Linking financial strain to medical and social need

The most immediate point of intersection between hospitals and consumer financial risk is the inability of patients to pay their medical bills. This is changing as the role of hospitals in meeting social determinants of health (SDOH) expands. Low incomes and poor health outcomes are linked across multiple conditions and stages of life.

The short- and long-term risks of financial security are amplified for providers and patients, given just how close so many in the U.S. are to economic shocks they cannot cover or rebound from:

• A Federal Reserve survey found that 36% of adults could not pay cash to cover a $400 emergency expense; even those who could cover the expense might tap savings or a credit card to meet the immediate need (2020).
• Race-related outcomes are worse: nearly 40% of employed Black or Hispanic adults in the same survey reported that a $400 emergency expense would make it harder to pay other bills, compared to 18% of employed white adults.
• This can create a snowball effect, what Health Affairs calls a “crowding out . . . on other important financial obligations such as rent, food, energy and medical debt” (2022).

A person in these circumstances may find themselves not only ill but in need of social services for the first time. Hospitals can help make the connection through data and analytics that link SDOH risk, medical need and community resources.

Finance: Definition, dimensions and risk

As highlighted in a previous blog, finance is one of six SDOH categories that DataGen uses to help hospitals measure social risk: a measure of the non-clinical vulnerabilities that affect individuals and the community. The SDOH categories, including food, housing, transportation, digital competency, and health literacy, can be used discretely or collectively to assess risk, design and deploy interventions, and quantify their impact on the people who need them most.

DataGen’s financial SDOH data is licensed through Socially Determined ­and includes three dimensions: Strength, Resources and Resiliency. Each category contains drivers that help hospitals calculate social risk (none to high) and prioritize need. Individual risk drivers include financial assets and liabilities, while community risk drivers capture macro income and cost of living. Opportunities are drivers at both levels.

To link SDOH investment, resource planning and ROI, hospitals have access to nearly 70 data elements that DataGen uses to identify and calculate risk, scoped into ZIP Code or out to larger disadvantaged areas.

Financial strain, disease and social services

The Milbank Quarterly has highlighted income as key to the “fundamental cause theory of disease” and names social services as one of four ways to address “income-related health inequities.”

Hospitals are under increased pressure to offer market solutions here, but how? One example is a health system that uses social risk data and healthcare analytics to identify its most disadvantaged market. They then partner at no cost with a national non-profit to open multiple counseling centers within that footprint — addressing needs in a targeted, collaborative way.

Through such centers, other SDOH needs are revealed via an analytics-forward approach that is sustainable and long-term. And this is just what patients and providers need: the ability to avoid risk, minimize adverse consequences and improve outcomes across a variety of circumstances.