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What Are Social Determinants of Health?

Did you know that your zip code is a better predictor of your health than your genetic code? Public health experts – and your health insurance provider – have long known that the air you breathe, the education you receive, your net worth, and even the music that you listen to are strong indicators of your overall health – and the possibility that you might need expensive medical procedures in the future. By some measures, up to 50% of your overall health is determined by social, economic, and environmental factors. As the movement to value-based payment continues in health care, there has been a renewed focus from policymakers and payors on “social determinants of health” in an attempt to curtail health care costs by addressing the root problems of poor health; before the patient is at-risk and when the interventions may be cheaper than medical care.

The concept that social determinants of health play a crucial role in limiting health care costs is hardly new, but has been more prominently incorporated into payment reform programs recently. New York, for example, has established the Health and Recovery Plan (“HARP”), a program designed for Medicaid beneficiaries with serious mental illness or substance use disorders. The HARP program combines traditional medical care with “Home and Community Based Services,” with the intent to ensure that HARP beneficiaries also receive care for underlying social factors that exacerbate their mental health or substance use issues. HARP now includes, as part as the Medicaid managed care premium paid by New York State to managed care organizations administering the program, coverage for services ranging from assistance in accessing transportation, locating and securing housing, instruction on personal budgeting, and both general and vocational education services. While HARP is intended for beneficiaries over 21, New York is launching a similar program for children with behavioral health needs. New York has recently also implemented a rule for Medicaid managed care organizations requiring them to include services offered by “community-based organizations,” such as food programs or job training programs, in value-based contracts between Medicaid managed care organizations and downstream providers with the intent to address social factors in “traditional” health care payment arrangements.

While policymakers and payors are expanding attention to social determinants of health to shape health programs (and in so doing decrease money spent on medical interventions), so too are they eyeing social factors in determining the cost of health care. Companies, such as LexisNexis, are aggregating personal data and developing risk scores that are based almost entirely on an individual’s socioeconomic factors, and marketing that information to health care payors. Though LexisNexis states that it does not intend for the scores to be used to price insurance products, experts have identified risk scores as a potentially useful tool in pricing health plans. Since social factors tend to benefit wealthier individuals, with pricing health plans based on socioeconomic data has a potential to exacerbate disparities in health care access between the rich and poor. The connection between steady employment and better health outcomes has been used to justify Medicaid work requirements in states that have recently requested waivers from the federal government to implement such requirements. Others have pointed that this approach may confuse cause and effect; people with jobs are in a better socioeconomic position than those who aren’t, and therefore are generally healthier. These programs and products simply demonstrate the wide-ranging effect “social determinants of health” already have on health care and the opportunity for their role to grow substantially.

Social determinants of health are not a new idea, but they have a renewed focus as a cost-effective way to decrease health care expenditures. For providers, it may mean incentives or requirements to incorporate external factors into their delivery of care. For organizations that address such social issues, it may portend increased funding. Attention to this area may provide a unique opportunity to realize savings for providers in risk-based agreements and allow providers to get ahead of the curve in a “new” trend in health care.

Cassie Chang, a Legal Intern (not admitted to the practice of law) in the firm’s New York office, contributed significantly to the preparation of this post.

©2019 Epstein Becker & Green, P.C. All rights reserved.

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About this Author

Gregory R. Mitchell Epstein Becker Health Care Lawyer
Associate

Gregory R.  Mitchell is an Associate in the Health Care and Life Sciences practice, in the New York office of Epstein Becker Green.

Mr. Mitchell:

  • Negotiates and drafts managed care agreements by and among managed care companies, insurers, hospitals, health systems, independent practice associations (IPAs) and similar provider organizations, behavioral health and substance use disorder treatment providers, physicians, and ancillary providers relating to Medicare Advantage, Medicaid managed care, as well as fully-insured and self-insured lines of business...
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Kathleen M. Premo, healthcare lawyer, Epstein Becker
Member of the Firm

KATHLEEN M. PREMO is a Member of the Firm in the Health Care and Life Sciences practice, in the St. Petersburg office of Epstein Becker Green. For more than 20 years, she has served as a legal and strategic advisor for a diverse range of health care and business clients, including Fortune 500 companies, hospital and health systems, Medicare Advantage provider groups, and entrepreneurial privately held companies.  Ms. Premo’s clients appreciate her sophisticated business acumen and insightful, real-world legal counseling, honed while serving as a legal advisor, strategist, and health care executive during her years as General Counsel and Chief Legal Officer for various health care clients. 

Ms. Premo advises a full spectrum of health care industry service providers and businesses, including such risk-bearing organizations as medical service organizations (“MSOs”), independent practice associations (“IPAs”), accountable care organizations (“ACOs”), physician organizations and large medical groups, hospitalist and post-acute providers (including hospices, nursing homes, and home health agencies), specialty care networks, ambulatory care facilities, management companies, and private equity specializing in health care companies, among others.

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