Solving SDOH by Building a Path to Payment

The COVID-19 pandemic exposed many health equity gaps that have long existed. The long-term impact of the pandemic on low-income communities has yet to be fully realized. As a result, the demand for social services will continue to rise.

Currently, federal and state government, payers, and providers are responsible for funding

Manik Bhat

the community organizations that deal with the critical, nonclinical drivers of health that impact up to 60% of a person's overall health and wellbeing. These drivers are the social determinants of health (SDOH), and they include healthy food for the food insecure, stable housing for those who are housing insecure, and utility assistance for families who are at financial risk.

While the American Rescue Plan has brought money into communities across the country to combat economic hardships by supporting small businesses, public transportation systems, healthcare providers, and social services, these funds will eventually run out.

What will happen to the community organizations that are underfunded, understaffed, and overutilized, especially in the hard-hit, low-income, and rural communities where needs are most acute?

The path to recovery will be long and the only way to ensure sustainability is to develop long-term interventions and work directly with the community-based organizations that are leading these efforts. In order to help them expand their capacity and meet demands on an ongoing basis, we must allow them to participate fully and equitably in the healthcare ecosystem. Developing a path to payment will make that possible.

We know collaborative relationships between government entities, payers, providers, and community organizations are beneficial for reducing costs and achieving improved health outcomes, as this case study reveals, but solidifying these cross-sector partnerships requires strategic participation on all sides of the equation.

Many community organizations are overcapacity and running on limited resources and staff, making it increasingly difficult to meet the growing demand for services. To effectively address SDOH, we need to provide these organizations with reimbursement opportunities and recognize them as valued members of the health equation.

Deconstructing the barriers that separate government entities, health care, and social services is no easy feat, of course. But recent policy recommendations from America's Health Insurance Plans (AHIP) offer promising changes that could remove the barriers that currently prevent Medicaid and Medicare health plans from paying for these services.

Joint waivers, more flexible “in lieu of services,” pooled funding arrangements, and reimbursement for SDoH interventions are just some of the policies that will make it possible to build a more integrated system in which social drivers of health are prioritized and paid for.

That path to payment should require community organizations to share in the high-level responsibilities and decision-making processes. When local partners are given a voice, they don’t just become valued members of the system. They offer insider knowledge into a community that exists outside of the healthcare system. This is the information that can be used by payers to inform financial decisions around SDOH and other health-related costs.

The value of community organizations and other social service providers is known, but the path to shared remuneration is going to require policy change, acceptance, and deliberate action on the part of all of the players in the healthcare ecosystem.

Manik Bhat is co-founder and CEO of Healthify, a New York City company that works with health plans, providers and community partners to build the infrastructure necessary to support social determinants of health (SDOH) initiatives at scale.