Social Determinants of Health Influences Future Health Care Costs in the Medicaid Cohort of the District of Columbia Study

Early View Original Scholarship Social determinants of health

Policy Points:

  • Social determinants of health are an important predictor of future health care costs.
  • Medicaid must partner with other sectors to address the underlying causes of its beneficiaries’ poor health and high health care spending.

Context: Social determinants of health are an important predictor of future health care costs but little is known about their impact on Medicaid spending. This study analyzes the role of social determinants of health (SDH) in predicting future health care costs for adult Medicaid beneficiaries with similar past morbidity burdens and past costs.

Methods: We enrolled into a prospective cohort study 8,892 adult Medicaid beneficiaries who presented for treatment at an emergency department or clinic affiliated with two hospitals inWashington, DC, between September 2017 and December 31, 2018.We used SDH information measured at enrollment to categorize our participants into four social risk classes of increasing severity. We used Medicaid claims for a 2-year period; 12 months pre- and post-study enrollment to measure past and future morbidity burden according to the Adjusted Clinical Groups system. We also used the Medicaid claims data to characterize total annual Medicaid costs one year prior and one year post study enrollment.

Results: The 8,892 participants were primarily female (66%) and Black (91%). For persons with similar past morbidity burdens and past costs (p < 0.01), the future morbidity burden was significantly higher in the upper two social risk classes (1.15 and 2.04, respectively) compared with the lowest one. Mean future health care spending was significantly higher in the upper social risk classes compared with the lowest one ($2,713, $11,010, and $17,710, respectively) and remained significantly higher for the two highest social risk classes i.e.,($1,426 and $3,581, respectively), given past morbidity burden and past costs (p < 0.01). When we controlled for future morbidity burden (measured concurrently with future costs), social risk class was no longer a significant predictor of future health care costs.

Conclusions: SDH are statistically significant predictors of future morbidity burden and future costs controlling for past morbidity burden and past costs. Further research is needed to determine whether current payment systems adequately account for differences in the care needs of highly medically and socially complex patients.

Keywords: social determinants of health, health care costs, Medicaid, disease severity.

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Citation:
McCarthy M.L., Paul D, Li Y, Locke R, Elmi A, Wilder M.E., Zheng Z, Zeger S.L. Social Determinants of Health Influences Future Health Care Costs in the Medicaid Cohort of the District of Columbia Study. Milbank Q. September 22, 2022.