare cost conundrum is to understand the drivers of not only healthcare spending, but improved health outcomes as well.

Social and environmental factors – such as safe housing, transportation, and food insecurity – play a large role in the extent to which individuals are able to independently care for themselves.

Now, some insurance companies and care delivery providers are addressing patient well-being holistically (as in, focusing on how patients live their whole lives) in hopes that doing so will transform our healthcare system.

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What Are Social Determinants of Health?

Nationwide changes are being inspired by Healthy People 2020, an iterative framework designed by the Department of Health and Human Services, which reflects the input of scientists and medical authorities regarding disease prevention.

Healthy People 2020 defines social determinants of health as “conditions in the environments in which people are born, live, learn, work, play, worship, and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks”. It includes social and physical determinants, such as overall access to resources, housing and community design, the built environment, culture, and even aesthetic elements.

There is a long, yet slow to progress, history of large-scale efforts to link social determinants and health. Medicare and Medicaid, two 1960s-era programs aimed at easing economic barriers to healthcare services, are prime examples.

The more recent Affordable Care Act was meant to reduce the challenges of operating costly healthcare services by increasing insurance coverage.

Health and Human Services updates the Healthy People framework every decade, having previously published editions for 2000 and 2010. Healthy People 2020 increasingly promotes social determinants of health as an important issue.

Health Insurers Have Taken Note: Despite these efforts, creating and protecting expansive government safety net programs that go beyond access to health insurance coverage can be a difficult political pursuit. This is why the trend of insurers and medical providers taking a more active role in improving social determinants of health is so encouraging.

Health Insurance Investments In Social Programs

The main function of an insurance company is to manage risk and cash flow. From that perspective, not only is investing in social determinants of health good for communities, it’s also potentially good for business.

Kaiser Permanente, an integrated delivery system and non-profit health plan, has a long track record of focusing on prevention. Kaiser has made it a priority to expand their healthcare mission into social care. Among other initiatives, it has recently dedicated $200 million to address housing needs in its communities. UnitedHealth Group, a for-profit managed care plan, has also partnered with communities to support housing developments.

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How Social Programs Are Changing Your Medical Care

Medical groups, hospitals, and health systems often provide some level of social resources, either in the form of in-house programs or referrals to outside entities.

However, as the shift from volume-based to value-based payments (i.e., payments received based on positive health outcomes instead of quantity) continues, providers are more likely to begin taking on elements of social care.

For example, Iora Health, a primary care organization, embeds health coaches into its model that help identify what patients need most, even if those needs are beyond a conventional visit with a physician.

Incorporating Social Care Into Healthcare: What’s Next?

As the focus on social determinants grows and as supporting research develops, insurance companies will have greater impetus to address social health factors.

It’s possible that more and more insurance plans will be designed to include services beyond medical treatment, not only a way towards financial sustainability but also to remain competitive.

Additionally, if social care models are proven to be effective and sustainable, they may be used as a springboard for insurers, providers and everyday Americans to impact policy changes and influence investments in social programs.

Has your health insurance tried out social programs to keep costs down? Check out next year’s healthcare costs, or let us know in the comments below.

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Sonia Barkat

About Sonia Barkat

Sonia Barkat is the founder of Umbrella Pact and a contributing consultant to The Impact. She also serves at The George Washington University's Milken School of Public Health as an adjunct professor. Sonia is a regular contributor to HealthCare.com.

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