US health systems spent $2.5 billion on social determinants programs in the last three years - but there's room for growth
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U.S. health systems spent $2.5 billion on social determinants programs from 2017 to 2019, primarily focused on housing interventions, employment, education, food security, social and community context, and transportation, per Healthcare Dive.
For context, SDOH refers to health-influencing factors outside clinical settings - like access to transportation - that drive 80% of health outcomes.
The investment indicates that providers are starting to take an active role in addressing SDOH - opening an opportunity for digital health firms with tools that tackle social factors and creating a healthcare entry point for nontraditional players.
As healthcare firms start to take action on addressing patients' SDOH, we've seen them seek out partnerships with third-party tech companies: For instance, health delivery network Kaiser Permanente teamed up with health IT firm Unite Us to link its members with services that address social needs.
Further, ride-hailing company Lyft expanded its partnerships with insurers BlueCross BlueShield and Humana in February 2019 to provide nonemergency medical transportation (NEMT) to some of their members - and with transportation issues costing the US healthcare system $150 billion annually, this tie-up benefited the insurers via savings and the ride-hailing giant through growth in its NEMT business.
But while the $2.5 billion investment is significant, it represents a small share of hospitals' community benefit spending - and uncertainty around how to best extract clinical value from SDOH data could help explain why it isn't a top investment area right now.
For instance, health systems spend $60 billion annually on community benefit spending - meaning spending $2.5 billion on SDOH programs over the course of two years is small potatoes.
And we think the hesitancy to spend more on SDOH programs could be due to the fact that health firms aren't clear on how to best extract value from social health data: For instance, nearly 49% of healthcare leaders say a lack of effectiveness metrics will be a barrier to integrating SDOH into care programs, while 41% say they'll be held back by needing to add the skill sets required to address SDOH, per a recent Change Healthcare survey.
And these problems are compounded by a lack of standardized terminology for describing SDOH in EHRs, which diminishes the usefulness of SDOH data. And until providers are clear on how to best make use of SDOH data, we think spending on SDOH programs will continue to be deprioritized in favor of spending on other areas of healthcare with a clearer return.
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