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The case for investing in social services

The case for investing in social services

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Investing in social services as a core strategy for healthcare organizations: developing the business case

By: Tanya Shah, Commonwealth Fund, and Eveline van Beek, KPMG in the US

Tanya Shah from the Commonwealth Fund and KPMG's Eveline van Beek, talk to KPMG Global Healthcare about their recent report on how investments in social services can give healthcare organizations reduced costs and a measurable return on investment.

Why did the Commonwealth Fund “The Fund” and KPMG do this work together?

The Commonwealth Fund has a mission to improve healthcare and make it affordable and accessible for all Americans. We facilitate a broad portfolio of work with a particular focus on supporting improvements to the system for vulnerable populations - people with low incomes and socioeconomic disadvantages that have a greater difficulty obtaining health care, receive lower-quality care, and experience poorer health outcomes. Research has shown that a large portion of the vulnerable populations have complex care needs, exacerbated by non-medical issues like lack of adequate housing, poor nutrition, social isolation and lack of transport.

With payment models in healthcare changing and moving more towards value-based reimbursement strategies, it would seem natural for healthcare to start focusing more on social determinants of health (SDOH) in order to better manage population health outcomes and cost. At this point, however, we weren't seeing a high prevalence of innovation or cross-pollination between health and social care services in the market place.

We engaged KPMG to help us better understand the landscape of social service investments in the healthcare space, identify the key barriers to scaling those investments and put together a guidance document for healthcare and other providers grappling with the SDOH.

What are the main findings of your report?

Over the course of a full year (August 2016 - September 2017), we drew from insights obtained through literature reviews, interviews and discussion forums with healthcare payers and provider groups to come to a set of six key insights of the report:

  1. There is wide recognition in the US marketplace of the necessity to invest more in social determinants of health to bring down cost and improve outcomes. While an expected outcome, it was good to note that all respondents in our surveys acknowledged the need to bridge the medical-social divide.
  2. Despite this, healthcare organizations rarely consider their investment in a social service as a real business strategy and a part of their business model. It's “the right thing to do”, which leaves investments vulnerable and often temporary.
  3. Language matters. What is considered an investment often gets confusing in practice. There are three archetype models of investment - coordination, stimulation and ownership - which we found during the research and, depending on which model is deployed, the approach to the business case is going to be very different.
  4. Contrary to general assumptions, investments in social services can yield a return on investment (ROI) in a short period of time (12 - 18 months). This was one of the larger myth busters that we uncovered during our research since it was often mentioned by our respondents that they wanted to invest in social services, but just couldn't justify spending the money given the perceived long ROI horizons. Our report outlines three business cases in detail in the Appendix - Health Plan of San Matteo, Molina Healthcare and WellCare - that prove that returns within a year are possible.
  5. Many business cases typically include the `wrong' costs and returns when trying to prove a business case (often retroactively). We found very few examples of healthcare organizations setting out to prepare a business case ahead of the investment with the ultimate goal to integrate the practice into their ongoing operations. As a result, it was often hard to prove a business case given the lack of correct data collection and measurements that had been thought through up front to prove the case.
  6. There is a lack of consistent and standardized data collection and data sharing between healthcare and social service organizations. Often, healthcare organizations will demand levels of data exchange sophistication beyond the current abilities of the social service providers. Healthcare organizations that are willing to spend time to build up data exchange capabilities with their social service counterparts - starting small and working up to higher levels of sophistication - will likely be able to set up more solid and strong business cases in the long run.

What is the impact of the payment models changing?

The switch from fee-for-service payment models to more value-based models presents an opportunity for the healthcare market to expand into new social service investment models. Under a fee-for-service model, it may actually be financially advantageous for a hospital to periodically see the same patient in their emergency department (ED), even if the utilization is not medically driven but rather driven by the fact that they have no place dry and warm to sleep at night. Under a value-based arrangement that penalizes a health system for avoidable hospital use, it makes more financial sense for the hospital to prevent recurring ED visits by better connecting this individual to the appropriate social services.

What resources does your research provide to healthcare and social service organizations to help them strengthen the social service investment business case?

Firstly, our report provides readers with a model for how to go about choosing an appropriate investment approach and building out a workable business case to track and measure ROI. Second, the Fund's website hosts a series of tools to help both healthcare and social service organizations support their business case approach. One of the tools is an online ROI calculator for partnerships to address social determinants of health. Lastly, one of the first actions that we urge healthcare and social service providers to consider is to start engaging more directly in dialogue with each other. Even something as simple as attending a conference that normally only hosts one type of party can be a good place to start. Healthcare organizations are open to trying out social service investments but often struggle to find the right partners to start. Social service organizations that actively raise their hands and seek out the dialogue will have a much larger chance of being included in new models than those that do not.

The full report can be accessed below and here - Investing in social services as a core strategy for healthcare organizations. For any questions or for more information, please contact Eveline van Beek.

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