Should Social Determinants Come From Payers and Providers?

I think healthcare giants (specifically insurers and providers) trying to operate programs dedicated to tackling “social determinants of health” is something we should be more intensely questioning instead of unabashedly supporting.

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Social Determinants

For the uninitiated, “social determinants of health” encompass a lot of the environmental factors that contribute to poor health outcomes. A non-exhaustive list includes things like:

• Transportation to and from visits
• Access to fresh food and produce
• Housing insecurity
• Neighborhood safety
• Community support systems
• Job security

I’m not going to argue that these don’t have major impacts on people’s health. They obviously do and there’s a billion studies at this point to suggest that they do, especially in areas like chronic disease where disease development and management happens outside of the hospital.

We’re all on the same page that addressing these issues is important, and now insurers and providers have started programs to address these issues.

UnitedHealthcare, Blue Cross, and Anthem are building housing for high spending homeless Medicaid patients. Geisinger has launched a Fresh Food Farmacy to connect food insecure diabetics to fresh produce. Humana is doing a bunch around loneliness, food insecurity, and transportation.

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Almost every piece I’ve seen written about social determinants has been in support of these healthcare institutions moving further upstream in the healthcare journey and tackling more of root causes of healthcare issues.

I definitely think we should be addressing the root causes, but here are some questions I think we should be scrutinizing as providers and insurers get more involved.

Will this increase prices?

When companies start targeting payers and providers as their target business model, the price tends to go up. The rationale is that these companies end up spending so much on health issues down the road that providing them with solutions to social determinant issues will actually save them money. It’s a win for everyone.

But what happens when a service is priced one way in a non-healthcare setting, and that exact same service gets priced 3-5x higher just because it’s selling to the healthcare industry? Were costs actually reduced then?

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“Medicalization” is when something that was previously not explicitly considered a healthcare issue is now deemed one. This leads to a lot more research studying the effects on healthcare as well as finding better diagnostics and treatments to address it. It also means a lot of people trying to figure out how to get paid from it.

This is usually talked about in a pharmaceutical lens. There’s lots of commentary around the idea that pharma will take issues that are largely manageable and portray them as more severe medical issues that require a cure. A common example is the use of propecia and balding. More recently, there’s been conversation about recreational drugs being turned into pharmaceutical products at many multiples of the cost (see ketamine vs. esketamine).

Another example of medicalization would be obesity (which the AMA recognized as a disease in 2013) and “prediabetes”. Prediabetes in particular has set off quite a bit of discussion on whether our creation of diseases is simply meant to increase patient demand for services and prescriptions that are unnecessary (there are 1000+ clinicaltrials.gov entries targeting prediabetes).

Part of me wonders if digital health companies targeting diabetes management are truly differentiated enough to justify the multiples of the cost vs. traditional weight management programs like Weight Watchers. Honestly they definitely could be, but worth the discussion.

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My worry is that if we “medicalize” social determinants of health, the price of services targeting them will artificially increase simply because they’re now healthcare issues. In its worst form, companies that target these issues will predominantly have business models relying on selling to the industrial medical complex - pushing out potentially lower priced competitors and more deeply pushing people into entrenchment for health coverage to be able to pay for access to these services.

The pushback I’ve gotten from friends smarter than me is that individuals ascribe a different value to these benefits vs. healthcare companies. What I think weight loss is worth to me personally is extremely different from what my health insurer values weight loss for me. I buy that, but also think we need to make sure there are ways for healthcare companies addressing social determinants to compete on cost-effectiveness. Otherwise these costs are going to be baked into our premiums or come from our tax dollars.

Are we just adding middlemen?

Health insurers and providers are not exactly known for their operational prowess. I’ve seen insurers operating their mail-order pharmacies, I think it’s fair to be skeptical that they can operate meal kit services. In all likelihood they’ll partner out to companies that specialized in the social determinant problem they want to tackle (Uber/Lyft for ridesharing companies, Blue Apron for meal kits, etc.)

However, it begs the question of whether this is just another inefficient administrative layer we’re adding between the patient and services they need. Are we going to end up adding admin layers to prevent fraud, manage payments, etc.? What % of premium dollars are going to be captured by insurers for these programs, and what are we getting from that? Would it be cheaper just to pay these social determinants companies directly via government programs or maybe some sort of HSA? Will I need a prior auth to buy one of those Hershey’s cookies & cream bars?

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This is probably a wider question of the role we expect health insurers and providers to play in healthcare. Do we want them to be coordinators when we need something? Proactively reach out to us and involved in our everyday decision making (since most decisions could relate to healthcare)? Do we want our ability to access certain services be dependent on the healthcare bundle we opt into?

Who decides eligibility?

One of the things that stands out to me whenever I read these articles about social determinant projects is the focus on high spenders. Like this article about UnitedHealth’s MyConnections housing project.

[UnitedHealth] spends from $1,200 to $1,800 a month to house and support each member, so it must save at least that much to break even on Brenner’s program.

On average about 60 members are enrolled in the Phoenix sites at any given time. Once a week, Brenner and his team get on the phone to evaluate potential candidates—anywhere from 2 to 14 people whose names have surfaced in UnitedHealth’s data. They want patients who are homeless and whose medical spending exceeds $50,000 annually, with most of that coming from ER visits and inpatient stays. People living on the streets with less extreme medical costs may need a home just as much, but it doesn’t pay for UnitedHealth to give them one.

For patients above the $50,000 threshold, the reductions in medical costs should let the company at least break even on its investment in housing and services. But it’s not as simple as running the numbers. Brenner is looking for people who not only need help but are ready to accept it. “We want a storyline around, Why is the housing going to make a difference? What’s going on in there? And then what’s the exit strategy?”

Two things immediately stand out.

First, medical spending is the metric used to determine eligibility. If that’s the requirement it incentivizes patients to show up to the ER more, or on the flip side punishes people that avoid the healthcare system (which we’ve seen is problematic along racial lines).

I also think using cost as a proxy is weird because all of the prices in healthcare are super inflated. IMO if we were thinking about if this was societally beneficial we’d compare the cost of delivering a social determinant solution vs. the cost of delivering and intervention in a hospital (instead of the price regularly charged). It would definitely still be cheaper to address the social determinant, but it might be a closer disparity (which would affect point #1, pricing).

Second, it seems like you have to justify the narrative around why you deserve your spot to some committee. This feels very black box and different from insurer to insurer. What does the process look like? Who do they consider “deserving”? Who’s making those decisions?

The reason this is difficult is because these aren’t any run of the mill services, they’re social safety net services that people need to live (food, housing, etc.). What happens if someone becomes a less expensive spender? Or switches insurers? Are they forced out of their housing? Does this create a “cliff” scenario where now it’s actually cheaper for someone to be an “expensive” healthcare spender than have to pay for housing?

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Look these aren’t easy questions - and I sympathize with the people involved because it comes off as a “damned if you do, damned if you don’t” initiative. But I think we should rightfully expect accountability and transparency in how these decisions are made.

It also really does force us to ask ourselves what should be social safety nets the government provides for its citizens vs. what should be considered medical benefits that are covered?

Conclusion and Parting Thoughts

I think I should make it clear one more time - I’m a fan of the investment that’s happening in the social determinants of health space. I think we need MORE investment here, and I think the projects that are happening are great because at the very least they’ll provide us even more data/research on where we should be doubling down as a society. In fact I think this is the perfect time to invest more in social determinants now that everyone is staying at-home and environmental stressors are becoming bigger issues.

But should we assume that the current payer and providers that service healthcare today are the best ones to deliver social services in the long run? Isn’t there a smidge of irony considering more than half of people attribute personal bankruptcies to medical bills and that bankruptcies tend to increase after hospitalizations? You can poke holes in the methodology in lots of these studies, but it’s hard to deny that the current healthcare system has driven many people to make drastic cuts to pay their medical bills and yet now we expect that same system to provide life essentials.

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With the healthcare system this consolidated and with no semblance of competition, I’d worry that deeper entrenchment would give companies even more leverage to raise prices for the rest of patients.

So all in all, if these efforts bring more attention to the importance of social determinants that’s great. The more experimentation and data to support this the better. I’m excited that states are using their Medicaid 1115 waivers to fund experimental programs to address these root issues, and I also think we’ll see a lot more experimentation from Medicare Advantage plans as they get more flexibility to provide supplemental benefits to their members. I think we’ll learn a lot about improvement in health outcomes from these programs.

But not everything about this is rosy and we should continuously be asking these questions, especially as we consider what the role of the health system should be going forward.

Thinkboi out,

Nikhil

Twitter: @nikillinit

IG: @outofpockethealth

Thanks to Malay Gandhi, Eric Guroff, and Sandy Varatharajah for shaping my thinking here and give helpful pushback and feedback