Appealing to Self-Interest to Stimulate Investments in Social Determinants Interventions

While more healthcare organizations are understanding the benefit of upstream interventions, sustainable financing is still lacking.

Focus on reducing readmissions through the Affordable Care Act’s penalties are forcing healthcare organizations to consider the benefit to them of addressing the deficits in social determinants of health, according to a new paper in Health Affairs.

“There is growing awareness that funding for interventions related to social determinants of health has long been inadequate, leaving health systems to treat the survivors of a frayed social safety net,” wrote authors Len M. Nichols, PhD, the director of the Center for Health Policy Research and Ethics and professor of health policy at George Mason University, and Lauren A. Taylor, a doctoral candidate in health management at Harvard Business School.

Read more about the return on investment of addressing social determinants.

Nichols and Taylor argued that underinvestment in social determinants of health can be addressed through a community financing mechanism and they illustrated how investments in social determinants can yield benefits. In addition, they noted that interventions on social determinants of health are ones that healthcare delivery and payer entities have a common interest in financing.

The authors identified 3 main reasons why there is an underinvestment in social determinants interventions:

1. Organizations may find it difficult to credibly estimate the full benefit of investments
2. Organizations may not be sure they can efficiently delivery social services to the target group
3. Organizations worry they could lose the benefit of the investment if the patient switches insurance plans or providers

The authors argue that social determinants investments are public goods, and, therefore, communities will want to invest out of self-interest. Nichols and Taylor identify a 12-step process for communities that want to pursue a financing model, which includes assessing the current healthcare landscape and social determinants deficit, projecting the return on investment, selecting an intervention, and providing oversight and quality assurance.

While the financial model would improve the current situation, the authors did identify 3 challenges:

1. Choosing the right geographic scale
2. Patience from investors as it takes time before returns are realized
3. Statutory changes to the scope of services that programs like Medicare and Medicaid can pay for

“Enlightened self-interest might not get us to the Promised Land, but if properly channeled, it could make local health systems considerably more efficient and humane than they are today,” Nichols and Taylor concluded.

Reference

Nichols LM and Taylor LA. Social determinants as public goods: a new approach to financing key investments in healthy communities. Health Aff (Millwood). 2018;37(8):1223-1230.