Treat Social Needs Like Patient Care: Health Industry Group CEO

Health insurers should be allowed to change how they account for their spending on customers’ social needs so that it counts as patient care, the head of a major health insurance trade association said Tuesday.

Currently these expenses are treated as administrative costs under regulations that require insurers to spend at least 80% of premiums on medical claims or quality improvements. The requirement applies to individual market plans like Obamacare, as well as private Medicare and Medicaid plans.

Treating coverage of transportation to doctor visits or access to healthy food as quality improvements would mean insurers could spend more money on patients. That, in turn, could lead them to eventually charge higher premiums, which the government subsidizes.

Insurers in recent years have increasingly devoted resources to helping patients address needs that aren’t strictly related to medical care, known as social determinants of health, Matt Eyles, president and chief executive officer of America’s Health Insurance Plans, said at a conference in Washington.

Eyles said treating social needs coverage as quality improvement “would allow for greater measurement over time to understand how we might we might be impacting cost trends.”

Collaboration Needed

The need for social and economic supports in the the U.S. “has grown dramatically over the past several years,” Sheila Shapiro, senior vice president of national strategic partnerships for UnitedHealthcare, said at the conference.

“There’s significant money within the entire ecosystem to change the model of health care,” including social needs that go beyond traditional health insurance benefits, she said.

The U.S. spends less than most other countries on social needs, Shapiro said. The United Kingdom spends $3 on social programs for every $1 it spends on health care, while the U.S. spends $1 on social needs for every $3 it spends on health care, she said.

Collaboration between insurers and other groups, such as government agencies and community groups, will be “where we’re going to come up with solutions,” Shapiro said.

Spending on social needs by health plans and some employers that cover workers’ health care is “in its infancy, and everyone is trying to understand what the best model might look like,” Shapiro said.

Impact on Health Costs

But it isn’t clear that such spending translates into lower health-care costs.

A study published in December in the Journal of the American Medical Association tracked more than 4,000 public housing recipients who received vouchers to move to better neighborhoods over about 11 years. It found no significant difference in hospitalization rates, hospital days, or annual health-care spending.

The New England Journal of Medicine Jan. 9 published a report that found hospital readmission rates weren’t lower among 800 patients who enrolled in a program to link them with social services.

But Eyles said insurers should be allowed to experiment. Health plans are uniquely positioned to address social needs because they are “one of the few entities within the health-care ecosystem that really does touch every single other stakeholder.”

But, Eyles added, “I don’t think we can ask the government to just pay more” for insurers’ social spending. It’s really around thinking more innovatively around different funding streams that are out there and how can we leverage them more effectively.”