Providers, payers and other companies are increasingly finding ways to bring down the cost of care by addressing the social determinants of health, particularly for the Medicaid population.
Major players such as Town Hall Ventures, Socially Determined and Amazon’s offer of a Prime discount to Medicaid members, highlight the new investment and focus in a space that has long had the reputation of reimbursing at the lowest rate of any government or commercial payer.
Adding to Medicaid’s drawbacks, Medicaid expansion put into place under the Affordable Care Act is under threat by CMS’s promotion of state waivers mandating work requirements, an effort experts have said is sure to lead to lower enrolled numbers.
But beneficiary care isn’t dependent on federal policy, according to Andy Slavitt, one of the founding partners of Town Hall Ventures and former acting administrator for the Centers for Medicare and Medicaid Services.
Slavitt said he is optimistic about the current work being done at CMS’s Innovation Center to address complex populations. Innovative Medicaid models have dramatically shifted the landscape.
“All the incentives are getting better aligned,” Slavitt said. “I think the space will be strong.”
Seventy-five percent of the Medicaid population is in managed care, in which payment is based on a per member, per month capitated amount in contractual arrangements between states and managed care organizations.
The value-based care arrangements give incentives to lower costs.
“The wrong way to think about healthcare is who pays the bills,” Slavitt said. “One of our great strengths as a country is innovation capacity.”
This spring, Slavitt and partners Trevor Price and David Whelan started the capital venture firm Town Hall Ventures to help healthcare companies care for an underserved population of about 120 million that represents $1.2 trillion in annual healthcare spending.
Town Hall Ventures invests in healthcare technology and service companies to address the social determinants of health.
“This is the largest population in the country,” Slavitt said. “These are people with common medical conditions. We’re delivering sub par health outcomes; we’re doing it at a higher cost. It’s ripe for investment.”
To lower cost, providers know they must address one of its largest contributors, chronic conditions. One of the best ways to bring the chronic condition of diabetes under control is to promote healthier eating, but social determinants such as lack of convenient access to healthy food and transportation can block efforts.
Providers wanting to decrease the cost of chronic care know they need to address social determinants, Slavitt said. And they’re willing to pay large amounts of money to get there.
A company in southern California told him it would pay almost unreasonable amounts of money to get behavioral health and transportation needs to the population, Slavitt said.
The social determinants of health has migrated from altruism to a return on investment to value-based care, said Trenor Williams, MD, who founded Socially Determined more than a year ago and is its CEO.
“If you really want to drive down managed care costs, you have to be in that game,” Williams said.
Williams will speak on the subject at America’s Health Insurance Plans’ Institute and Expo conference this week in San Diego.
Health systems that have saved money by investing in social determinants include Montefiore in New York, that invested in housing for its most vulnerable population, Geisinger, which provides a week’s worth of food and ProMedica Toledo Hospital in Ohio that identified a large food desert in the city and built a grocery store that has relatively low prices.
Another example is the Harvard Pilgrim Health Care Foundation that works with low- and moderate-income families to gain greater access to fresh, affordable food.
The efforts improve long-term clinical outcomes and the progression of diseases such as COPD and diabetes, according to Williams. There is a huge link between food insecurity, heart failure and the cost of caring for these populations.
While the cost of building a grocery store is big, the larger cost is in treating a patient who returns to the emergency room 75 times in a year, he said.
“Think about that and how those costs add up,” Williams said.
“Fourteen months ago, when I started the company, I wasn’t sure what the reception of health systems, insurers and government was going to be,” Williams said. “One hundred percent of the time everybody has said, this is important.”
Hospitals have a lack of certainty over what to do first and where to make those investments, he said.
“Most of the time they’re not sure of the economic value, or it may or may not be aligned with strategic priorities,” Williams said. “That’s the state of the nation around the country.”
Socially Determined fuses clinical and claims data. Using analytics, the company looks to understand the barriers to adherence to clinical instructions, such as why some patients fill their prescriptions and others don’t.
“We’re aggregating public data, taking a community survey,” Williams said. “We can represent social risk on a map: food insecurity, transportation barriers. Health systems and health insurance haven’t described population health in this way. On a map we can layer on different access points around food, fast food, farmers’ markets, access points around social services and then layer patients on top of that.”
Socially Determined creates individual risk scores in seven categories such as transportation and housing and creates a risk profile at the patient level to create cohorts and an intervention strategy.
The company itself shares in the risk of risk adjusted reimbursement. It has subscription-based pricing that is tied to financial and clinical outcomes.
Williams, who formerly worked in a practice serving the Sioux and Navajo, got involved in healthcare IT, became a consultant and headed Clinovations, which in 2014 was sold to the Advisory Board Company.
He said he never lost interest in the social determinants of health after watching his mother work in the field.
“My mom was an area director for Meals on Wheels and the Area Agency on Aging,” he said. “I got into this work because of her. I gained unbelievable insight into the patients. A lot of that information doesn’t get translated to care teams.”
Trevor Price of Town Hall Ventures said these are not companies bilking the system doing retrospective risk adjustments. They are serving a societal good, but also happen to be sustainable in growth equity.
“These are real business doing well by doing good at the same time,” Price said.
David Whelan of Town Hall Ventures said, “I think we’ve been humbled by response from entrepreneurs, investors and innovative provider systems. They are excited to see us.”
In May, CVS Health CEO Larry Merlo said this of the company’s potential merger with Aetna: “Now, the really exciting part of this transaction is our opportunity to rethink and reinvent healthcare in our country. And currently, there is a growing recognition of the impact that social determinants have on people’s overall health and wellbeing. And after the transaction closes, we will be in a position to address these forces in ways that have never been done through our extensive community presence, along with the broader use of the information and analytics.”
“Medicaid is a huge field, hot button,” agreed Mark Wullert, director of Marketing, RAM Technologies. The company works with health plans to administer government programs.
The social determinants of health are such a huge factor that insurance companies feel that by the time someone develops diabetes – and that represents about 30 percent of the population – it’s too late. They need to get to the pre-diabetes population.
Value-based insurance design moves care in this direction, by giving members incentive, such as offering a zero copay, for healthier behavior, he said.
A Medicaid Innovation Accelerator Program launched in 2014 supports states’ ongoing payment and delivery system reform through targeted technical support.
In 2018 CMS launched the Accountable Health Communities Model to promote clinical-community collaboration by screening community members for unmet health-related social needs, referring them to appropriate community services, and providing navigation services to those at highest risk.
CMS released a new strategy this year to focus on rural health services to meet the challenges of a population that CMS said tends to be more likely to be living in poverty, unhealthy, older, uninsured or underinsured and medically underserved.
Most recently, CMS released Medicaid policy to give states funding to use technology and data to combat the opioid crisis. Social determinants are seen as risk factors for opioid addiction.
CMS is providing the flexibility to states to address solutions such as telehealth, according to Valerie Rogers, director of State and Government Affairs for HIMSS, parent company of Healthcare Finance News.
The policy promotes greater coordination between case managers, prescription drug monitoring programs and public health data sources to provide a more indepth snapshot of what’s being addressed for the social determinants, she said.
Jeff Coughlin, senior director of Federal Affairs for HIMSS said data will be better integrated and shared.
“There are opportunities for for new technology,” Coughlin said. “I think this is giving money to states to spend on these different programs (such as) drug monitoring programs. Each state will look at this differently. The beauty of the Medicaid program is the autonomy for each state.”
Source: Healthcare Finance