Social determinants of health (SDoH) are defined by the World Health Organization (WHO) as “the conditions in which people are born, grow, live, work and age.” These non-biologic factors are driven by uneven distribution of money, power and resources. Social determinants contribute to health inequities – or avoidable disparities in health behaviors and health outcomes in certain populations. Addressing SDoH that lead to adverse health and health outcomes is best done at the policy or system level to complement other behavior change initiatives.

It’s estimated that medical care is responsible for only 20% of health outcomes, leaving the remaining 80% to SDoH and health behaviors, such as smoking and obesity. As value-based reimbursement (VBR) models, like accountable care organizations and Medicare Shared Savings, are increasingly implemented, the emphasis on reimbursement based on health outcomes will grow. Most performance measures in place today include risk adjustment for certain factors, but do not account for SDoH. For example, the Centers for Medicare and Medicaid Services (CMS) Hospital Readmission Reduction Program (HRRP) aims to lower 30-day readmissions and is risk-adjusted for severity of illness and demographics, but not SDoH.

The lack of adjustment for SDoH can put hospitals on uneven ground when it comes to being reimbursed for health outcomes, particularly safety-net hospitals (SNH) that care primarily for vulnerable populations. A 2014 study found that patients living in neighborhood with high rates of poverty are 24% more likely to be readmitted. Additionally, a recent study found that differences in readmissions between SNH and non-SNH following a surgical procedure were due to socioeconomic status, rather than quality of care. On the flip side, some researchers are concerned that adjusting for SDoH in VBR may reduce the incentive for providers and health systems to address SDoH in the communities they serve.

Researchers from Harvard Public Health (HPH) recognize that “not everything that matters can be measured,” and operationalizing the complex web of interconnected social and economic factors that make up SDoH might prove impossible to do in a meaningful way. Additionally, even if full adjustment alleviates unfair reimbursement penalties faced by hospitals that serve vulnerable patients, the underlying issues still remain and may even be exacerbated as the financial incentive for the health system to address them diminishes. 

Instead, HPH suggests hospitals should aim to disrupt this status quo rather than dodging penalties with statistical wizardry. In addition to promoting telemedicine, care coordination, patient navigation, and hospital-at-home models, health systems should expand beyond their walls to partner with community or government organizations to address SDoH issues such as food security and housing. Not only could this strategy improve underlying issues, it would also create shared responsibility across the entire community for improving health outcomes.

Why This Matters 

Ultimately, addressing SDoH is paramount when it comes to improving health outcomes and reducing unnecessary disparities. Simply adjusting away the impact of SDoH on health outcomes to save hospitals from reimbursement penalties will not solve the underlying issue. As marketing in the pharmaceutical industry focuses more on the customer experience and leveraging principles of behavioral science to affect behavior change, SDoH should be strongly considered as friction pointson the customer journey that must be minimized. Adoption of public health-minded strategies and partnerships between hospitals, payers, government and private industry are necessary to create real, sustained improvement in health inequities.

About the Author:

Erica is Director of Insights in Columbus, OH. She has profound interest in generating data-driven insights to improve health and business outcomes. With a PhD in epidemiology and 10 years’ experience in research, analytics, and product development, Erica loves to connect the dots to describe and predict trends in patient health and consumer behavior and elevate product positioning.