The Social Determinants Of Health: Why Insurers Should Care

By Ryan Bosch

Well before the COVID-19 pandemic caused a major crisis for both the health care and health insurance industries, insurance executives began taking a closer look at the Social Determinants of Health in order to improve the overall health of their members while reducing the cost of care and number of insurance claims paid annually.

According to the World Health Organization, more than 60% of health outcomes are the result of social determinants of health such as economic strain, food insecurity, housing instability, social isolation and poor health literacy. These social risk factors in people’s lives create significant impacts in their health outcomes, utilization patterns and costs. Payers and insurance executives are now analyzing these social risks as they serve more vulnerable populations and communities – especially in the more challenging post-COVID-19 world.

For example, individuals with compromised immune systems – people diagnosed with diabetes, for example – are seven times more likely to die from COVID-19. Yet, 10%-12% of the U.S. population has diabetes and does not even know it. And, more than 34 million Americans suffer from diabetes, making them more vulnerable to the virus and placing greater burdens on the health care system and the insurance industry to provide adequate care and support.

This is a watershed year for payers and the insurance industry to embrace SDOH. The industry already knows how to calculate risk and adjust it in their systems, but to date, they have not factored in the specific social risks that impact the overall wellness of certain populations and communities. In doing so, they can:

Reduce total cost of care and number of claims paid annually.
Improve utilization and utilization acuity.
Improve Quality Measure Attainment.
Provide better clinical care of members.
Offer better holistic care of the whole patient.
Know where to partner in the community for synergy – offering programs funded by multiple like-minded partners to achieve greater success at scale.

These are important and meaningful benefits that not only help their businesses grow but also establish greater goodwill in the communities they serve.

When it comes to embracing SDOH, a good place for payers and the insurance industry to start is by helping improve health literacy among their members and communities. Health literacy is defined as the ability to obtain, read, understand and use health care information in order to make appropriate health decisions and follow instructions for treatment. It involves both the context in which health decisions are made as well as the skills that people bring to making the best decisions for themselves.

Sadly, in the U.S., we are failing at health literacy. A recent study revealed that only 12% of adults are proficient in health literacy. And, a 2003 U.S. Department of Education National Assessment of Adult survey discovered that 36% of the adult U.S. population has “basic” or “below basic” health literacy levels.

Poor health literacy has direct and negative consequences for payers and the insurance industry as it has led to skyrocketing health-care costs which will only become more uncontrollable over time. The savings achieved by improving health literacy – between an estimated $106 billion and $238 billion – translates into enough funds to fully insure 47 million people who lacked coverage in the U.S. It behooves the insurance industry to help improve health literacy. Payers who analyze SDOH in their communities can help offer targeted programs that provide meaningful benefits to the populations they serve.

Still, some insurance leaders may feel reluctant to embrace SDOH right out of the gate as no one wants to be the pioneer or the first to champion a relatively new cause during this critical time. Some may be waiting for SDOH to deliver a more definitive return on investment while others may view it as more of a charity endeavor rather than a mission critical initiative key to their organizations’ future.

The more likely scenario is that insurance executives actually want to embrace SDOH, but they simply aren’t sure where to start. They are wrestling with practical questions and applications such as “who owns this program and why?” and “how does this relate to our financials and support our business model?” Those are tricky questions. However, insurance leaders and payers may find some answers by following these best practices that will help get them started with SDOH.

Seek SDOH information about the member’s total context. Understand the member’s needs from a more holistic perspective. Do they have adequate housing? Are they able to read and comprehend health information? Do they have family or social ties to help them get the care they need?

Know the customer – both patient and group -- to better provide the right coverage. Uncover the SDOH specifics on patients and patient groups and adjust the coverage based on their specific needs

Facilitate and reimburse optimal, effective, nonredundant care in the lowest acuity setting. By making this a priority, payers can provide better care at lower cost.

Support health, not health care. Pay more attention to the members’ overall health as well as offer preventative care. Excellent care is more than just medication and the treatment at hand.

Partner with the community and the providers on data and goals. Find other like-minded partners and embark on SDOH and health literacy initiatives together to make a more meaningful community impact at scale.

Ryan Bosch, MD, is the president of Socially Determined, a health care technology and analytics company focused on measuring the impact of the social determinants of health. Ryan may be contacted at [email protected].