Accounting for social risks in Medicare and Medicaid payments

A little more than a year and a half ago, our Health Affairs Forefront report on an initial workshop about adjusting health care payments for social risk concluded:

“Adjustment for social risk is a critical step toward equitable healthcare delivery and reversing the tendency of healthcare resources to aggregate in the places and populations with the least need—a phenomenon labeled the “Inverse Care Law.” Precision geographic approaches to assessing social risk … can also support collaboration among the federal, state, local, and private agencies that address social determinants of health.”

That workshop generated considerable stakeholder interest in developing program policy options, spawning two additional workshops in 2022 that further developed policy options specific to Medicaid and Medicare. From these workshops emerged a framework for policy opportunities based on these basic tenets:

1. Clinicians caring for disadvantaged populations require increased funding to address social needs;
2. Payment adjustments should be adjusted sufficiently to address social needs;
3. Accountability for funding reaching practices and serving patients is needed but without increased clinician burden; and
4. Policy targets must include improved health outcomes and equity, not just overall savings.