Health organizations are zeroing in on Social Determinants of Health, removing socioeconomic barriers to healthcare and social services in order to improve patient outcomes. In the process, they’re also improving the financial health of the entire organization.
“60% to 80% of what we spend on healthcare in this country is attributable to poverty,” says John Gorman, government health programs expert and SDOH investor. “If we can find a way to sustainably finance interventions to alleviate poverty, we will get outsize returns in terms of saving down the road.”
In other words, SDOH initiatives aren’t simply philanthropic efforts. As a guest on the Healthcare Rethink Podcast, Gorman explained how healthcare organizations can see significant ROI from SDOH investments. His advice? Start here:
1. Make a significant investment.
A $2.5 million one-time donation to a food bank is a PR stunt. A $25 million ongoing commitment to addressing food insecurity will radically change outcomes and lower costs.
Geisinger, for example, realized they were spending almost $250,000 per patient, per year, on elderly members with uncontrolled diabetes. Working with Gorman, they initiated a pilot program delivering medically appropriate meals to 1,000 members in central Pennsylvania. Fourteen months later, the average annual per-patient cost for those members was down to $48,000—a 35x return on their investment.
“You will not see a margin like that anywhere else than in dealing with poverty in healthcare,” Gorman says. Geisinger’s 35x margin was extreme, but Gorman says health systems and payers can count on a typical ROI of 3x to 8x for a food benefit intervention.
“Ongoing commitment” is the operative phrase, however.
“The last thing you want to do is offer a life-saving benefit like food security and then not offer it next year,” Gorman says.
Plan for a sustainable, recurring business model that may include nurturing community-based organizations to help them scale up to serve more people.
2. Follow the data.
Payers and providers need analytics on the front end to identify who needs help and to understand where they are. Then, armed with data, they can develop SDOH programs that direct resources to the people who actually need them.
“You can’t design [programs] and intervene in a culturally competent way unless you intimately know the patient population you’re trying to address,” Gorman says. “If you take a carpet-bombing approach and just make [a benefit] available to everybody, you’ll waste an inordinate amount of money.”
Here’s a good example of a targeted investment: In one of Gorman’s recent projects, data showed that more than 50% of the people they were trying to engage with lacked regular internet access.
“Any hope of care management for someone who’s chronically ill or has multiple comorbidities goes out the window if they’re not connected to the internet,” Gorman says. “We knew that broadband internet access was the new Super Social Determinant of Health.”
A $500,000 investment in internet access for a couple of big public housing units yielded $6 million in savings after the first year as a result of better member engagement.
“You’ve got to have an absolute command of the needs of your service area and your enrolled population, and you want to have the ability to target these types of benefits and services to the folks who need it most,” Gorman says. “That’s where you’re going to get the best return on investment.”
3. Don’t block preventative care.
Eliminate co-pays and deductibles for critically important medications and services—like insulin and annual physicals.
“We should be offering a coupon for these folks to go see their primary care physicians, right?” Gorman says.
Our current system is counterintuitive, putting economic barriers in front of services and medications that payers and providers need their members to be engaging in regularly.
The entire healthcare ecosystem saves money and runs more efficiently when preventative care services are universally available.
4. Deploy community health workers.
Community health workers (CHWs) engage one-on-one with neglected patients, guiding them through the health system and ensuring they receive all the care services available to them.
Gorman says having a friendly advocate help patients navigate the complex healthcare system the system can yield savings of $3,000 per member, per year. A recent study, for example, showed that every dollar invested in a CHW intervention returned $2.47 to an average Medicaid payer within the fiscal year.
Because of the critical role CHWs fill, Gorman expects them to represent significant head counts at many health plans and health systems by the end of the decade. As an added benefit, CHW programs spur economic development by training and employing people from within the neglected communities to assist their neighbors.
“It’s immensely powerful and extremely effective,” Gorman says.
For more insights from John Gorman, watch the full podcast below.