SDoH, Chronic Care, Reinsurance, Pools and Doughnuts

By Clive Riddle, February 13, 2020

I gave a presentation recently to a healthcare group on the state of the business of healthcare in 2020, and in the ensuing reactor panel discussion, the topic of return on health plan investment in longer range initiatives such as in SDoH or applicable chronic care management programs came up.

For Medicare programs, plans can have the motivation to invest in programs that may take years to generate material improved outcomes and resource savings for individual patients – as they potentially can keep these patients enrolled for the duration. But with Medicaid and commercial programs, there is ongoing turnover – employees change jobs and individual Medicaid eligibility is subject to change.

Thus a plan that invests in long range programs for their covered Medicaid and commercial populations, may not retain specific individual members long enough to reap the improved outcomes and savings for those specific individuals. An SDoH investment might get a specific member on a better footing to improve their health, but then the member loses eligibility with that plan for a variety of reasons – loss of Medicaid eligibility, loss of a plan’s Medicaid contract, change of employer, change of plan during open enrollment, etc. Programs to improve certain chronic conditions or effect lifestyle or behavioral changes have the same challenge.

Many plans are investing in SDoH at least partly through a philanthropic perspective – typically providing funding through their plan’s affiliated foundation to designated Community Based Organizations that may serve some of the plan’s members, but also serve other segments of the population as well. Here’s some headlines during the past month in this regard:

• Anthem Blue Cross and Blue Shield Activates $3.6 Million Across Ohio in 2019
• CareFirst Contributed $43 Million To Health Initiatives in 2019
• Kaiser Permanente pledges $5.1M in 2020 to reduce homelessness
• Blue Shield of California Promise Health Plan Awarded $1.1 Million

But what if there was pooled funding mechanism for SDoH and eligible long-range chronic care management programs for pre-Medicare populations, Plans could refer members into applicable programs, and uninsured patients could participate as well. Plans could have allocated contribution requirements, along with other sectors providing funding.

Think of it as reinsurance pooling on the other end of the spectrum. In fact, a case can be made for advancement of pooling on both ends of the spectrum. Patients meeting catastrophic case criteria would transfer to coverage by kind of catastrophic “Medicare for All” plan. Plans would provide funding for the pooled plan, along with public funding, and uninsured could qualify as well if they met the criteria.

Between the pooled SDOH/Chronic Care programs, and pooled Catastrophic program, would be the doughnut hole filled by our quilt of current health care coverage.

Reinsurance pooling, while not as for along as a catastrophic Medicare for All program, does exist. Much of such efforts focus on the state ACA individual coverage markets. The Center on Budget and Policy Priorities published this paper last April covering the topic:  Reinsurance Basics: Considerations as States Look to Reduce Private Market Premiums. And for example, last August, CMS “approved Montana’s plan to create a reinsurance pool that aims to help lower individual health insurance premium costs.”

Pooled funding for SDoH programs is also not a new idea.  Back in 2016, the Public Health Institute published this paper: When Tackling the Social Determinants of Health, Pooling Funding Streams Is the Wise Course, stating “It seems like a logical approach to tackling tough social problems: coordinate across agencies, pool funds, and take aim at the issues from all angles. In practice, that rarely happens, but not for want of trying.”

You’ll also find the topic addressed in this February 2015 paper from the Center for Health Care Strategies: State Payment and Financing Models to Promote Health and Social Service Integration, and in this Institute for Medicaid Innovation January 2019 paper:  Innovation and Opportunities to Address Social Determinants of Health in Medicaid Managed Care.

In fact, while a December Health Affairs Blog piece Health Conundrum: How State Budgets Can Find The Balance Between Social Versus Medical Services  by Shannon Brownlee, Vikas Saini, and Benjamin F. Miller is skeptical that SDoH investment can lower spending – “there are several reasons to doubt this argument, if only because rising prices for medical services are driving national health care expenditures more than rising medical need” – they do go on to advocate pooled funding.

They authors state “in our report, we recommend that the California state government, and by implication all state governments, serve as a catalyst for multiple co-ventures of this type. States can convene all stakeholders, including health care institutions, health plans or payers, social service providers, community development financing institutions, and public health officials. They can also commission research, create the infrastructure for pooled funds for investing in community conditions, and draft new community benefit regulations for hospitals that would bring nonprofit health care providers to the table with funds to offer.”

So – food for thought - about programs that think about food as part of the solution, and doughnut holes between pools.