The Evolving Model of Value-Based Care Payments for SDoH Improvement


While the growing social determinants of health (SDoH) movement in the U.S. has the attention of social workers and medical providers alike, payment models in support of such reinvented care have evolved in starts and stops. But there is progress to deliver on the promise of the SDoH healthcare delivery model.

Social workers know from experience the most direct route to improving a client’s health is often through the dinner plate and the living room. Social determinants of health (SDoH) – those factors ranging from food and housing scarcity to domestic violence and loneliness – can account for up to 80 percent of influencers on a person’s good health. As healthcare value-based contracts (VBC) continue to come online, medical clinicians are looking towards their social service colleagues for help.

VBCs pay clinicians and health systems for the overall good health and well-being, rather than for services rendered when a patient is sick. VBC contracting aligns the interest of the patient/client, medical providers, and social services providers. From 2012 to 2017, the VBC model increased from 10.9% to 53% in 2017. But it has not been a smooth transition.

The Challenge of VBC SDoH

Recent findings speak to the barriers of transforming healthcare delivery from the long-standing fee-for-service to an SDoH VBC model. Although 53 percent of payments from commercial payers to doctors and hospitals are under VBC/SDoH arrangements, most of that reimbursement is still based on the old fee-for-service model, according to a nonprofit report based on the National Scorecard on Payment Reform. Fee-for-service emphasis services over total wellness and well-being, or volume of care over outcomes of care. The report found that only about 5.7% of payments are based on true VBC models, which has been steady since 2012.

A February 2020 study published in Health Affairs found that Accountable Care Organizations (ACOs), which were early adopters of addressing the SDoH component of healthcare delivery, are still working to gain traction. The study looked at qualitative data from 22 ACOs of physician groups, safety-net providers, and hospitals that integrated social services. Among the findings:

1: Difficulty developing social service partnerships: While healthcare providers often have relatively robust relationships with or knowledge of other local providers, they are less familiar with social service providers. In the U.S. context, this is likely the result of separate funding streams and the provision of social services and medical care. When referrals do occur, it’s most often based on personal relationships instead of organizational relationships.

2: A lack of fiscal support: Despite growing evidence that social service investments are associated with better physical health outcomes and reductions in health disparities, financial investments remain inadequate. Related research suggests that instead of evaluating SDoH investments in traditional return-on-investment (ROI) models, such investments should be viewed as a public good better suited to a collaborative approach for financing.

The Opportunity of VBC SDoH

When done true to the VBC/SDoH model, healthcare delivery costs savings can be achieved.  A 2019 study published in The New England Journal of Medicine found that in a Blue Cross Blue Shield Massachusetts “alternative care contract” from 2009-2018, the payer spent $491 less per patient than patients not in the plan.

“While adoption rates are still relatively low in some regions of the country, almost all health plans and providers are doing work in this space and the percentage of spending in the value-based care space will continue to increase,” commercial and government health insurance executive Brian Donovan recently said in an interview with

“I can see it approaching maybe 50 percent for most health plans within the next five years if we consider their entire book of business.”

Intermountain Healthcare in Utah is betting big on a VBC/SDoH approach. The health system is reinventing itself to deliver care based on the “health and well-being of their patients, rather than services delivered,” according to Marc Harrison, President & CEO. In citing several vital factors in reinventing healthcare delivery, he calls out addressing SDoH as one of five key strategies. In a 2019 article in the Harvard Business Review, he wrote:

We must work with the public to confront the social determinants of health. Much of health is influenced by preventable conditions like obesity, poor nutrition, smoking, lack of exercise, inadequate housing, lack of education, and access to transportation or technology. We must engage the public in changing lifestyle behaviors and living environments and assist them in achieving that goal.”

Social Service Providers Are a Key Asset

In 2018, Social Work in Health Care dedicated an entire issue to the proposition to the “added-value of social workers on health care teams and the resulting improved outcomes for patients, families, and communities.”

The authors note that social worker expertise spans across the healthcare population to include children, adolescents, and adults and medical conditions rooted in mental/behavioral health and physical health. Also, social workers function as care coordinators critical for people with chronic conditions who drive some of the highest costs  in public health medicine. The authors concluded that in their “core values” as patient advocates, social workers are uniquely qualified to lead in a VBC/SDoH healthcare delivery world.

“Increased attention to the organizational and system factors that support integrated models is urgently needed to support social workers in their rapidly emerging and expanding roles on integrated care teams,” wrote the authors.


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