Live Webinar | Social Determinants of Health
The Tax Cuts and Jobs Act of 2017 offers tax benefits to taxpayers reinvesting capital gains in special funds aimed at lifting low-income communities. The program has significant implications for groups addressing the social determinants of...
Save
News | Social Determinants of Health

Kaiser ramps up SDOH spending, but a demonstrable ROI is likely ‘years’ away

News | Social Determinants of Health

Kaiser ramps up SDOH spending, but a demonstrable ROI is likely ‘years’ away

  • Kaiser Permanente is focusing its SDOH initiatives on housing, homelessness, food insecurity and social service coordination.
  • Any improvement in outcomes is expected to be years away.
  • Construction contracting practices aim to help bolster local communities.

The nation’s largest private integrated health system is expanding its spending on non-healthcare initiatives that it hopes eventually will lead to improved health among its enrollee and patient populations and in its local communities.

Spending on social determinants of health (SDOH) comprises a growing share of the $2.8 billion in community benefit that Kaiser Permanente provides annually as part of its not-for-profit tax status. However, the health system does not expect to see demonstrable results from these efforts for years, according to an executive.

“It takes a long time to change an individual and their behavior, so you can imagine changing a community is a long-term investment not a short-term investment, so it’s going to take us a little while to see what the full benefits are,” David Grossman, MD, senior investigator and associate medical director for Kaiser Permanente Washington, said in an interview in Washington, D.C., this week.

Grossman said much of the system’s community benefit spending is driven by the community health needs assessment (CHNA) that not-for-profit hospitals and health systems are required to undertake every three years by the Affordable Care Act.

“We’ve always taken that very seriously regardless of us being a community-centered nonprofit,” Grossman said. We “focused not only on the needs of our members but also focused on the needs of the communities we serve because we fully understand that the health of our members is heavily determined by the communities they are living in.”

In addition to using its community needs spending to improve SDOH near its facilities, the health system recently moved to leverage its facility-building process to bolster local economies through the use of local contractors, as well as women- and minority-owned firms.

Focusing on specific SDOH initiatives

Kaiser Permanente selects SDOH initiatives to fund based on “reasonably good evidence, so we don’t have to reinvent the wheel,” Grossman said. It has focused funding on four areas:

  • Addressing food insecurity
  • Providing housing
  • Reducing homelessness
  • Connecting patients with local services

Kaiser Permanente has addressed food insecurity in part through initiatives to increase local enrollment of low-income residents in the food stamps program.

A more ambitious SDOH initiative was the May launch of Thrive Local to connect healthcare and social services providers to address pressing social needs, including housing, food, and food needs. Within three years, the service will be available to all of Kaiser Permanente’s 12.3 million members and the 68 million people in its communities. The goal is for the health system’s providers to help match social needs with services from a network of not-for-profit, public and private organizations.

“We can have great programs out in the community, but it’s the same thing as going to a primary care doctor and a specialist — if you don’t have good methods of coordination, then you can set up all these clinics but the system itself doesn’t work,” Grossman said.

Long time frame before realizing benefits

It’s too early to say how effective any of the health system’s SDOH initiatives have been, Grossman said — and some are only months old. For instance, some of the first affordable housing units funded by the health system were completed only recently, and other planned housing remains under development.

Although the health system is confident that its use of federal advisory guidelines to select and drive forward its community initiatives will produce results, Grossman acknowledged that it likely will be “years” before any quantifiable benefits are known.

Grossman said it is much easier to develop a SDOH strategy than to execute it.

“I believe health system leaders are waking up and recognizing their role in addressing this issue,” he said.

One obstacle to SDOH initiatives at hospitals and health systems in markets with significant needs is financial, said Elizabeth Tung, MD, an instructor at the University of Chicago School of Medicine. Many of those organizations are being penalized by private and public insurers for low quality scores, which redirects funding to suburban hospitals with fewer SDOH challenges to address.

About the Author

Rich Daly, HFMA senior writer/editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Advertisements

Related Articles | Social Determinants of Health

Article | Analytics

HFMA's Digital Annual Conference continues Aug. 12 and Aug. 14 with more virtual education for healthcare finance professionals

HFMA's Digital Annual Conference continues Aug. 12 and Aug. 14 with a focus on optimizing performance with the latest KPIs, using analytics strategies to lower cost and maximize revenue and using behavioral economics to engage patients.

Column | Financial Leadership

How leaders should respond to social justice issues for the benefit of their employees and organization

In response to the ongoing social justice movement, leaders should thoroughly examine their organizations’ systems and policies.

News | Coronavirus

110,000 Medicare beneficiaries were hospitalized for COVID-19 by mid-May

By mid-May, hospitals had treated 110,000 Medicare beneficiaries for COVID-19.

Blog | Community Benefit

Strong financial leadership is likely key to the success of accountable communities for health

HFMA's Katie Gilfillan says strong financial leadership is required to manage and source the complex funding and ensure the long-term financial sustainability of accountable communities for health.