Updated on: June 7, 2018

Healthcare Costs, Coding, and The Social Determinants of Health: A Necessary Marriage

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Original story posted on: June 4, 2018

The industry knows that focusing more on SDoH reduces costs.

Healthcare costs and coding have been married over 35 years, since the Social Security Act was amended to include a national Diagnostic Related Groups (DRG)-based hospital prospective payment system for all Medicare patients.  The culture of the healthcare industry changed forever, transitioning from one focused on the care of a patient’s health to the care of the business of health care. While the marriage has been tense, it has been enduring.

Countless patient populations have risen to the top of the industry’s cost priority list over the years from strokes to heart failure, to substance use and more recently integrated behavioral health. All have dramatically impacted reimbursement and thus coding; fast forward to 2018. Costs continue to play a prominent role, with $1.7 trillion are spent on 5% of the population due to a long standing factor, the Social Determinants of Health (SDoH).

The SDoH have been around for centuries; ask any social worker or individual employed on the front lines of care. Yet, these non-medical factors that impact a patient’s health (e.g. food insufficiency, employment, housing, social supports, socioeconomic status) recently emerged as a HOT topic. Seventy seven percent of the hospitals with the highest share of low-income patients were penalized for readmissions, compared to 36% of facilities with the least poor patients. Literature identified how the SDoH contribute heavily to readmissions and thus, costs.

The industry knows that focusing more on SDoH reduces costs sweet and simple. Yet, how tough it has become for the interprofessional care team to complete assessments that ask about the SDoH, plus provide needed resources. Organizations are wrestling with an endless array of new regulations, reimbursement structures, and requirements to assure fiscal sustainability. What results is less time to talk with patients about their obstacles to non-medical care.

Ron Hirsch’s recent article in RACmonitor discussed the need to document the SDoH and use the new ICD-10 “Z” or “Stress” codes. The non-clinical documentation of case managers, social workers and other team members has value. Need more impetus? Clinical factors actually play a small role in the risk of premature death, as little as 10%, with other more pressing causes:

  • 40%: individual behavioral factors (e.g. treatment adherence, acceptance of the need for treatment)

  • 30%: individual genetics and genetic predisposition to illness

  • 20%: social and environmental factors

The industry has plenty of data to demonstrate how lack of attention to SDoH increased costs. Findings in May revealed a 10% cost reduction for patients successfully connected to social service programs compared to those who were not; some $2400 per person annually. A large body of evidence notes how these programs improve community health programs overall, particularly for Medicare and Medicaid beneficiaries. Relevant psychosocial data is being actively integrated into electronic health records and point of service workflows to assure availability to all who need it. Health care providers across 500 cities in the United States can view what SDoH impact their community directly through the City Health Dashboard. Countless resources empower health care providers to both manage and respond to the psychosocial needs of their patient populations. One example is UberHealth, which provides health care organizations the ability to schedule needed medical appointment transportation.

Insurers are implementing programs fast and furiously to bridge the social service and physical/behavioral health gap. The Blue Cross Blue Shield Institute addresses social and environmental issues for beneficiaries, focusing on the “Zip code effect”. Focusing on beneficiaries in need via their zip code is proving a win.  The institute is partnering with Lyft, CVS and Walgreens to address transportation and pharmacy deserts, and will add fitness and nutrition providers in 2019. Kaiser recently announced a $200 million initiative to address homelessness in eight states, plus Washington, D.C. The Food as Medicine Program through Health Partners Plans in Pennsylvania serves chronically ill Medicaid and Medicare beneficiaries of targeted regions.

With change the only constant in our industry, the SDoH are here to stay. Healthcare systems must assure that staff are knowledgeable about what the SDoH are and how they impact their organizations and populations served. Staying abreast of the means to leverage reimbursement is vital to organizational sustainability and population wellness.

What’s next? Stay tuned on Tuesday, June 5th to hear more.

CORRECTION: This article has been corrected to show that the correct name and location of the managed care organization is Health Partner Plans in Pennsylvania and that the Kaiser plan to address homelessness is in eight states plus Washington, DC.



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Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Ellen Fink-Samnick, MSW, ACSW, LCSW, CCM, CRP

Ellen Fink-Samnick is an award-winning healthcare industry expert. She is the esteemed author of books, articles, white papers, and knowledge products. A subject matter expert on the Social Determinants of Health, her latest books, The Essential Guide to Interprofessional Ethics for Healthcare Case ManagementSocial Determinants of Health: Case Management’s Next Frontier (with Foreword by Dr. Ronald Hirsch), and End of Life Care for Case Management are published through HCPro. She is a panelist on Monitor Mondays, a frequent contributor to Talk Ten Tuesdays, and a member of the Editorial Advisory Boards of Professional Case Management, Case Management Monthly, and RACmonitor. Ellen also serves as the Lead for Rise Association’s Social Determinants of Health Community.

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