Using area-level measures to account for social risk in health care payment

Unmet social needs adversely affect health. In response, there has been continued interest in directing health care payment in ways that account for social determinants of health, avoid inappropriately penalizing providers who care for socially at-risk populations, and ultimately improve health outcomes.

Because many policy makers still lack robust individual-level social determinants data, some have used geographic measures. For instance, New Zealand and the United Kingdom have developed composite indices of social risk to allocate funds to local health providers. In the United States, Massachusetts Medicaid developed a census data-based “neighborhood stress score,” which is combined with individual-level variables to inform risk-adjusted payment to Medicaid accountable care organizations. There are ongoing calls to use this type of approach more broadly in the US.