A homeless man in Phoenix named T.J. made 254
trips to the emergency room, had 32 hospital admissions and cost UnitedHealth
Group, the nation’s largest health insurance company, and the U.S. healthcare
system more than $294,000 since 2015.
That's when, according to an account made to
Wall Street analysts, UnitedHealth executives stepped in.
“When I first met T.J., he was homeless and
unemployed,” Jeffrey Brenner, senior vice president of integrated health and
social services for UnitedHealth, told analysts at the company’s annual
investor conference in New York last November. “He’d been on the streets for
some time. He would go from emergency room to emergency room over the last two
weeks. He had been admitted and discharged to one hospital and a few days later
show up at another.”
UnitedHealth moved T.J. into temporary housing
where he stayed for a couple of days. The insurer bought him furniture and
helped him set up his apartment. Then UnitedHealth coordinated with a local
provider to help him move in. Then the insurer set up counseling for T.J.'s
depression, treatment for his diabetic foot ulcer, helped him apply for Social
Security Disability, and education on rental housing. The upshot, Brenner told
investors, is that a once-homeless man is taking care of himself, which should
mean he will not only live a better life, he will cost UnitedHealth and
taxpayers less money.
It's a down payment on a new strategy being
pursued by just about every health insurance company in America – investing in
housing, medicine, and even food to reduce health care costs. Anthem, Aetna,
Humana, and government Medicare and Medicaid programs are all investing in such
factors – known in the industry as "the social determinants of
health." – in an effort to increase profits.
“Social determinants of health, like food
security or stable housing issues, sit upstream from and weigh heavily on gaps
in care,” UnitedHealthcare CEO Steve Nelson told analysts on the company’s
first quarter earnings call. “Data from other countries and our own experience
indicate social investments reduce health care costs, and addressing these
social determinants is the next frontier in serving the whole person here in
the U.S. "
UnitedHealth has invested $350
million since 2011 in affordable housing in 14 states. And the
nation’s second-largest health insurer, Anthem has committed more than $380
million to affordable housing over the last decade. And other
insurers, such as Humana, are investing and partnering in certain communities
as part of a “Bold Goal Initiative” that targets a variety
of social determinants.
“Physicians are where we always start, but
it's also very important to work with non-profits, for-profits, faith-based and
other organizations,” Humana chief medical officer Dr. Roy Beveridge said. “In
the new world of population health, we need to drive community engagement and
better health outcomes through local organizations like the grocery store, the
local Y, and a food bank. And, we must define metrics and measure
progress in order to demonstrate value back to the community."
This sudden interest in the basic needs of so
called "frequent flyers" or “super utilizers”– who use an outsize
amount of healthcare resources, is in part the result of new efforts toward
what is known as "value-based" care. Insurers are still paying for
the traditional doctor’s office visit, hospitalizations and drug coverage, but
they want to make sure whatever is needed upfront to avoid something more
expensive and unnecessary down the road is taken care of.
“Value-based payment is the foundation for any
value-based care,” Dr. Sam Ho, UnitedHealthcare’s former chief medical officer
told more than 100 journalists at the annual meeting of the Association of
Health Care Journalists annual meeting in April in Phoenix. “If you pay only
for volume you are only going to get volume.”
The shift to value-based care and population
health means more use of a CVS nurse practitioner, a nutritionist in the home
via Humana’s Humana At Home service or a Walgreens pharmacist at the drugstore
counter administering a vaccine or providing advice on the most effective
medicine. And insurers are increasingly paying for social workers, Uber and
Lyft car rides to the doctor and, in Phoenix, rent of low income patients who
don’t have a place to go.
This is part of a broader value-based approach
increasingly being integrated into U.S. health policy as the federal government
and states move away from fee-for-service medicine that pays doctors and
hospitals based on volume of care delivered to alternative reimbursement
models. It can be seen in states across the country and it’s one area where the
Obama administration and Trump administration agree more can be done to allow
health insurers to pay for services not traditionally covered.
The Obama administration said it wanted to
shift 50% of Medicare payment to alternative and value-based models by the end
of this year. And the Trump administration has committed to more and different
value-based models and privately administered Medicare Advantage plans that
encourage such payment approaches.
Earlier this year, the Trump administration
via the Centers for Medicare & Medicaid Services said it was
“reinterpreting the standards for health-related supplemental benefits in the
Medicare Advantage program to include additional services that increase health
and improve quality of life.”
CMS is also broadening its definition of
“primary health related” in the Medicare Advantage program. “Under the new
definition, the agency will allow supplemental benefits if they compensate for
physical impairments, diminish the impact of injuries or health conditions,
and/or reduce avoidable emergency room utilization,” CMS said.
Though insurers will still have to submit bids
and get CMS to approve specifics for the kinds of new services they want to
add, analysts say it opens the door to more ways to address social determinants
of health. Medicare Advantage plans contract with the federal government to
provide extra benefits and services to seniors, such as disease management and
nurse help hotlines, with some even providing vision and dental care and
wellness programs.
“This new flexibility will allow Medicare
Advantage plans to broaden the scope of services tailored to assist patients,”
Blue Cross Blue Shield Association vice president of health policy and analyst Kris
Haltmeyer said.
State Medicaid programs, working with health
insurers, are also opening up to covering more nontraditional services and the
health plan lobby is pushing state legislatures and governors to spend more
money on social determinants of health.
“All of our members are starting to look at
this,” says Jeff Myers, president of Medicaid Health Plans of America,
which represents most major health insurers including Centene, UnitedHealthcare
and Wellcare Health Plans. “Obviously, states cannot afford to pay for
everything, but until you meet those basic needs, it’s almost impossible to
address their healthcare. It’s hard to get a diabetic to focus on eating well
if they don’t know where they are going to live.”
Increasingly, Myers sees states being more
open to paying for housing, job training, childcare and other social
determinants. “All of those models are predicated on this belief that getting
ownership into people's healthcare and the way they manage their own healthcare
will ultimately lower their own costs,” Myers said.
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