Addressing Social Determinants of Health Boosts Revenue and Saves Money for Health Plans

60% of health outcomes are determined by non-clinical social factors, such as access to finances, food, housing and transportation. The burden of unmet non-clinical needs often falls on clinical care teams and acute facilities, driving unnecessary readmissions and high operational expenses: patients with social risk are 24% more likely to be readmitted, and those living in poverty are almost twice as likely to have made at least one visit to the emergency room in the past year.

Better meeting people’s non-clinical needs -- the ‘social determinants of health’ (SDOH) -- has been proven to significantly reduce unnecessary ED visits and readmissions, and drive enormous medical expense savings. Any given intervention (e.g., clinically tailored food, benefit enrollment, housing), typically drives 15% savings among high cost Medicare Advantage (MA) and Medicaid beneficiaries. We estimate more than $200B in addressable savings across the dual eligible and Medicaid population.

Beyond medical and operating expense reductions, there’s much more value to be tapped into: SDOH interventions are a huge boost to MA plan revenue.

Unlocking $3B+ In Risk Adjustment Revenue

Enrollment in existing safety net benefit programs is typically the first step a case manager takes in meeting someone’s unmet social need. A subset of programs (Medicaid, QMB/SLMB, LIS and select Part D programs) result in an 8-20% increase in Medicare Part C premium via risk adjustment and Part D revenue coverage, which totals ~$8B across the now 22M+ Medicare Advantage population. Given 30-50% of members aren’t enrolled in eligible benefits this likely equates to more than a staggering $3B in risk adjustment revenue left on the table. 

Just by referring their beneficiaries to social services, BlueShield of California was able to shift beneficiaries’ perception of their health plan by 16%.

Moving The Needle On Star Ratings

Knowing the Consumer Assessment of Health Plan Survey (CAHPS) represents 36% of Star Ratings and SDOH interventions can influence 50% of the CAHPS measures, we can assume the ability to move the needle significantly across 18% of Stars measures. As the all-important fourth star rating earns an MA plan a 5% bonus payment, anything that impacts CAHPS contributes in outsize ways to achieving -- or keeping -- that revenue. Interestingly, addressing SDOH and helping members enroll in safety net benefits may be the best defense of a plan's Star Ratings.

Operating Expense Savings

Among high risk patient populations, upwards of 50-100% of case worker time can be consumed with the administrative paperwork of completing benefit applications and making social service referrals. If a case worker manages 50-75 high risk patients, that’s $1.6M in case worker salary across 2000 patients. 

Across all of these revenue levers, we estimate that there’s at least $30M of value returned across 100,000 members just from enrolling people in eligible safety net benefit programs -- let alone a strategic combination of additional services. 

There are few steps health plans can take that yield such significant results in both cost containment and revenue enhancement for their most vulnerable members.