Understanding Medicaid Managed Care Investments in Members' Social Determinants of Health

Abstract

Despite widespread interest in addressing social determinants of health (SDH) as a means to improve health and to reduce health care spending, little information is available about how to develop, sustain, and scale nonmedical interventions in diverse payer environments, including Medicaid Managed Care. This study aimed to explore how Medicaid Managed Care Organization (MMCO) leaders interpret their roles and responsibilities around SDH, how they garner resources to develop and sustain interventions to address SDH, and how they perceive the influences of external organizations on related activities. Semistructured qualitative key informant interviews were conducted with a purposive sample of 26 Medicaid Managed Care corporate executives. Data were analyzed with an iterative coding, thematic development and interpretation process. MMCO leaders' interests and activities around interventions to address SDH are described, as well as their perceptions of existing and potential incentives and barriers to expanding these interventions. Despite significant experimentation and programmatic diversity of interventions addressing social determinants, MMCO leaders struggle with clinical integration, financing, and evaluation efforts that could promote sustainability. Though their efforts are nascent, MMCO leaders are investing in tackling social determinants to improve health and to decrease health care spending in managed care settings that serve low-income populations. Results highlight both opportunities and concerns about sustaining and scaling clinical interventions addressing SDH.

Introduction

A growing body of literature documents the physical and mental health impacts of social and economic conditions.^1

–6 This work includes studies demonstrating that the health effects of poverty and other social adversities may be less profound in places that meet patients' material needs, such as food and housing.^7,8 As a result, there is mounting interest in how communities can lessen the impacts of adverse social determinants of health (SDH) in various settings, including within the context of health care delivery.^9

–15

Health care payers serving large populations of patients facing socioeconomic adversity may find the intersection of health and social context especially relevant because SDH are associated not only with health care quality, but also with costly health care utilization.^{16

–23} To the extent members' socioeconomic needs can be effectively addressed, health care payers could realize lower health care costs. In the United States this has implications for Medicaid Managed Care organizations (MMCOs) based on the low-income populations they serve and their capitated payment models. Over the last 15 years, there has been a nationwide increase in the number of patients enrolled in Medicaid managed care programs,²⁴ which now enroll more than half of all Medicaid beneficiaries.²⁵ Medicaid programs cover more than 70 million beneficiaries as of 2016.

Given the theoretical financial incentives for MMCOs to reduce the impacts of social and economic conditions on members' health care costs, this study was conducted to understand how MMCOs make business decisions about investing at the intersection of SDH and clinical care. This study sought to explore how MMCO leaders understand and define SDH, how they interpret their roles and responsibilities around their patients' SDH, and how they have considered, implemented, funded, and evaluated projects focused on SDH. It is anticipated that this study would inform local and national efforts to translate the growing interest in this field into substantive, actionable implementation and dissemination strategies.

Methods

Participants

A National Advisory Committee (NAC) that included experts from Medicaid Managed Care, state Medicaid programs, and health services research used nationally available health plan lists to recommend an MMCO sample that was diverse across the following characteristics: investments in SDH interventions; payer type (eg, a mix of Medicaid-only organizations and organizations with a mix of commercial and Medicaid enrollees); geographic region in the United States; nonprofit status (eg, for-profit versus not-for-profit organizations); and state-level Affordable Care Act Medicaid funding (eg, opting in or out of Medicaid expansion). Potential informants were initially contacted by e-mail. At the conclusion of each interview, participants were offered the option to recommend other MMCO leaders for additional study interviews.

The final sample included 26 corporate leaders from 16 MMCOs that together provide care in more than half the United States, including 2 states that do not receive federal Medicaid expansion dollars. The corporate leaders sample was selected based on the assumption that these executives are responsible for making organization-wide decisions about institutional investments. MMCOs included in the final sample operate in geographically diverse areas across the United States. Of 16 plans, 11 enrolled both commercial and Medicaid-insured members; 2 were for-profit and 14 were not-for-profit organizations. Total covered lives represented by the plans included more than 25 million beneficiaries; individual plan membership ranged from approximately 6000 to 9 million enrollees.

Data collection

Semistructured interviews were conducted by authors LG, RM, and SA. Interviews were conducted by phone, lasted approximately 60 minutes, and were audio recorded. Participants were asked to describe their organizational roles; their definition of SDH; how their organization prioritizes members' SDH; clinic and non–clinic-based SDH interventions funded or otherwise supported by their organization; and their perception of state, federal, and other organizations' influences on SDH-related activities conducted by MMCOs. Informed consent was obtained for all study participants. The research was approved by the University of California, San Francisco Human Research Protection Program.

Analysis

Each interview was professionally transcribed and uploaded into the web-based qualitative analysis software Dedoose version 6.1.18 (SocioCultural Research Consultants, LLC, Los Angeles, CA). Researchers followed an iterative coding, thematic development, and interpretation process.^26,27 First, the researchers read the interview transcripts, with each transcript being reviewed by at least 2 researchers. While reading, the team discussed emerging themes related to SDH definitions; organizational mission and values; SDH intervention activities; and perceived barriers and incentives to adoption of these activities. The team then developed a list of codes based on these themes and 2 independent research team members coded each transcript. In regular meetings, the team discussed the coding process, resolved coding discrepancies, identified new themes, and developed new codes to capture these themes. This process included making sense of ambivalent and contradictory statements and articulating themes that were common across key informant interviews. All 4 authors participated in data coding and analysis.

Results

Of the 26 informants, one half held the title of president, vice president, executive director, or chief executive officer. Four were chief medical officers. Other titles from the informant pool included Vice President Medicaid, Vice President of Quality, Vice President of Strategic Partnerships, Director of Quality Improvement, Director of Outreach, Director of Provider Network Development, and Director of Public Policy. Informants' comments were organized into 4 sections: (1) how MMCO leaders understand SDH and organizational obligations to address SDH, (2) financial and other incentives to address SDH, (3) translation of SDH interests into client services practices, and (4) challenges to addressing SDH in the MMCO context.

Defining SDH and organizational commitments

The majority of MMCO interviewees reported a strong sense of mission to improve the health and well-being of low-income populations. This was especially true among leaders from organizations that serve Medicaid populations exclusively, who reported that addressing SDH was a foundational element of their MMCO's mission.

Some interviewees, however, described a prior, exclusive emphasis on providing medical services and only a more recent interest and/or commitment to addressing poverty, housing, and other life circumstances that shape health. Increases in the number of Medicaid enrollees prompted by the Affordable Care Act explain this recent growth of interest in beneficiaries' nonmedical needs. For example, among agencies that historically have not served large proportions of Medicaid enrollees, a larger and more economically diverse Medicaid population has encouraged MMCOs to consider social determinants.

Supporting the alignment between aspects of organizational mission and a growing focus on SDH, all interviewees described understanding the term “social determinants of health,” and most offered definitions consistent with existing literature on this topic. One informant noted, “[SDH are]…not strictly medical conditions but sort of the conditions of life that may impact the way people respond to their health and seek care.” However, not all participants routinely used the term SDH. Terms frequently used to refer to SDH included, in no particular order, social correlates, social contexts, social factors, social issues, social barriers, social care, nonmedical needs, and extreme needs. (Because there was no clear consensus that emerged from practitioners about alternatives to the term SDH, we default to using the more academic term in this paper.) Specific examples of these determinants included social isolation/social networking, transportation, food, childcare, geography-based access (rural/urban), language and literacy, education/mentoring/tutoring, poverty, jobs or employment, housing, immigration, neighborhood crime or safety, and free community spaces for activities or gardens.

Despite general consistency, there also was some ambiguity in the boundaries between definitions of social, behavioral, and biological health determinants. Two MMCO leaders included mental/behavioral health in describing SDH, though other literature has referred to these as health outcomes.²⁸ Some informants included substance abuse in their definition of SDH.²⁹ One participant included genetics in the definition of SDH. Another informant used health disparities to define SDH rather than framing disparities as an outcome shaped by SDH.³⁰

Several participants situated their definition of SDH within the frame of state Medicaid contract-defined “benefits.” For example, SDH were defined as nonclinical services or “anything that's not a current Medicaid/Medicare benefit.” This description exposes an underlying paradox: even when addressing SDH was perceived as fundamentally connected to organizational mission, it was at the same time defined by activities outside the perceived scope of MMCO provided services.

Financial and other incentives to address SDH

When asked to describe the organizational value of addressing SDH, many responses implicitly evoked the Institute for Healthcare Improvement's “Triple Aim,”^31,32 including improving the health of populations, reducing per capita health care costs, and improving patients' experience of care (both quality and satisfaction). Many informants noted that successfully addressing SDH would lead to improvements in all 3 of these aims, especially for patients with complex medical and social needs.

For instance, many interviewees drew connections between addressing SDH and an organization's ability to influence beneficiaries' health outcomes:

“…if you don't take into account some of these social, behavioral, economic stability, and access to not just care, but food, housing, you know, what kind of crime, environmental conditions, how can you influence their care and be able to show positive outcomes?”

Addressing SDH also was described as financially prudent for MMCOs, reflecting the second Triple Aim. For some MMCOs, this meant that developing SDH programs was seen more as an investment than as a charitable service. As this participant explained: “We don't go into this as if we were making grants. We go into this more as if we were making business investments.” The potential impact of SDH programs on lowering per capita costs was particularly strong when focused on members with higher than average health care services utilization. One MMCO leader reported, “What's driving our high utilizer work is the knowledge that we have to be able to manage the population at lower costs.” This theme echoed across multiple interviews.

Addressing SDH also was seen by several interviewees as fundamental to patient engagement, satisfaction, and care experience, all relevant to the third Triple Aim. The leader of one single-state MMCO explicitly linked addressing members' nonmedical needs with a greater likelihood that members would stay enrolled in that MMCO, noting, “It goes to the consumer satisfaction [and] low voluntary disenrollment… Our consumers know that we care.”

Additional comments suggest that MMCO leaders ultimately view financial, population health, and patient experience incentives to address SDH as intertwined: “So that's good for individuals and it's good for us, because people are taking the right medications and not getting excess medication. They are safer, and they're going to be readmitted to the hospital less frequently, and be happier.”

Translating interest in SDH into client services

Although nearly all participants described a strong organizational commitment to understanding and alleviating their members' SDH, operationalizing these concepts was less straightforward. Participants identified a wide range of activities and approaches when asked to describe MMCO-supported programs aimed at addressing SDH, though many of the SDH programs they described involved fewer than 100 MMCO beneficiaries. Despite the small numbers, most informants expressed hopes to scale up these activities. Three recurrent themes related to the SDH programs described by informants are discussed in the following sections.

Secondary and tertiary prevention strategies

Participants identified predominantly secondary and tertiary prevention approaches³³ to addressing beneficiaries' SDH. These programs were not aimed at general populations, but instead were aimed at populations with specific illnesses (eg, asthma, diabetes) or health care utilization rates. Specific examples include programs providing food vouchers and education on healthy eating to patients at risk for developing diabetes, paying for pest control in the homes of children with severe asthma, providing recuperative care units for homeless patients to “recover from their inpatient discharge,” and most frequently, screening and assisting high-risk patients and high utilizers with unmet social needs, such as housing, food, transportation, and unemployment.

MMCO informants reported leveraging case management or care coordination services, which were required for specific populations under many state contracts, to support these largely secondary and tertiary prevention strategies. In several instances, MMCO leaders described broadening case management programs originally focused on medical care coordination or management (eg, medication assistance, medical specialist appointments, behavioral interventions) to gradually include more social care coordination. This has enabled MMCOs to use existing case management dollars to provide social services to at-risk or other targeted populations such as patients with diabetes or pregnant women.

Community partnerships

MMCO informants stressed the importance of community partners for SDH intervention activities. Acknowledging the expertise of community-based nonprofit and governmental agencies, leaders sought to improve access to these community-based services and to avoid duplicating their efforts. As one informant noted, “We really don't want to reinvent the wheel in any way.”

MMCOs sometimes partnered with community agencies to facilitate service access as a core part of clinical service operations for members, such as case management for homeless patients or delivery of diabetic food boxes to members with diabetes. In other examples, the MMCO conducted an assessment of members' social needs but referred enrollees to community partners for services outside of strictly clinical services. For many MMCOs, these partnerships were the backbone of serving the social needs of their members.

Food and housing insecurity

Although MMCO leaders reported programs aimed at a relatively diverse array of SDH, including homelessness and unstable housing, food insecurity, social isolation, lack of transportation, and economic instability, the majority of the interventions they described focused on housing instability and food insecurity. MMCO leaders discussed the importance and impact of addressing unmet housing and food needs both in terms of improving members' health and reducing costs.

“And a lot of times, the first step is getting them the basic needs, you know, food, housing… Because the last thing someone is thinking about when they're living in [poor] conditions…is going to get a mammogram or colorectal exam.”

The focus on food and housing was particularly notable when juxtaposed with the wider array of social needs leaders used to define SDH. In contrast to other SDH, food and housing may be perceived as more immediately actionable, which is a key criterion used to weigh the appropriateness of screening initiatives in clinical settings.^34
–36 The emphasis on food and housing also may reflect a belief or assumption among MMCO leaders that these SDH are more likely to generate a more rapid return on investment for health care delivery systems hoping to impact the bottom line within budget and contract cycles.

“And if someone has no housing stability, then you end up in situations where the compliance is very low, and everything ends up being episodic… It's disruptive to the member… It's the most expensive way to deliver service. So these programs that connect with the social aspect of somebody's wellness are exactly what we should be doing.”

Internal and external challenges

Informants identified 2 core challenges to developing programs to address their members' SDH. These included barriers to organizational transformation and program funding.

Leadership and delivery system change

For many participants, addressing SDH was not simply a matter of providing a new array of member services; addressing members' nonclinical needs required significant changes to the underlying MMCO model, demanding substantial reorganization and retraining to balance the risks and benefits of addressing SDH. Tackling SDH forced MMCOs to “rethink all of [their] processes and policies” and to “change the mind-set” of MMCO staff, who previously were encouraged to prioritize efficiency over depth of member engagement.

A care model incorporating SDH not only demanded MMCO reorganization, it also implied changes in the traditional health insurance risk dynamic. Concerns about legal and financial liability informed decisions about whether an MMCO would position itself as a direct provider of SDH-related services or as a financer for community agencies working outside the health care system to alleviate the nonmedical health challenges facing low-income populations. As one participant described:

“Because the more that the health plan becomes seen as the solution, or the provider rather than the financer, it changes the perception of the way people look at you…honestly, it changes the risk that we take on. So it's not just funding it at that point in time. We accept liability for events that happen within the building.”

State Medicaid contracts and the “unfunded mandate”

Study participants repeatedly mentioned funding as the most significant barrier to addressing members' SDH. The primary source of MMCO funding is the federal Centers for Medicare & Medicaid Services (CMS) by way of contracts administered at the state level. Each state's Medicaid agency determines the specific terms of its contracts with MMCOs. Not surprisingly, state governments were more frequently mentioned as important influences on MMCOs' ability to address SDH than was the federal government.

Most participants described state contracts and payment mechanisms as rooted in a “traditional health care delivery paradigm,” in which Medicaid exclusively covers core health services associated with clinical care. As a result, MMCOs do not have a designated funding stream dedicated to SDH services. All leaders reported using administrative budget surpluses to fund SDH programs and only funding social interventions with existing clinical service programs in rare instances. Some expressed concern that although cost savings may accrue as a result of providing SDH services (by way of reduced health care utilization among members), this could reduce the MMCO's overall rate determination over time because most SDH expenses are not counted toward medical costs. Smaller MMCOs that focused on Medicaid reported more concerns about future rate reductions because they operate closer to the financial margin. The lack of a reliable source of funding to support social interventions was perceived as a double bind:

“We're only paid to pay for physician, hospital, and pharmacy care. But, we know that the way to improved health and to ultimately our financial sustainability is to spend money on other things. So, how do we do that?”

Participants noted that state contracts exert some positive influence on MMCOs' ability to address SDH, but that state-level barriers to meaningful activities related to SDH are more common. Contractual barriers and enablers were highly state-specific. As the president of a small, East Coast MMCO explained, “We have made assumptions…that [Medicaid] services are pretty comparable and pretty consistently defined and I don't think that's the case at all. I think they vary dramatically by state.” At one end of the spectrum, state Medicaid agencies' reimbursement policies were described as actively thwarting MMCOs' efforts to provide important SDH-related services to their members.

“The state is in no way supportive of what we do. Just to be really blunt about it, they make it difficult… They're more restrictive in terms of what they will allow us to include on our financial statistical report…”

In other states, state Medicaid agencies have attempted to support MMCOs' efforts to address SDH as part of health care delivery. In these places, this paradigm shift occasionally has led to new, SDH-related requirements and flexibility in state Medicaid contracts. Some participants expressed approval for these types of requirements, stating that they encourage MMCOs to consider and begin to address their members' SDH. For example, one MMCO leader wanted his state to designate housing as “a medication or as a medical intervention” so that federal funds could be used to mitigate the health risks associated with homelessness through direct funding of housing programs.

Other participants were more circumspect about moving SDH programs that address social needs directly into the health system by designating them as medical services. Concerns revolved primarily around the financial implications, particularly that these requirements could turn into unfunded mandates. “Virtually all state programs create [SDH-related] expectations larger than their ability to fund,” explained the president of a network MMCO operating in 2 states. Such expectations are often embedded in standardized services that MMCOs are required to provide to all of their members. When states “bake in requirements that they know are unattainable,” they set up a Catch-22–type scenario for MMCOs, which can lead to frustration and lack of motivation to address SDH. As such, funding flexibility around social interventions was a common recommendation from the informants to state Medicaid offices.

Study limitations

It is possible that the study's small sample size and composition limit the generalizability of the findings. The sample was compiled based on recommendations from the NAC and efforts were made to include MMCOs with considerable geographic, size, and structural diversity. Of the 16 MMCOs, only 2 were for-profit plans. The authors believe this is appropriate because, despite federal expansion efforts to spread Medicaid risk to for-profit organizations, more than half of all MMCO enrollees continue to be enrolled in not-for-profit plans.³⁷ Future work could examine how length of time serving Medicaid populations might impact non–Medicaid exclusive plans' investment decisions. Because some respondents had more responsibility for national versus local programming, it also is possible that individual responses focused more on any one leader's responsibilities (eg, organizational financial strategy versus local member needs). The authors believe this diversity could make the findings more relevant to a broad audience of MMCO stakeholders. Additionally, the sample size and study method do not enable conclusions to be drawn about differences in MMCO SDH activities by state. Given the scarcity of research in this field, the authors hope that these qualitative findings will prompt additional research questions about how MMCOs' work in this area can be evaluated, disseminated, and sustained in different MMCO environments.

Conclusions

In January 2016, CMS announced a $157 million investment in Accountable Health Communities, which will provide health care based social services screening and resource navigation interventions to Medicare and Medicaid beneficiaries.³⁸ The new federal funding requires grantees to increase these services based on emerging literature suggesting that they might help to achieve the health care Triple Aim of improved population health, improved patient experience, and reduced per capita health care costs.^11,39 The present study's findings suggest that Medicaid managed care leaders are already making similar investments in beneficiaries' SDH but are grappling with organizational and financial challenges required for sustainability and scaling. The CMS demonstration pilots offer a temporary funding influx to decrease barriers for health care systems interested in this work; longer term change will require understanding and addressing the organizational and financial challenges that will reemerge as this funding source dissipates.

The corporate informants in this study suggested that Medicaid payment systems are conceptually an appropriate fit for SDH-related service delivery. Often driven by a longstanding and deeply ingrained mission to improve outcomes for low-income Americans, the MMCO leaders interviewed universally expressed awareness of the increasing relevance of SDH for their work. Though the definition of SDH was not uniform across participants, every Medicaid managed care executive in this study described a belief that SDH interventions globally influence business performance measures, from improving members' health outcomes and experience of care to potentially lowering per capita costs and improving member recruitment and retention. Moving forward, a common glossary for SDH and SDH interventions will facilitate strategic planning in this field.

Consistent with the nascent literature⁴⁰ in this field, many MMCO leaders described being in the early stages of innovation and experimentation related to MMCO-supported SDH interventions. Simultaneously, the study informants expressed some ambivalence about undertaking or scaling these activities. The gap between awareness and practice was linked to both internal and external factors. Internal factors involving leadership and staff organization are likely to be more easily overcome with clearer external support for investments in SDH. The majority of informants noted that state Medicaid agencies and contract regulations impacted MMCO flexibility and innovation.⁴¹ The lack of clear regulatory guidance and state support exacerbated internal organizational challenges and amplified the perception of financial risk. As a result, with rare exceptions, MMCO executives did not articulate clear strategies for long-term funding, nor for measuring the impact of SDH-targeted programs. Ideally, the new CMS demonstration projects and other initiatives that clarify and expand funding mechanisms to support MMCO SDH activities⁴² will enable MMCOs and other delivery system stakeholders to better calculate the return on MMCOs' initial investments. More long-term SDH intervention funding will require combining lessons from the new CMS demonstration projects with the experiences MMCOs already have doing this work.

Footnotes

Author Disclosure Statement

Drs. Gottlieb, Ackerman, and Manchanda and Ms. Wing declared no conflicts of interest with respect to the research, authorship, and/or publication of this article. The authors received the following financial support: Funding for this study was provided by the Commonwealth Fund.

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