The United States spends more on health care than any other nation in the world—more than double the amount that some industrialized countries do—yet our health outcomes are comparatively horrible. We live with higher incidence of chronic illness, we face many more financial barriers to care, and we die younger than people in just about every industrialized nation in the world. Since 2004, the Commonwealth Fund has ranked the health system performance of at least five industrialized countries. It expanded that work to eleven countries in 2014. The result: the United States has consistently come in last.

Although there are numerous reasons for our poor performance, work by Yale’s Elizabeth Bradley and colleagues calls attention to one possible explanation meriting special consideration: our high health care spending far outpaces very low rates of investment in social services, such as nutritional assistance, housing supports, or income assistance. Might we get a better return on our investment in the health of Americans if we integrated medical and nonmedical services and shifted some of the investment from health care to social services instead?

A report supported by Blue Cross Blue Shield of Massachusetts Foundation shows there is solid evidence that increased investment in selected social services, and improved coordination between medical and nonmedical services, can improve health outcomes and lower health care costs for certain populations. Investment in three social services in particular is associated with improvements in health and in cost savings: housing support, nutritional assistance, and case management. The evidence suggests that targeting people in greatest need of social services—low-income individuals or families, the elderly, the disabled—is critical to yield the benefits from the partnership between medical and nonmedical services.

Dramatic changes in health care have propelled social service integration to the forefront of health policy and care delivery transformation discussions. The Affordable Care Act has expanded health insurance to millions of low- and modest-income Americans, many of whom have social, environmental, and behavioral concerns that often define their health. Additionally, the spread of alternative payment models—accountable care organizations (ACOs), bundled payments, components of the Medicare Access and CHIP Reauthorization Act (MACRA)—increasingly hold health care providers financially accountable for patients’ health and the cost of treatment. As a result of these trends, health care providers are keenly interested in exploring ways to integrate health and social services. For the first time, linking medical and nonmedical services can help providers meet their bottom line—it is no longer just an act of charity.

In light of these opportunities—the emerging evidence, evolving financial incentives, and lingering operational questions from health systems—the Commonwealth Fund has initiated an investment in projects to produce information that will help health care payers and providers connect medical and nonmedical interventions to reinforce their organization’s financial and quality of care goals. As we are on the staff of a health care and health policy foundation, this is new terrain for us.

The Commonwealth Fund’s Health Care Delivery System Reform program has outlined the following criteria to help guide our selection of projects to fund: (1) those having results that support the mission of health care organizations, providers, and payers; (2) those run by risk-bearing organizations, since they are more likely to have a financial interest in nonmedical interventions; and (3) those that will accrue benefit to the health care sector in the near term (for example, within five years). By appealing to providers’ and payers’ vested interests, our approach seeks to inspire these groups to think more expansively about health to include patients’ social needs.

Since April 2014, the Commonwealth Fund has awarded $2.72 million in support of thirteen projects that examine ways to promote integration of health and social services. A number of projects aim to document patients’ social service needs and describe the value of investment in meeting those needs by payers and health systems. Funded by the Commonwealth Fund, the Skoll Foundation, and the Pershing Square Foundation, a report by Deborah Bachrach and coauthors of Manatt Health Solutions outlined financial and nonfinancial benefits of relevant interventions, ranging from helping providers meet shared savings targets to increasing patient and provider satisfaction or patient loyalty. Rebecca Onie of Health Leads is facilitating a coalition of fifteen health system leaders to draft principles and practical guidance to assist providers, policy makers, and others to address social needs in health care settings.

Most payers and providers lack clarity about what role health care systems should play to address patients’ nonmedical needs. Thus, identification of effective approaches can provide much-needed guidance. A recent review by Laura M. Gottlieb of the University of California San Francisco and coauthors identified twenty-five interventions that address social determinants of health in Medicaid managed care. The results show that most efforts focus on high-need, chronically ill patients, and too few have evaluation results that assess impact. For the elderly and disabled populations, the Long-Term Quality Alliance, with support from five foundations (Gary and Mary West Foundation, The John A. Hartford Foundation, Aetna Foundation, the SCAN Foundation, and the Commonwealth Fund), is conducting a series of case studies, from exemplar health plans, about integration of long-term services and supports.

Much work is needed to understand the payment, policy, and regulatory options to support integration of medical and nonmedical services. Center for Health Care Strategies has published two briefs on state payment and financing models to support social services and another on early lessons of nonmedical service integration in Medicaid ACOs. In partnership with the SCAN Foundation, the Commonwealth Fund is supporting the Bipartisan Policy Center to identify legal, policy, and fiscal barriers—including perceived obstacles—to coverage of nonclinical services by a range of delivery and reimbursement models, and then developing and modeling policy options to overcome those barriers.

This strategy of nonmedical service integration carries considerable risk. When it comes to increasing people’s access to social services, a health care-focused approach may prove to be the wrong one. The US health care sector is a notoriously inefficient payer, as indicated by an analysis of physician fees in six countries conducted by Miriam Laugesen and Sherry Glied of New York University. Goods and services also tend to get more expensive when they are medicalized in the United States, so it is not unreasonable to fear that a food subsidy or housing service provided by an ACO or a health insurer could end up being significantly more expensive than the same service delivered through funding from the US Department of Agriculture or the US Department of Housing and Urban Development.

However, given the current political climate, policy makers are unlikely to make substantial new budgetary commitments to social services. Therefore, facilitating investments in social services by private health systems and health plans may be the best available approach at this time. One advantage is that health systems and providers are better positioned to tailor services to the people who need them, whereas changes in broad entitlements may be too blunt an instrument and result in imprecise targeting.

Few people in health care question the role that social needs play in one’s health. What’s new is the growing interest, momentum, and possibility of putting this understanding into practice for providers because of expansions in insurance coverage and shifts toward value-based payment.

What’s needed is more information on how to do it well. Time, trial and error, and evaluation will tell us if integration of medical and social services in health care settings yields the intended results: better care, improved patient experience, and reduction in health care spending.

We gratefully acknowledge research assistance provided by Cornelia Hall and Dana Sarnak for this blog post.

Editor’s Note:

Related reading:

“Addressing The Root Causes Of Health Problems: Rebecca Onie Of Health Leads,” by Lee-Lee Prina, GrantWatch section of Health Affairs Blog, March 22, 2013.