SDoH: 4 tools payers can use to improve patient outcomes
Patient Logistics

SDoH: 4 Tools Payers can Use to Improve Patient Outcomes

March 17, 2021
Karen Stockdale, RN, BSN, MBA

CMS has recently issued a roadmap for states to address social determinants of health – with the intent to improve outcomes, lower healthcare costs, and support already-in-place value-based care strategies. (1)  As a side effect of the pandemic, the healthcare community has a renewed interest in population health and how social factors work together to create the health landscape in the US. Population health and SDoH are closely intertwined and may hold the keys to unlocking a healthier future for Americans, so it’s crucial for payers to also understand how to address health disparities and create innovations that address SDoH.

The CMS roadmap reiterates the fact that the US spends more on healthcare than any other country yet continues to underperform on health indicators like life expectancy, heart disease, and maternal and infant mortality rates.  This trend of high spending and unfavorable results has motivated value-based care, and now encourages the medical community to incorporate and adopt measures to reduce health disparities resulting from SDoH.  

SDoH Defined

Clinicians have long realized that discrepancies in social situations, economic standing, education, and other factors can lead to poorer health outcomes. However, only in recent times has the medical community put a name to this phenomenon – the Social Determinants of Health, commonly abbreviated SDoH.  CMS defines SDoH as the:

Conditions in the places where people live, learn, work, and play that affect a wide range of health risks and outcomes.” (2)

This short and broad definition belies the complexity of SDoH. Many layers of causative factors exist – both culturally and socially.  There is no “quick fix” to provide health equality, however the more that the healthcare industry understands SDoH, the better it can treat patients with the individualized care that is needed.  

The Healthy People 2030 initiative has broken down the SDoH into five domains. (3) These domains are not independent of each other; they are interwoven in the fabric of society everywhere.  Therefore, it is difficult to determine which came first, or how one affects the other.  Nevertheless, it is good to understand these five areas and how they impact health outcomes. Recognizing the disparities in our society and how those influence a wide range of health indicators, functioning, and quality-of-life is the first step towards improvement.  

The Five Healthy People 2030 Domains of SDoH:

  1. Economic Stability – 1 in 10 people in the United States live in poverty, meaning that they often can’t afford healthy foods, health care, and stable housing.  
  2. Education Access and Quality – statistically, people with higher levels of education are more likely to live longer.  Opportunity to attend good schools and to obtain better jobs is linked to long-term health outcomes.
  3. Health Care Access and Quality – About 1 in 10 people in America do not have health insurance and are less likely to have a primary care provider.  They likely can’t afford the services and medications needed and do not get regular preventative screenings.  All of this contributes to a reliance on emergency care and late intervention.
  4. Neighborhood and Built Environment – High rates of violence, unsafe air or water, and other risks are harmful to health.  Lack of safe places for children to play, lack of bike lanes and walking trails, and lack of green spaces are related to poorer health.  
  5. Social and Community Context – When factors beyond a person’s control like unsafe neighborhoods, discrimination, gang activity, poverty, and fewer educational and career opportunities exist, community resources can often bridge an important gap.  A higher level of community involvement to provide support can help mitigate health impacts.

At first glance it may appear that healthcare providers and payers should focus primarily on the healthcare access and quality domain (number 3), while leaving the other areas to social agencies and other programs; however, the interconnected nature of SDoH needs a more integrated solution.  Healthcare resources in communities also provide job opportunities, education, safety, access to related programs.  The web of responsibility is shared, and it is a big one.  

Payment Models and SDoH

In response to CMS's focus on SDoH, new payment models are emerging across the country. (4)  Some examples are North Carolina’s Healthy Opportunities Pilot and the Massachusetts Moving Upstream Investment Program.  These programs tie Value-Based Purchasing (VBP) payments specifically to SDoH quality metrics. Value-Based Purchasing programs reward providers for better patient outcomes, not just volumes of patients seen. These pilot programs provide payment flexibility for components such as social services, nutrition, and community partnerships. (3)

As a strategy to improve health outcomes, and thus reduce costs – payers have every incentive to participate in SDoH improvement initiatives.  The challenge becomes selecting those interventions or programs that are best suited by delivering measurable results, require a lower cost to implement, and result in a good response by plan members.  When measuring ROI on SDoH programs, benefits are typically calculated on an annual basis, like other metrics.  Many SDoH programs are built for the long haul – and may not show returns on a short timeline.  Thus, several payers choose to select a mixture of short-term and long-term SDoH interventions to provide a better balance of results.  

The SDoH Toolbox

Many states currently have SDoH programs in pilot phases: payers can look to these tools and programs in order to model their own programs.  When a payer system is evaluating the best way forward with its own operations, research shows that four implementation tools should be used. (5)

Implementation Tool 1:  Data Collection and Sharing

Payers should identify and use one of the existing standardized SDoH screening tools and maintain a robust analytics program and data exchange.  Data exchange can be a challenge – health and social services programs often are governed by different privacy laws and don’t interface well.  Overcoming interoperability can help create the most complete picture of the challenges faced by patients and communities.  Before any framework can exist to improve SDoH, health plans must understand the social demographics of plan members.  Gathering the data in a reliable, centralized way is the first step.

Implementation Tool 2: Adjusting VBP for Social Risk Factors

Accurate SDoH data can help payers capture differences in needs according to social risk factors and potentially risk-adjust accordingly.  These numbers can be used to predict more granular costs and outcomes.  Understanding how best to mitigate high-cost claimants, reduce avoidable ER visits, and prevent readmissions and costly hospital stays can be framed differently with SDoH data.  

Payment models historically risk adjust for physical factors – such as age, comorbidities, and a number of hospitalizations.  In short, healthcare providers receive more time and money to treat more medically complex patients.  What about socially complex patients?  SDoH research shows that patients from economically depressed areas with reduced access to care have higher mortalities, higher numbers of repeated ED visits, and generally poorer outcomes.  

Social risk adjustment is controversial, and there are accepted challenges in operationalizing it.  Stratifying measures by SDoH screening data can help identify areas of disparity, giving VBP programs needed information to make future adjustments.  This practice can also inform efforts to address SDoH challenges, even before social risk adjustment occurs.  

Implementation Tool 3:  Building Cross-Sector Partnerships

It is important to realize that providers, payers, and community organizations have the same goals – healthier people.  The strategies and reasons behind that vary somewhat, as well as the perspective.  For maximum success, it is important to develop cross-sector partnerships.  

Strategically, it is often better to form a partnership independent of a specific program or initiative.  The relationship should be in place before services are delivered.  Challenges that may occur include power dynamics, cultures, processes, and industry language.  For example, payers can become involved in community outreach programs like those sponsored by the CDC “Promoting Health Equity” initiative. (6) Payers can provide members more information about these programs to help drive participation.  

Implementation Tool 4:  Creating Organizational Competencies

An upfront investment in staff education, skill-building, and best practices can reap big dividends when new programs and initiatives are rolled out later.  If payer organization staff have a foundation of knowledge to draw from, providing services that are sensitive to SDoH and introducing new performance metrics should be smoother from the beginning.  

Partnering with healthcare organizations to build competencies in SDoH is a great idea and can leverage the experiences and insights of clinicians to add to the body of knowledge.  

As healthcare continues to learn about the disparities that result from SDoH, it is important for all sectors to get accustomed to this approach. Getting used to collecting the data, learning more about SDoH, forming valuable partnerships, and using the data to analyze member outcomes can lay an important foundation.  Armed with this foundation, payers can be poised to enter the next phase of VBP and in the position to impact their member’s lives in a more meaningful way.  Part of VBP has always been treating the whole person, not just a particular ailment, and SDoH initiatives allow organizations to do that more thoroughly, to continue to drive outcomes that help patients, hold healthcare costs down, and improve communities as a whole.  

Want to read more from the Patient Care Logistics Journal? Check out our latest podcast interview with Cris Sierra, VP of ComfortCare Transportation.

CMS Issues New Roadmap for States to Address the Social Determinants of Health to Improve Outcomes, Lower Costs, Support State Value-Based Care Strategies | CMS. (2021). Retrieved 26 February 2021, from

About Social Determinants of Health (SDOH) . (2021). Retrieved 26 February 2021, from

Top 5 Social Determinants of Health Domains for Payers to Address. (2020). Retrieved 26 February 2021, from

Social and Community Context - Healthy People 2030 | (2021). Retrieved 26 February 2021, from

Crook, Hannah L., et. Al. “How Are Payment Reforms Addressing Social Determinants of Health? Policy Implications and Next Steps” Issue Brief February (2021) Available at: (Accessed: 26 February 2021).

(2021). Retrieved 2 March 2021, from