A new JAMA report found payment formulas that ignore “social risk can underpay for vulnerable populations, potentially exacerbating inequality.”
The study looked at Massachusetts’ Medicaid program MassHealth’s social determinants of health (SDH) payment model that supports care for vulnerable members and improves payment equity.
Massachusetts was the first state in the nation in October 2016 to create a payment model that adds SDH variables to medical diagnoses, age and sex.
The study looked at MassHealth's payment model and whether a model that includes SDH can provide more equitable payments for the care of socially vulnerable people.
The payment model removes or significantly reduces underpayments for several subgroups in hopes of allowing clinicians to “better meet the needs of socially vulnerable patients," according to the study.
The payment model “allocates payments within a fixed budget accounting for socioeconomic and psychosocial as well as medical risk.” As an example, the payment model may pay doctors more for patients living in distressed neighborhoods. That money can be used to support innovations that address “social complexity,” such as helping patients find housing, teaching better nutrition or creating IT infrastructure to link at-risk patients with doctors.
“Such programs could draw more people with complex problems — those who have the most to gain from coordinated care — into managed care,” wrote the study authors.
Taking SDH into account can reduce healthcare costs and improve care. A recent study looking at social determinant partnerships between healthcare organizations and community-based organizations found that the partnerships are reducing hospital admissions and most of them are realizing cost savings. One issue is that the partnerships said they are having trouble addressing “underlying social determinants to improve health in the long-run.”
One way to tackle the underlying social determinants is providing more funding for doctors so they can spend more time working with patients, families and their support systems. Incorporating SDH into payment models is considered the future of U.S. healthcare bundled payment programs.