Yogin Shroff, Senior Partner and Chief Operating Officer
The social determinants are well understood for their role in health and wellbeing. What do we know about the cost of unmet social needs?
A recent study by Healthcare IT News suggests that unmet social needs represent a staggering $1.7 trillion of avoidable healthcare spend annually.1 While the figure is startling on its face, it makes some sense in context; 80% of health outcomes are driven by the social determinants – conditions in the places where people live, learn, work, and play.
FOOD INSECURITY AND HEALTHCARE COSTS
Against the backdrop of COVID-19 food insecurity has become one of the most challenging social limitations to address. An estimated 1 in 8 Americans has limited access to affordable, healthy foods, which translates to an estimated $53 billion annual drain on the healthcare industry. These secondary effects take many forms, but chief among them are an increased incidence of chronic conditions and increased volume of avoidable hospitalizations.2
EMERGENCY DEPARTMENT UTILIZATION AND ACCESS TO CARE
Emergency Department (ED) utilization is a standard healthcare KPI for its obvious cost and clinical implications. Not only does it take center stage for a myriad of quality concerns including NCQA accreditation, but it is also of central interest to the finance function. After all, ED utilization concerns the efficiency with which costly resources are deployed to meet the right need in a high-cost setting.
Members with unmet social needs – particularly, those with limited access to a PCP – are more likely than others to use ED services where non-urgent care can suffice. This results in inefficient allocation of ED resources, and it encumbers healthcare organizations’ ability to deliver high-quality care.
Bruce Broussard, President and CEO of Humana, has said, "If we are to successfully confront the issues of cost and efficiency in care, we first need to fully understand the systemic problem of wasteful spending.” The image that follows highlights sources and effects of waste from unmet social needs.
THE JOURNEY AHEAD
Social needs including economic stability, education, health and health care, neighborhood and built environment and social/community context have profound and lasting impacts on individual health and wellbeing. Not only are members happier and healthier when social needs are met, but considerable healthcare spend is avoided in the process. Proactively identifying unmet social needs and connecting members to appropriate services must remain an executive priority among healthcare professionals into the future.
1 Sullivan, T (09, October 2017) Social determinants of health and the $1.7 trillion opportunity to slash spending. Retrieved from https://www.healthcareitnews.com/news/social-determinants-health-and-17-trillion-opportunity-slash-spending
2 Morse, S (30, August 2019) SDOH: Food insecurity adds $53 billion annually to healthcare costs. Retrieved from https://www.healthcarefinancenews.com/news/sdoh-food-insecurity-adds-53-billion-annually-healthcare-costs
3 LaPoint, J (25, July 2019) Avoidable Hospital ED Visits Cost Healthcare System $32B Annually. Retrieved from https://revcycleintelligence.com/news/avoidable-hospital-ed-visits-cost-healthcare-system-32b-annually
4 Uscher-Pines, L, Pines, J, Kellermann, A, Gillen, E, Mehrotra, A (January 2013) Deciding to Visit the Emergency Department for Non-Urgent Conditions: A Systematic Review of the Literature. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4156292/
5 Farr, C (05, May 2020) U.S. hospitals are losing millions of dollars per day in the midst of the Covid-19 pandemic – and recovery may take years. Retrieved from https://www.cnbc.com/2020/05/05/hospitals-losing-millions-of-dollars-per-day-in-covid-19-pandemic.html