• Alyse DiNapoli

Social Service Investment May Offer More Solutions to Healthier Citizens

Updated: Jul 29, 2019

Despite impressive efforts to repeal the Affordable Care Act (ACA) during the Trump administration, the US has managed to keep most of it in tact.  With the recent approval of Medicaid work requirement waivers, however, it is starting to worry universal healthcare proponents that these waivers-previously unauthorized under the Obama administration- are the first step towards cutting Medicaid and slowing chipping away at ACA. While there is certainly cause for concern from a moral standpoint, on a broader level, merely tinkering with the amount of funding in traditional healthcare systems may only be a fraction of the issue. To ensure proper health for all, the solution may in fact be a lot more complex.

It’s common knowledge that the US pays more for healthcare and doesn’t have better health outcomes. In 2014, the US spent 17.2% of GDP on healthcare expenditures, more than any other OECD nation. Out of these countries, the US also had one of the highest poverty rates in 2014, which means that even for the high percentage who make too much to qualify for Medicaid in their state, rising premiums make affording health care more and more difficult.  OECD countries with the lowest poverty rates in  2014 included Denmark, Czech Republic, Finland, Iceland and Netherlands. All 5 of these countries also rank higher than the US in infant mortality, life expectancy, diabetes and obesity in 2014 (with the exception of Czech Republic, which had a lower life expectancy than the US in 2014) while still spending less on healthcare than the US.

There has been extensive research on the correlation between investment in select social services and improved public health. In a 2015 study conducted by Yale researchers, the authors cite multiple studies that solidify the connection between social factors and health. The challenge, they say, is how to turn these conclusions into actionable results for companies, such as healthcare payers. Among 32 studies they reviewed that yielded positive health outcomes from social services, 31% were related to housing support,  25% to care coordination and community outreach programs, 22% to nutritional support, 13% to income support, and  9% to other types of interventions. 33% of the housing support case studies resulted in both reduced costs and positive outcomes.

Housing and health is a pretty intuitive correlation. After all, it’s easy to see how people who don’t have a safe, reliable roof over their heads are less likely to prioritize going to the doctor or invest in healthy diets and exercise. Not surprisingly, there are ample studies that show that unstable housing increases the risk for contracting HIV/AIDS, and that premature mortality rates are often much higher among the homeless. In a detailed Brookings Institute article on health and housing, the author highlights a Rand Corporation study affirming the correlation between social spending on housing and longer life expectancy and infant mortality. The article also mentions that in comparison to other OECD countries, the US generally spends less on housing services.

Fortunately, some organizations are already paying attention to the data. Health Plan of San Mateo, a nonprofit healthcare plan in Northern California, initiated the Community Care Settings Pilot to target members in need of housing support.  HPSM coordinated with 2 local nonprofits specializing in affordable housing and case management, in addition to paying for part of the services. After members’ appropriate transitions, HPSM analyzed the 91 participating individuals’ total cost of claims 6 months prior to transition and 6 months post-transition, and the average costs of care per member in the program dropped from $10,055 to $5,721 a month post-intervention.

According to the article , “The drop in institutional costs proved more than enough to offset the increase in costs of the resulting residential care, LTSS [long-term services and support] and case management per member.” All in all, there was a net savings of $1.4 million ($2.4m in savings with $1m in start up costs). In addition to the qualitative data, 85% of participants responded that CCSP maintained or improved their quality of life, and 90% responded that they would recommend  the service to family or friends.

In other words, the debate around healthcare simply in terms of cuts or expansion may be far too simplistic. While the federal healthcare debate gets attention for hitting an ideological nerve more than anything else, it’s quite possible that state and local governments may have more opportunities to improve their constituents’ health without necessarily demanding more subsidies or traditional medical funding.  Re-thinking the design of social systems may save us more money-and lives- than we give it credit for.

Sources (in order of appearance)

Health Care Spending as Percentage of GDP. International Healthcare System Profiles (source: OECD 2016). Commonwealth Fund.

Income Distribution & Poverty Poverty rate (data chart). Organization for Economic Co-operation & Development (OECD Data).

Life expectancy at birth (chart). Organization for Economic Co-operation & Development (OECD Data).

Infant Mortality Rates. Organization for Economic Co-operation & Development (OECD Data).

"Transforming Fact into Strategy – Developing a Public Health Response to the Housing Needs of Persons Living With and At Risk of HIV/AIDS". Policy Paper from the Second National Housing and HIV/AIDS Research Summit. The National AIDS Housing Coalition.

"Premature Mortality in Homeless Populations: A Review of the Literature". National Healthcare for the Homeless Council. December 2005.

"Re-balancing medical and social spending to promote health: Increasing state flexibility to improve health through housing". Brookings Institute. February 15, 2017.

"Investing in Social Services as a Core Strategy for Healthcare Organizations: Developing the Business Case". KPMG Government Institute. March 2018.

Health at a Glance 2017: OECD Indicators. Chapter 3: Share of Adults with Diabetes, 2015 (source: IDF Atlas, 7th Edition, 2015). Organization for Economic Co-operation & Development (OECD Library).

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