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Will Social Determinants of Health Be the Next Step in Value-Based Payment Models?

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By: Sam Cohen
3 Minute Read

Just as many physician practices are beginning to gain experience with value-based payment models, health policy discussions are already turning to what many are calling the next step in the evolution of value-based care: social determinants of health (SDoH). The conversation focuses on what role SDoH play in patient health and how clinicians can help address SDoH disparities. We provide below an introduction to SDoH and an explanation of what they mean for physicians and medical practices.

What Are Social Determinants of Health?

SDoH are the conditions in the places where people are born, grow, live, learn, work, play, and age that affect health risks and outcomes. On a practical level, conversations about SDoH normally are about issues such as food security, housing stability, interpersonal violence (e.g., domestic violence, child abuse), transportation, and utilities (e.g., heat, water, electricity). More broadly, SDoH also can include issues such as economic security, personal safety, and the environment (e.g., air pollution, drinking water quality).

60% of health outcomes are tied directly to environmental, social, and behavioral factors.

SDoH have a profound impact on health outcomes. According to one study, 90% of health care spending in the United States is on direct medical care, but this spending drives only 10% of health outcomes. In contrast, 60% of health outcomes are tied to SDoH—specifically, environmental (5%) and social (15%) circumstances, along with the behaviors driven by these circumstances (40%). (The remaining 30% of health outcomes are driven by genetic factors.) Given the large role that SDoH play in driving health outcomes, it makes sense that efforts to improve the quality of patient health and reduce health care costs need to address these issues.

How SDoH Are Being Addressed

Some commercial payers and larger health systems already have begun initiatives to address SDoH disparities, and these efforts have been accelerating. For example, Geisinger Health System operates a “Fresh Food Farmacy” program, under which physicians may write prescriptions for free, healthy food for food-insecure patients with diabetes. More recently, Kaiser Permanente announced a $200 million investment to combat homelessness, and BlueCross BlueShield of North Carolina announced an investment of $50 million in community health initiatives.

Government payers also have begun taking action. At the federal level, the Center for Medicare & Medicaid Innovation is testing a model that uses screening, referral, and community navigation services to identify and address health-related social needs. Some states also have started similar work. For example, as part of its transition to Medicaid managed care, the North Carolina Department of Health and Human Services (NCDHHS) has stated that it will require participating managed care organizations to use a standardized statewide screening tool covering housing, food, transportation, and interpersonal violence to identify patients’ unmet health-related resource needs.  Patients will then be connected to appropriate community resources through a statewide resource platform being funded and developed by a public-private partnership. NCDHHS also will run regional pilot programs testing evidence-based interventions linking health care and social services.

What SDoH Mean for Physicians

Physicians agree that SDoH are an important factor in patient health outcomes. According to a recent survey, more than 45% of physicians agreed that it would greatly or moderately help their patients to get information to receive help obtaining affordable housing and sufficient food and/or to have help increasing their income. But at the same time, no more than 5% of physicians thought that it was their responsibility to address each of these issues.

It’s true that physicians do not always have the necessary capabilities to address SDoH, lack the required time, and are not paid for these services; furthermore, patients often do have other resources for this type of assistance. However, it seems likely that the current emphasis from commercial and government payers on addressing SDoH will, at some point, have an impact on the expectations that are placed on physicians and medical practices.

Potential impacts on practices may come in a variety of forms:

  • Clinical Care: Payer focus on SDoH may place more responsibilities on individual physicians. For example, physicians may become responsible for administering SDoH screening assessments and referring patients to community resources for identified issues. Physicians may also need to obtain training in new areas, such as the emerging field of “culinary medicine.” Practices could also potentially be asked to help enroll patients into relevant human services programs.
  • Practice Management: While physicians generally make referrals to separately funded human services programs now, in the future payers may combine payments for clinical treatment and human services programs into a single payment bundle. Even without such a change, practices may decide to enter into financial arrangements with human services providers to maximize financial gains from addressing their patients’ unmet needs. Another potential reimbursement change would be risk-adjusting payments for patient social disparities in addition to clinical factors. Practices also may be required to expand their data collection and data reporting capabilities.
  • Burnout: Addressing SDoH places additional responsibilities on physicians and practices, which could increase physician burnout. Alternatively, it is possible that efforts to address patients’ unmet needs may result in physicians treating healthier, more compliant patients, which potentially could reduce burnout.

Physicians and practice managers should be on the lookout for future developments in this area, so that they are best positioned to influence or adjust to any proposed requirements.

Sam Cohen
Sam Cohen is Curi’s Senior Vice President of Health Policy. Curi members may contact him directly at and 919.878.7602. Readers also can follow him on Twitter @samuel_c_cohen.
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