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Health Plan Spending Declines with Attention to Social Barriers

By Gregory A. Freeman  
   June 01, 2018

Addressing problems such as transportation and lack of healthy food improves the health of the insured while saving money for health plans, new research shows.

Health plans can substantially reduce the amount of money spent on healthcare expense by investing in solutions that address social barriers keep their customers from living healthy lifestyles, new research shows.

Research from WellCare Health Plans, which serves approximately 4.3 million members nationwide, and the University of South Florida (USF) College of Public Health, Tampa, indicates that healthcare spending decreases when people are successfully connected to social services that address social barriers, or social determinants of health, such as secure housing, medical transportation, healthy food programs, and utility and financial assistance.

The study assessed the impact of social services among Medicaid and Medicare Advantage members on healthcare costs such as physician office visits and emergency department use. These are some of the findings:

  • There was an additional 10% reduction in healthcare costs for people who were successfully connected to social services compared to a control group of members who were not.
  • That reduction equated to more than $2,400 per person per year in savings.
  • Among participants in the analysis, 56% reported all of their identified social needs were met and 44% reported that none of their needs were met.
  • Among the 5,035 social services received in the second year, the 10 most commonly reported social services represented 78.7% of all services.
  • The most commonly reported social services  were medical transportation support (14.5%), utility financial assistance (12.1%), food pantry or program (11.8%), free or reduced vision services (9.9%), general financial assistance (7.9%), free or reduced dental services (6.1%), medication assistance (5.7%), general transportation support (4.2%), housing support (3.8%), and rent assistance (2.7%).

Lead author Zachary Pruitt, MD, at the USF College of Public Health, Department of Health Policy and Management, says the findings add to the growing body of evidence suggesting that support for social service programs and interventions can improve community health outcomes and reduce healthcare spending, especially among Medicare and Medicaid populations who are often challenged by social determinants of health.

"While there is growing recognition that socioeconomic factors substantially affect a person's health status, this research is an important step toward quantifying how addressing social determinants of health impacts health costs," Pruitt says. "The results of our study show that providing social service assistance relates to significantly lowered healthcare spending."

The study examined medical expenditures associated with 2,718 WellCare Medicaid and Medicare Advantage plan members who accessed WellCare's Community Assistance Line—a toll-free, nationwide line open to the general public. Study participants called the Community Assistance Line between January 1, 2015 and March 1, 2016 and identified at least one unmet social need and received at least one referral to a social service organization.

Gregory A. Freeman is a contributing writer for HealthLeaders.


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