The Role of Social and Personal Determinants of Health on Price Control

The 3rd Party Payers and Cost Control

This article was originally published by Illumination-Curated on Medium

Healthcare costs, patient premiums, and physician reimbursement for the sick’s medical care is a complicated task. Although it does not have to be that way, it is the reality. Until not long ago, companies based their costs of care and reimbursement on a fee for service scheme. However, with the advancement of the International Code of disease, I.e., ICD-10, and the introduction of a merit-based reimbursement system, the way the cost of care is estimated is even more sophisticated.

With the advent of the value-based payment system, raises the question- How do 3rd party payers determine the cost of the medical care by the physician for the patient?

The involved was almost everyone who has been in one way or another with today’s healthcare system understands that physicians and patients are not in control of costs, and the concept of supply and demand is alien to the modern healthcare system. Furthermore, patients and physicians have little or no influence on what defines the quality of medical care.

The alienation of the patients and physicians who are meant to be the essence of the medical care realm has crushed control of the healthcare system and placed it in the hands of bureaucrats, and corporate tyrants.

The 3rd party payers and their administrative partners in the governments and various health organizations have always tried to create chaos, as I Call it “Murky waters” so they can fish or profit to the maximum. The latest of their scheme is the utility of “social determinants of health and disease.”

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The Concept of Social, Physical and Personal Determinants

The social, economic, and physical environment, as well as the person’s characteristics, and behaviors are three categories of determinants payers use to determine the value of medical care or the quality of service rendered to a patient.

According to the World Health Organization, the social determinants of health are the socio-economic conditions in which people are born, nurture, live, work, and age. These circumstances shaped by the distribution of money, power, and resources at global, national, and local levels. The organization believes the social determinants of health are mostly accountable for health inequities like the petty and preventable differences in health standing seen within and between countries. Some examples of social determinants of health are the Convenience of resources to meet daily wants, such as educational and job openings, living wages, or healthy foods, etc.

Physical determinants include- Natural environments, such as plants, weather, or climate change. It also pertains to the built environments, such as buildings or transportation; Worksites, schools, and recreational settings; Aesthetic elements, such as proper lighting, trees, or benches.

Individual behaviors such as diet, alcohol, tobacco, physical activity, and other drug use also play a role in health outcomes.

Although physical and personal determinants of health are of significant importance in addressing a patient’s problem while establishing real value for the care rendered, nonetheless social determinants have played a crucial role in the recent past to secure the 3rd party payer’s interest.

Let us be clear- the social determinants are essential.; however, only in conjunction with personal factors.

Payers can’t Control Costs short of Social Determinants of Health Model

As value-based payment models are emerging, hospitals and clinics are absorbing more financial burden for a particular group of patients determined based on social factors. And are penalized at the same time by the Center of Medicare and Medicaid (CMS) for high readmission or visit rates.

Health insurance companies are influencing the payment because they want to make the most financial security. They have the tools to drive patients to specific services and dictate physicians how to practice based on social determinants of health.

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Not surprising enough, insurance companies are interested in participating in social determinants and using that for their benefit because social determinants are broad and provide payers plenty of space to navigate the domain of “Price fixing.” For instance, in a society that is said to be impoverished, it also lives those who may or may not be adversely affected. Hence it is only a matter of setting limits on what defines a community as wealthy or poor. The latter serves as the murky water or the grey zone where the insurance business can thrive. Personal determinants will not provide such flexibility; for example, a poor person can be a homeless individual in a wealthy neighborhood or be considered rich in a weak or impoverished community.

Other than the insurance industry, many organizations have yet to blend social determinants into their value-based agreements and population health strategies instead of approaching patients’ social needs through community benefit operations.

A 2017 review of health plan executives showed that 80% are facilitating value-based care through a focus on social necessities, according to analytics company Change Healthcare.

A few organizations are studying with ways to capitalize on social determinants in a manner that is mountable and sustainable in the long term. That’s somewhat the Blue Cross and Blue Shield Association is engaging on- through an organization launched earlier this year.

The first step is contracting with ride-sharing services like Lyft and Uber to give patients rides to the primary-care doctor’s office in hopes of reducing trips to the emergency room, The Latter paid by local member plans.

How States Incorporate Social Determinants into Medicaid and Accountable Care Contract Requirements

The whole concept of incorporating social determinants in the valuation process in the merit-based system is to take the price itself out if the bidding practice. That means officials are finding a way to distinguish and set aside those who are innovative and can deliver quality programs. Although it may sound a perfect solution for cost control while maintaining the quality of care, what is hidden from the picture, is that social factors poorly define the better quality and value of medical service, particularly when patients and physicians have almost no control over their decision-making process and what defines the quality and value.

While it’s typically speculated that the social and environmental context of a person’s life affects how healthy they are; however, there’s proof of how the healthcare system can address those factors without the influence of one-size-fits-all administrative bureaucracy. For instance, how providing a free ride to or from the clinic will keep patients out of emergency rooms or offer clean water to indigenous people to determine how much a physician should be reimbursed.

Using Social Determinants Payers, and Managed Care Systems in Particular gain Flexibility to Increase Revenue

That extra flexibility comes to 3rd-party layers as the CMS boosts what it pays Medicare Advantage plans. Plans obtained a 3.4% rate increase for 2019, giving them even more incentive to enhance their benefits packages.

Today amid the value-based reimbursement scheme, Health insurers are prepared to take advantage of the additional freedom. Affordable care act (ACA) was designed to solidify the latter flexibility through individual mandate provision by further bureaucratizing the reimbursement system and the determination of quality and value.

Value-Based Reimbursement and Social Determinants

In a fee-for-service compensation criterion, physicians receive payments for each office visit or service they deliver. Since Doctors are awarded based on the volume of people they see, they are incented to keep their schedules ample. Essentially, payment is reliant on the quantity of care instead of quality. The latter is only valid with regards to the managed care system and not binding for scenarios where patients and physicians are the sole agents of quality of service or care.

Today, healthcare is hastily changing course to value-based care (VBC) reimbursement model, which realigns medical care to concentrate supposedly on quality rather than quantity.

It is imperative to define what exactly quality of care stands for amidst doctor-patient relationships before we can even consider value-based compensation. Because misconception of quality and controversies around it is what gives the health insurance industry the benefit of flexibility.

Suppose we emphasize more on personal determinants of health. In that case, we may not have to face imaginary definitions of quality and value. Unfortunately, social factors and widespread vagueness around it is the selected strategy, thus the best option for the corporate system.

Delivering quality care at optimal costs under the terms of insurance companies is key to the contemporary VBC reimbursement model. Ironically, if physicians meet the clinical and financial success that payers expect, then bureaucrats will reward them.

The insurance industry aligns with their government allies have created a wide range of hidden analytics necessary to gauge and report a provider’s overall performance. To position their organization to thrive amid the novel merit-based payment model, payers have forced physicians to reevaluate their care management and delivery based on performance data managed by the same payers.

Health organizations study behavioral, social, and environmental factors that impact the population as a whole. That is achieved by accessing a population’s social determinants of health data in conjunction with physical and mental health.

Physicians Burnout and Value-Based Reimbursement

Value-based reimbursement by itself is not necessarily a flawed concept, given the intention to improve quality and patient health outcomes. Nonetheless, for the time being, based on what mentioned above, is rhetorically driven and financially motivated. And for the reasons that physicians and patients have no say in the quality of care makes it even more burdensome for the medical community.

After implementing value-based reimbursement, burnout rates have risen significantly to almost 60 percent in some specialties. The Agency for Healthcare Research and Quality (AHRQ) studies the five causes of clinician burnout: family responsibilities, time pressure, Electronic Health Records (EHRs), the low pace of control, and chaotic environments. Amid the new payment system, Clinicians are being asked to do more than direct care delivery.

To date, the consequence of clinician burnout hasn’t been a reduction in care quality but has caused some to leave the field, and it is spontaneous that the tension will impact care delivery at some point. The paradoxical effect of the value-based scheme is a clear reflection of how dissociated is the current healthcare system from its core constituents, i.e., patient and physician. The reform of the payment system has become flexible for insurance companies, yet places the entire burden on physicians. That means for doctors to meet the same revenue have to work harder to meet the demands of their masters at the insurance companies, or they will be subject to penalty.

Social Determinants Affect Insurance Premiums

Insurance companies utilize all the social and personal factors in assessing premiums to patients with one exception- Gender. The following reason is purely a political one enforced by the administration with the effort for gender equality, despite knowing that some diseases are gender-selective. As described before, the way payers incorporate social determinants of health in predicting the value of rendered medical care is merely within the scope of the population health model; hence it is vague. Raising the premium for a person to be a proven smoker is one thing, yet considering the lean and healthy person of high risk, merely living in a state with a higher obesity rate is another. Under a personal healthcare scheme, one can differentiate the high risk purely on the individual- or personal determinants of health.

With the advancement of the big data mining industry, data analytics, surveillance, and Artificial Intelligence (AI) technologies, insurance companies today are easily able to collect social determinants (and personal Determinants) of health with little difficulty and match it with individual’s personal information. This data is used and processed over anonymous algorithms to determine what a premium should be for a person in a given community. For example; If someone living in the state of Iowa sitting in his living room with Amazon Alexa turned on-mentions that he smokes a cigar a day, the Amazon would register that conversation. Once registered, processed, and combined with the user’s demographic information, the company will sell it to United Health or other insurance company. That will potentially raise the premium for the user. Such a process for a different patient with similar social and personal determinants will yield a separate dividend.

Information Privacy, Piracy, and Social Determinants

Health information is valuable, not only for what it is worth but also it exposes the most private aspects of a person’s life. Today, the insurance industry does not rely on personal disclosure of health risks or goes under the physical exam to determine the premium’s fair cost. Companies access all they need without even breaking any law. The latter is because the rules around modern data piracy are still premature. Technologies such as Alexa, Google, and Siri are designed to gather social and personal determinants of health without the need for consent or legal implications. Similarly, Corporations utilize Artificial Intelligence algorithms to collect and trade social determinants.

Internet of things and the Internet of Bodies is another tool with potential utility in collecting data and influencing patient health insurance premiums.

Big data, including analytics, is a robust tool. They will be amongst those that deliver the highest value for healthcare organizations, but it will not be without flaws. It will be an instrument of abuse and evasion of personal liberty.

Social Determinants of Health and the Medical Practice

The current scheme of physician reimbursement is the epitome of modern-day slavery. How the medical practices are reimbursed today is at the mercy of the insurance industry. For decades the 3rd party payers have decided how much to pay for what type of medical care. With the incorporation of value-based reimbursement, the insurance company has taken their profit margin to the next level. They have been able to rise with a scheme that forces physicians to work harder and penalizes them if they fail to meet the insurance industry’s protocol. Social determinants of health under the population health umbrella is broad and flexible for manipulation by the insurance industry.

The Personal Determinant is the Real Driver of Healthcare Quality

Healthcare is personal, as it can never be without the direct participation of physicians and patients. Therefore, the quality of care reflects the subjective perception of a rendered medical service by the patient; and the objective finding of the treating physician at a given point of time and place. To the same measure, the value of medical care is the reflection of worthiness based on the particular quality. Henceforth, the real value can be determined solely based on personal determinants of health. Furthermore, if evaluated within the doctor-patient visit context, it will exclude 3rd party payer influence from the equation of medical costs, something the Insurance industry will fight to the end not to give away.