GroundGame.Health Principal Staff Valerie Cerra is a veteran of the healthcare industry leading with a new perspective based on social impact.
I've spent the past year in the same industry as the previous 16 years, and I barely recognized it. In October 2023, I started consulting for organizations that are described as social impact companies. This explanation was new to me, but I understood it to mean that it is based on a social mission and that many social care professionals are busy with that mission.
A few months into working for this organization, I had an epiphany. This social impact company was actually a healthcare company. The whole medical department was up and running and I didn't know that.
According to a McKinsey article, “clinical factors account for only 20% of an individual's health outcomes, with the remainder attributable to factors such as health-related social needs.” It directly affects the individual. These needs may include housing insecurity and lack of access to healthy food and transportation. Additionally, McKinsey said that 45% of consumers report experiencing at least one HRSN on a regular basis, and the majority have multiple unmet needs.
As a long-term portfolio management expert, I interpret this as a macro risk that needs to be controlled to ensure that other investments and innovations deliver certain results. How could I have missed this for so long?
Social care in medicine
I think of the social sector as something of an underappreciated sidekick that has been there all along, quietly doing big things. Until recently, we found that social care was often a rounding error on the income statements of large healthcare organizations, supported primarily by governments, donors and volunteers. Social care companies show the number of lives saved and the return on money and time spent in the community. In recent years, HRSN has begun to appear in the strategic parlance of forward-looking health planning, mostly layered within initiatives such as health equity and community giving back.
However, thanks to some major advances, social work has risen to the center stage of the medical industry. Just as Buzz Lightyear had his first big cinematic moment and viewers realized that Woody wouldn't be half the toy without him, this sidekick is ready for that moment. It was done.
To give a practical example, North Carolina designed and implemented a health opportunity pilot that benefited Medicaid recipients in specific counties. Participating health plans were required to provide evidence-based interventions that address social needs in four areas: food, housing, transportation, and interpersonal violence/toxic stress. According to the state Department of Health and Human Services, “Two years into the pilot, the state has reduced monthly health care costs by approximately $85 per Health Opportunity Pilot (HOP) beneficiary.” With over 25,000 subscribers serving as of September 30th, this is estimated to be a net savings of over $2 million per month.
Imagine what would happen if such a program were optimized and expanded. What I also found interesting was that the pilot data suggested that the greatest value was not in solving one social need, but rather that long-term participation in the pilot would reduce health care costs. This suggests that it may be associated with larger cumulative reductions.
In my view as a veteran of the healthcare industry, this is definitely a huge data point that will have an impact not only on how social care is viewed but also how it is funded. Anyone who has played a role in a medical expense portfolio will tell you that this is a great return on investment. Today, as a new member of the social care sector, I look back on that success through the lens taught to me by my social care colleagues. Efforts to support HRSN can be transformative and even save lives.
A call to action for healthcare leaders in 2025
We hope that healthcare industry leaders and other mature sector professionals will consider this a reminder to continue to look for opportunities to support health-related social needs. I declare that 2025 will be the year that healthcare becomes socialized. By advancing the Medicaid 1115 Waiver Program in both already approved and pending states, by advancing the 2024 Centers for Medicare & Medicaid Services Physician Fee Schedule, and by incorporating social needs indicators from HEDIS, State agencies, payers and providers will all be incentivized.
If you are a medical worker, consider collaborating with social welfare experts. Identify colleagues working in this field and build closer connections. The factors are market-specific, so listen carefully to see the associated policies and investment results. Even better, educate yourself on market regulations, including where support funds are initiated. This means someone has already identified the business case. Also follow the work of the National Quality Assurance Committee on quality measurement of social needs.
Don't ignore this type of work. Instead, find ways to encourage it. Solving social needs is critical to healthcare. Now that you understand, you can find ways to get involved.
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