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Value-Based Care and the Call to Address Social Determinants

Value-Based Care Programs on the Rise

In a departure from the traditional fee-for-service model, health systems, hospitals, and physician practices are increasingly moving toward value-based care. Value-based care programs have payment models designed to compensate providers based on member outcomes rather than paying fees for services rendered. Prominent examples include Accountable Care Organizations (ACOs) working to ensure members get the right care at the right time, or the Bundled Care Payment Initiative, which tests payment and service delivery models that have the potential to reduce expenditures while preserving or enhancing quality of care.

According to the Health Care Payment Learning & Action Network, value-based care programs are increasingly being adopted across the country. Their October 2018 report showed that the percentage of health care payments tied to value-based alternative payment models increased 23% over a period from 2015 to 2017, with over 90% of payers expecting that adoption of these programs would continue to increase.[1] The newly-released 2019 report supports that expectation, showing that 35.8% of all U.S. healthcare dollars in 2018 were paid via alternative payment models, a 34% increase over the prior year.[2]

Addressing Social Determinants of Health

One of the ways that value-based care programs achieve greater value is by addressing the social determinants of health (SDOH) that have not been adequately addressed by traditional care programs. SDOH are the conditions of a person’s basic environment that affect their health outcomes. They are often categorized under the headings of economic stability, education, healthcare, community, and intrinsic factors (e.g. age, genetics, language).[3] These concerns are often interwoven with behavioral health, mental health, and substance use concerns. Social determinants are known to be strong indicators of disease complications, including mortality, and are considered to be responsible for many health inequities.[4]

Value-based programs often seek to improve patient adherence to care by targeting SDOH. There have been a range of efforts to this effect, with some creative initiatives being put into practice, such as meal plan programs for members, health plans forming partnerships with food banks, or even plans buying vacant apartment buildings to provide stable housing.

Figure: Social Determinants of Health – information from the Office of Disease Prevention and Health Promotion (ODPHP), 2019

Delivering Value to Members and Providers

Why is there such a focus on addressing social determinants? There are two ways to answer this question. The first is that these are upstream issues that impede an individual’s healthcare. For example, if a person doesn’t have access to transportation, it becomes difficult to keep up with a schedule of treatment appointments. Once a person’s foundational needs are met, both the member and the provider are better able to focus on improving their health.

The second answer is straightforward: SDOH intervention programs return financial value. There is a growing evidence-base demonstrating the potential these programs have to bring down costs while improving care outcomes. For example, certain studies of Medicare members have found that at-risk patients enrolled in care transition programs, such as those with interventions to provide community linkages, achieved a reduction in both 30-day readmissions and in overall healthcare costs.[5], [6], [7] Other studies have shown that care coordination interventions addressing housing, income, and nutrition, as well as improved proactive care programs (e.g., health screenings, vaccinations), have likewise decreased healthcare costs – while also improving condition management.[8], [9], [10]

Additional studies on the financial benefits and improved health outcomes that can be achieved through addressing SDOH can be found in this white paper by Angela Askren, Managing Editor at MCG Health.

Support for Efforts to Address SDOH

Despite the rise in value-based alternative payment models, the shift toward addressing SDOH in healthcare is still at an early stage. According to a recent study published in the Journal of the American Medical Association, only 24% of hospitals and 16% of physician practices screen members for SDOH.[11] It’s reasonable to expect those numbers to increase in the coming years as health plans engage in more value-based payment programs, and as this occurs, both health plans and providers will need the tools to scale their SDOH initiatives.

MCG Health helps healthcare organizations address social determinants of health by providing evidence-based tools in the Chronic Care, Transitions of Care, Recovery Facility Care, and Behavioral Health Care solutions. Included among the industry-leading care guidelines are SDOH assessment tools designed to allow care managers to quickly identify problems affecting their members. As these problems are identified, depending on the MCG solution used, the software automatically starts building a care plan that sets measurable goals and provides a list of intervention options for the care manager to select based on the individual patient. These include linkages to community-based resources for food, housing, social support, and more. From the point of view of the care manager, the workflow is streamlined, and the intervention options provided are actionable.

To learn more about MCG Health solutions to help your organization address SDOH in a way that enhances the member experience, supports cost savings, and improves health outcomes, click here.


[1] Health Care Payment & Learning Action Network. (2018, October 21). 2018 Measurement Effort. Retrieved from https://hcp-lan.org/apm-measurement-effort/.

[2] Health Care Payment & Learning Action Network. (2019, October 24). 2019 Measurement Effort. Retrieved from https://hcp-lan.org/apm-measurement-effort/.

[3] Kim, M. M., Swanson, J. W., Swartz, M. S., Bradford, D. W., Mustillo, S. A., & Elbogen, E. B. (2007). Healthcare barriers among severely mentally ill homeless adults: evidence from the five-site health and risk study. Administration and Policy in Mental Health, 34(4), 363-75.

[4] World Health Organization. (2019, March 16). Social Determinants of Health. Retrieved from https://www.who.int/social_determinants/en/.

[5] Larimer, M. E., Malone, D. K., Garner, M. D., Atkins, D. C., Burlingham, B., Lonczak, H. S., . . . Marlatt, G. A. (2009). Health care and public services use and costs before and after provision of housing for chronically homeless persons with severe alcohol problems. JAMA, 301(13), 1349-57.

[6] Boutwell, A. E., Johnson, M. B., & Watkins, R. (2016). Analysis of a social work-based model of transitional care to reduce hospital readmissions: preliminary data. Journal of the American Geriatrics Society, 65(4), 1140-7.

[7] De Jonge, K. E., Jamshed, N., Gilden, D., Kubisiak, J., Bruce, S. R., & Taler, G. (2014). Effects of home-based primary care on Medicare costs in high-risk elders. Journal of the American Geriatrics Society, 62(10), 1825-31.

[8] Rantz, M., Popejoy, L. L., Galambos, C., Phillips, L. J., Lane, K. R., Marek, K. D., . . . Ge, B. (2014). The continued success of registered nurse care coordination in a state evaluation of aging in place in senior housing. Nursing Outlook, 62(4), 237-46.

[9] Taylor, L. A., Tan, A. X., Coyle, C. E., Ndumele, C., Rogan, E., Canavan, M., . . . Bradley, E. H. (2016). Leveraging the social determinants of health: what works? PLOS One, 11(8), 1-20.

[10] Basu, A., Kee, R., Buchanan, D., & Sadowski, L. S. (2012, February). Comparative cost analysis of housing and case management program for chronically ill homeless adults compared to usual care. Health Services Research, 47(1 Pt 2), 523-43.

[11] Fraze, T. K., Brewster, A. L., Lewis, V. A. (2019). Prevalence of Screening for Food Insecurity, Housing Instability, Utility Needs, Transportation Needs, and Interpersonal Violence by US Physician Practices and Hospitals. JAMA Netw Open. 2019;2(9): e1911514.

This article was created in collaboration with the sponsoring company and our sales and marketing team. The editorial team does not contribute.
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