Payer Philanthropy Won’t Improve Social Determinants of Health

November 19, 2019 - The concept of payer philanthropy has been getting more attention lately as a novel means of solving social determinants of health (SDoH) issues, but it’s an approach that may not be the right one when it comes to improving the health of communities.*

Editor's note: The viewpoints expressed by the author do not necessarily reflect the opinions, viewpoints, and official policies of Xtelligent Health Media.

The problem with payer philanthropy, as currently practiced, is that it often lacks accountability and fails to produce alignment between payers’ business interests and tangible outcomes associated with those interests.

Due to a lack of skin in the game, it’s too easy for payers to invest philanthropic funds at a problem, persisting a “grants mindset” in community-based organizations (CBOs) without closely tracking the activities and associated outcomes produced by the funding.

Right problems, wrong solutions

As healthcare costs in the United States continue to soar while SDoH issues — such as food insecurity, housing instability, utility needs, transportation needs, and interpersonal violence — draw more attention for their negative effects on health, payer philanthropy may seem like a concept whose time has come. By offering grants and donations to CBOs dedicated to addressing SDoH, payers can help mitigate some of the community’s most serious health concerns, the thinking goes.

READ MORE: Employing Social Workers to Address Social Determinants of Health

While it’s likely that payer philanthropy does have some positive effects, it’s fair to question how realistic or scalable this is.

Consider the city bike-share programs that have popped up across America’s urban landscape in recent years that are often sponsored by local health care organizations. While funding the availability of brightly-colored bicycles may qualify as philanthropy, it’s questionable how well this approach aligns with the community’s specific needs for population health improvement — and whether the philanthropic effort aligns with the sponsoring organization’s business needs. Speaking frankly, sometimes these initiatives are more about marketing and branding than improving health.

Certainly, these programs can contribute to SDoH improvements for certain individuals, but they hardly represent a holistic, comprehensive solution that is sustainable and replicable across entire communities. More often, philanthropic programs are designed to support the activities that are the most high-profile, not necessarily those that improve health.

Inspiration from New York’s Medicaid program

For a more effective and measurable alternative to payer philanthropy, one can look to New York’s Delivery System Reform Incentive Payment (DSRIP) program operated by the Medicaid Redesign Team at New York’s Department of Health. DSRIP promotes community-level collaborations and focuses on system reform, with the primary goal of reducing avoidable hospital use by 25 percent over five years.

New York recently published a new proposal for an extension of the DSRIP program which would extend the program through 2024, if approved by CMS. The proposal calls for $1.4 billion dedicated to creating networks that would manage SDoH in high-cost, high-needs populations.

READ MORE: Challenges of Investing in Social Determinants of Health

Under the proposal, all the MCOs that work with Medicaid patients would dedicate a certain percentage of Medicaid premium dollars to support the networks that are addressing communities’ social needs. As a result, these networks consisting of providers, CBOs, and MCOs — as opposed to the insurer alone in a payer philanthropy model — would be responsible for making decisions about how to allocate funding to address SDoH in their communities and more importantly, how to define and measure success.

Networks would make data-driven decisions powered by technology systems that aggregate vast amounts of patient data from electronic health records, claims, health information exchanges, and more.

Collaborative networks, not philanthropy

What’s the goal of all of this? Improving population health and therefore reducing total cost of care. If we can address SDoH such as housing instability and food needs, local populations will become healthier, enabling community members to reduce the use of costly medical services and better manage chronic diseases.

Unlike payer philanthropy, this collaborative network of providers, CBOs, and MCOs is not making decisions simply because they are “the right thing to do.” If there is no margin, there is no mission- and it is simply unfair to expect executives to pursue initiatives for which there is no business case. Of course, there are instances in which alignment might exist between “the right thing” and a wise business investment.

In any case, payer philanthropy — though well-intentioned — is the wrong approach to solving SDoH needs in American communities. In contrast, on-the-ground, collaborative, accountable networks of medical providers, CBOs, and MCOs hold the greatest potential to deliver the SDoH improvements that make a difference in community members’ lives — regardless of what generates the best headlines.

Jacob Reider, MD, served as Deputy Director of the Office of the National Coordinator for Health Information Technology (ONC) during the Obama Administration. He is currently CEO of Alliance for Better Health, a company focused on helping Medicaid members and the uninsured achieve optimal health and health care.