A homeless man in Phoenix named T.J. made 254 trips to the emergency room, had 32 hospital admissions and cost UnitedHealth Group, the nationâ€™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.
â€śWhen I first met T.J., he was homeless and unemployed,â€ť Jeffrey Brenner, senior vice president of integrated health and social services for UnitedHealth, told analysts at the companyâ€™s annual investor conference in New York last November. â€śHeâ€™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.â€ť
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 â€“ 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 â€“ known in the industry as “the social determinants of health.” â€“ in an effort to increase profits.
â€śSocial determinants of health, like food security or stable housing issues, sit upstream from and weigh heavily on gaps in care,â€ť UnitedHealthcare CEO Steve Nelson told analysts on the companyâ€™s first quarter earnings call. â€śData 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.Â “
UnitedHealth has invested $350 million since 2011 in affordable housing in 14 states. And the nationâ€™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 â€śBold Goal Initiativeâ€ť that targets a variety of social determinants.
â€śPhysicians are where we always start, but it’s also very important to work with non-profits, for-profits, faith-based and other organizations,â€ť Humana chief medical officer Dr. Roy Beveridge said. â€śIn 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.Â 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 â€śsuper utilizersâ€ťâ€“ 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 doctorâ€™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.
â€śValue-based payment is the foundation for any value-based care,â€ť Dr. Sam Ho, UnitedHealthcareâ€™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. â€śIf you pay only for volume you are only going to get volume.â€ť
The shift to value-based care and population health means more use of a CVS nurse practitioner, a nutritionist in the home via Humanaâ€™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 donâ€™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 itâ€™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 â€śreinterpreting the standards for health-related supplemental benefits in the Medicare Advantage program to include additional services that increase health and improve quality of life.â€ť
CMS is also broadening its definition of â€śprimary health relatedâ€ť in the Medicare Advantage program. â€śUnder 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,â€ťÂ 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,Â with some even providing vision and dental care and wellness programs.
â€śThis new flexibility will allow Medicare Advantage plans to broaden the scope of services tailored to assist patients,â€ť 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.
â€śAll of our members are starting to look at this,â€ť says Jeff Myers, president of Medicaid Health Plans of America, which represents most major health insurers including Centene,Â Unitedhealthcare and Wellcare Health Plans. â€śObviously, states cannot afford to pay for everything, but until you meet those basic needs, itâ€™s almost impossible to address their healthcare. Itâ€™s hard to get a diabetic to focus on eating well if they donâ€™t know where they are going to live.â€ť
Increasingly, Myers sees states being more open to paying for housing, job training, childcare and other social determinants. â€śAll 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,â€ť Myers said.