The next in our series of posts sharing key takeaways from panels at the Healthcare & Life Sciences Private Equity and Lending Conference focuses on social determinants of health. It is authored by Hannah Schuppner and Leah Eubanks.

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Social Determinants of Health – Understanding Their Impacts on Investments: 5 Key Points for Investors

By Hannah Schuppner and Leah Eubanks

Growing research shows that factoring in the social determinants of health can change the course of treatment for patients and providers. Social determinants of health are the social and environmental factors that contribute to a person’s overall mental, physical, and emotional health. These factors are crucial to health status and treatment outcomes.

According to experts who spoke on a panel at the Annual Healthcare and Life Sciences Private Equity & Finance Conference in Chicago on February 20 and 21, a growing trend in health care is to look beyond physical symptoms and instead look to external factors. Experts included Dr. James Rubin, Founder and Chief Executive Officer of TAVHealth, Joshua Slen, Vice President of Marwood Group, and Andrew Walsh, Senior Vice President – Care Management of Ciox Health. The panel was moderated by Mike Marrah, President of MMA Consulting.

Here are five key points from the panel discussion:

1. Social determinants are a key component of a person’s health, and it is estimated that these factors account for between 60% and 80% of what affects your health, according to one panelist. As such, practitioners are now beginning to integrate these factors into care plans and diagnosis. It no longer is enough to account for a patient’s physical symptoms; patients’ environment and the community and conditions in which they live are now an integral component of health interventions.

2. The historical care delivery model is largely reactive, with healthcare providers treating conditions or symptoms, rather than focusing on what is causing the condition or symptom. However, this is beginning to change. The healthcare industry is seeing more and more examples of how providers are able to better treat physical conditions by looking at the patient’s surroundings. For example, if a patient comes in complaining of asthma, the cause may be rooted in an environmental factor such as mold in their home. If the mold is never remedied, the physical condition will not improve.

3. Major insurers and payors are starting to make their contracts value-based, meaning that these contracts are now dependent on the patient health outcomes. As this trend continues, social determinants of health will become more important when it comes to payor contracts. For instance, if a payor will pay for an outcome, the provider will need to deliver the outcome in the most efficient manner. Efficiency requires providers to go beyond the physical symptoms to account for outside factors negatively affecting the patient’s condition.

4. There is an opportunity for investment in healthcare providers that already understand the importance of social determinants in their treatment plans. In order to understand what providers have already implemented and what measures could potentially be implemented moving forward, investors should begin integrating questions aimed at policies surrounding the social determinants of health into their diligence process and implementing procedures that consider how these social and environmental factors are affecting patients’ health. This can be achieved simply by teaching healthcare providers to inquire about social and environmental factors in addition to clinical information. If the patient is not coming in for follow-up appointments, perhaps the issue is not with the physical health, but a lack of reliable transportation. This is one example of how other factors directly affect a patient’s course of treatment.

5. CMS has now determined that value-based care can and will happen. As CMS and commercial payors have set this tone, factoring in social determinants of health is not only a smart business practice today, but will soon become an economic imperative. Investors should stay ahead of the curve and begin considering how best to implement policies that consider other determinants of patient health.