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When it comes to improving patient care, Social Determinants of Health, or SDOH Solutions continue to be top of mind, as the pandemic continues to grip the world. Healthcare organizations all over the US, continue to grapple with ways to extend the care of patients beyond the walls of clinics and hospitals. On this episode, we hear from Matt Sabbatino, Managing Director an L.E.K. Consultings Healthcare Services practice.
He provides insights on what has happened with SDOH services during the pandemic and what the outlook is for the future. Thanks for joining us, Matt, please introduce yourself and tell us about the area that you specialize in.
I'm Matt Sabbatino, I'm a partner and Managing Director at L.E.K Consulting. I work out of our New York office, been here about 10 years, and I specialize in the area of healthcare services. So I work with health plans of various shapes and sizes, provider organizations of various shapes and sizes, and also vendors. That's service payers and providers.
Thank you, Matt. We look forward to your insights. So tell us, in regard to patient care, why has SDOH been so widely talked about, and how has healthcare addressed it?
It has become, SDOH that is, has become a hot topic and it has been for quite some time. We've been doing work in the space since I joined the firm and from before. It's an important discussion topic because the science and the evidence points to social determinants of health. So nutrition, transportation, housing, mental health, behavioral health, employment, et cetera. They all influence, and the environment in which people live, all influence their health and wellbeing, which then influences how they use medical services and utilize medical services.
So we traditionally think of health and wellbeing as being, are you sick or you're not sick, and when you get sick, the doctor or the clinician comes in and figures out what's wrong. And then they figure out what the symptoms are and they try and address the symptoms and treat whatever they think the condition is.
Social determinants takes it one or two steps back before someone may get sick with a specific condition and says, well, this person may not have stable housing, this person may not be eating right, et cetera. So let's try to address those problems or issues early so that we can then hopefully make the person healthier, also probably happier, and therefore ultimately reduce their downstream utilization of healthcare services.
Like, I may not have adequate housing and I'm hungry and I'm cold, so I'm going to walk into the local ER, because I know they're going to have to check me in and check me out and I'll be warm for a little bit. They'll give me a cup of soup and it'll get me off the streets for 12 hours or what have you. So if we had addressed that person's need for housing and for nutrition, they wouldn't wander into the emergency room, and we all know emergency room care, although it's vital, it's a very expensive care setting relative to basically every other setting.
So that's an example of why SDOH, Social Determinants of Health has become important topic because health plans, payers and also providers is the folks who actually deliver the care, all understand there are all these other factors that influence a person's health well before they actually get sick, and if you don't address those factors, it's likely that the patient or the person, if you will, is going to utilize healthcare services more than they would have otherwise.
It's also about just making people healthy and happy and feel like they're living a good life, if you will. Typically, if community based organizations or a provider or a health plan or some organization in some way takes steps to address social determinants, again, it should downstream and in the long term, reduce the utilization of more expensive medical services down the road, which would stack up into an aggregate savings in total cost of care for that person in the long run.
And that's really what drives a lot of the activity and investment in the space. There's also a certain extent where the state departments of health and human services and the agencies that run Medicaid are requiring that social determinant support services and delivery capabilities be built into the managed Medicaid offerings. So it's coming from the customer if you will, right? Because the states actually pay for Medicaid, either through fee-for-service or through a managed care contract with a health plan or a payer like a Centene or Molina or United Healthcare.
So there's a bit of a pull from the customer if you will, the true payer, but there's also a bit of a push from the health plans that do this and that's to do, as I was describing earlier, keep folks out of the emergency room, keep folks from developing chronic conditions or allowing chronic conditions to get out of control and therefore create a lot of downstream medical utilization and medical cost.
Hey, Matt, has the pandemic created an additional need for SDOH services? And if so, for whom?
A number of folks, obviously. In particular last year, well, 2020 actually, two years ago now. Time flies. Lost their jobs and they may have had a good job and had employers sponsored health insurance, and they may have lost that. They may have been pushed into either the uninsured roles or perhaps into Medicaid or perhaps into the individual ACA exchanges.
So with loss of work comes needs that may arise around housing and nutrition and searching for employment, et cetera. So for sure, the economic impacts of the pandemic created needs for social determinants of health supports. I think the medical side of the disease and the controls that were put in place to help try and mitigate the rate of spread have also created needs around social determinants of health, because there may have been folks coming in and out of the house to help John or Jean with the dishes or the laundry or to drop off food, et cetera.
And I think folks obviously got really reluctant to allow those visits, or they may not have been able to help out anymore. So there's that angle as well. And then I think a big consideration as well is the behavioral health component of it. The isolation created a lot of demand for mental health services as well.
And I think that was across need areas and the community based organizations that we work with have said, they have seen a lot of demand for their services and they're struggling to keep up. There's a bit of a shortage of their capacity and too much demand around need for services.
Understood. Now earlier you mentioned patient banking challenges and changes in insurance in the pandemic. So what can the healthcare industry do to meet these challenges?
Banking is a really interesting one, and I think it's one that often gets missed. We often hear about housing, again, because that is just a major influence on total health and wellbeing. Nutrition is another one, often hear about transportation. Can this person get to and from a doctor's appointment, or to or from a job, or to or from a job interview, you hear about job placement obviously because economic stability has a big influence on total health and wellbeing as well, but banking often gets forgotten.
And I think it's an interesting one because folks who are for whatever reason, uncomfortable with the traditional banking system or afraid to use it for whatever reason, they often get pushed into the payday loan banking cycle, which is, I'm sure many of you are familiar with, but it's just... it's usurious, right? It's just puts people in a pattern of they can never get out from under, again, to use a colloquialism around that. It's tough and we don't hear about it very often.
So there is a need there. It's a tough problem to solve for, because by definition often the folks who need support with SDOH and who are under-banked also don't have a lot of assets. So they're not the most attractive banking population for the commercial banks to go after or the retail banks to go after. So it perpetuates this, not comfortable with the system, not using the system, not building up credit, so I can't take a loan, even though I may be creditworthy, but I have no credit history. Or if I do need money, I'm taking these payday loans and that's just a downward spiral. That's difficult to extricate yourself out of.
What we've seen done, we've seen some health plans try and create some sort of bankable, almost like a bankable debit card that they issue as part of their health plan. Sometimes it starts out as an incentive card where if you get your flu shot or you get this diagnostic test taken care of, you get a few extra dollars in your flexible spending account or some sort of other incentive, whatever the incentive program is at the health plan sets up. But it's few and far between where they take it to the point of some bankable card where their members, the health plan members can actually store money and build some sort of credit history and earn some level of interest.
This one is a bit of a passion of mine. It's a tough one to solve for. I hope at some point the large retail banks get some sense of responsibility to try and help solve for this as well. But it is, in fairness to them, they have to run a business, right? Most of them are publicly traded the large retail banks. And so they have a fiduciary responsibility and it's a bit of a tough problem to work out from everyone's angle, but it does create stress as well for people. I know I would be stressed out if I had all my money under my mattress.
Absolutely. Point well taken. Matt, finally, how can healthcare providers or technology companies innovate in this space? Can you give us your advice?
It's tough. It's a tough question. It's a tough problem to solve for, again, I go back not to repeat myself, but I go back to oftentimes the populations that need this sort of help, they don't have a lot of disposable income or assets to put to work, to help solve them. So we're trying to tackle this from a business perspective to get to return on investment and profit and all those business metrics that we have to strive for to make something a going concern.
At times, it's difficult to get all of that to pencil out. I do think the use of technology, because it oftentimes, most times it's supposed to it create efficiencies in delivering things, is an interesting angle to this. There are a number of companies that are out there today, like Healthify and Signify, et cetera, Aunt Bertha which just rebranded to findhelp or some such.
They've created a business model where, what they do is build networks of community based organizations that provide a lot of these services. These SDOH services to the community. Most of this community based organizations are funded by charity or grants, et cetera. So that helps solve for a lot of the typical business constraints when trying to build one of these delivery organizations from scratch.
So what the technology solutions like Healthify or Signify have done is they've unit us. They've built networks of these CBOs, and they build a platform that basically connects member/patient to health plan, to community based organization, to help care managers make those connections and get members or patients who need certain community based organization support, referrals. And some of them are striving to create what are called closed loop referrals, where referral actually gets tracked through to make sure that the patient who needs the help actually gets the help.
So there are already businesses that are technology enabled doing that. I think there are some unmet needs on the technology side that are interesting, that could be solved for and would be viable businesses all around risk stratification of populations so that the health plans, or if you're an at risk provider that has the population to manage, can proactively identify patients or members who very likely have a social determinative health need and make those connections proactively reach out, have a case manager, care manager reach out, see how that person's doing and try and do assessment and get that person connected to help sooner rather than later.
Rather than waiting for a claim to come in where the person is utilizing care for X, Y, and Z reason, and then those connections to SDOH community based organization, service organizations are being made.
So I think predictive analytics and risk stratification is a big area of unmet need. And the other one is, that pops out is around the closed loop piece of it. A lot of the technologies that are out there today are still trying to figure out how to have those closed loop referrals. Again, that's tracking the referral all the way through to make sure that if Matt's recommended to get some assistance with nutrition or housing or activities of daily living, that Matt actually does get that help in the end. It's one thing to tell Matt, he needs help, it's another thing to make sure Matt actually gets it.
Matt, thank you so much for your professionalism and sharing your insights with us, Matt, any closing thoughts you'd like to share with us?
One key takeaway is to... When we think about these things always remember it's about human beings. We're trying to help people who need help so that again, they could be healthy and feel a sense of wellbeing and feel like they have a sense of self worth and opportunity. And so it's easy to talk about technology and cost savings and what can health plans do? What can at risk provider organizations do? But that's always, and how do we make it a viable business? But let's bring it back to what this is all really about. Its human beings and human beings living their best life, if you will.
And I think there are ways that we can help those folks and get them what they need. We just have to be... We have to be creative and we have to leverage the data and information that's out there so that we can make informed decisions.
That's why I'm a believer in the analytics, the predictive analytics, the closed loop referrals, because those are things that leverage information, data, and technology that, again, should enable us to scale solutions and be efficient while still having an impact. So we can help folks. Why we as L.E.K. are well positioned to help different organizations think this through is we've been working in this space for a long, long time. And we come at it through different lenses.
We've worked on this with provider systems. We've worked on this with health plan/payers. We've worked on this with technology vendors. So we've tried to help large organizations develop their own technology around this SDOH need set. So we have a lot of experience from different angles. We know what works and what doesn't work and what the challenges are and where the levers are that enable value to be created.
So we've taken some bumps and bruises along the way when working with different organizations, and that just enables us to come in and save other clients those scratches and scars.
Good stuff. Matt, we really appreciate your insights and your professionalism. Thank you so much again.
That's my pleasure. Always happy to talk about this. This is, it's a hard problem to tackle for the reasons I talked about, which is mostly around economics, making economics work. But I think it's one we need to tackle because people deserve it and it does create net savings for society in the long run.
So it goes to show you, it may not be a direct relationship there, but there's probably something to that. And it goes to show you if you invest upfront, you'll end up saving in the downstream medical expenses. And again, hopefully people are healthier, feel better and have a shot at being a more productive member of society, which is what we're all supposed to be in theory, at least in my view, striving to provide.
Yeah, we forget that, right? It's about people and giving people a shot who need a little bit of support. And there's a lot of money and programs out there. We just have to help people navigate all of it because it's not an easy thing to navigate. This was Matt Sabbatino, it was my pleasure to share my thoughts. I hope you enjoyed it. And I hope to connect with some of you soon.
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