The Connection Between Social Determinants of Health and US Healthcare Expenditures
Are SDOHs associated with Medicare, Medicaid, and private insurer spending?
A trend in the United States has been the rise in national health expenditures—in 2022, they experienced a 4.1% uptick to $4.5 trillion, represented by 9.6% growth in Medicaid, 5.9% growth in Medicare, and 5.9% growth in private insurer spending.1 In fact, analysis indicates that over the course of the next decade, the average growth in health expenditures is predicted to exceed the average growth in gross domestic product.1
In the midst of this, health inequities continue. The US federal government has made it known that it is dedicated to addressing social determinants of health (SDOH), the nonmedical factors that impact health outcomes; as a way to link the two, a study published in JAMA Network Open2 sought to determine if SDOHs were associated with various US healthcare expenditures, including Medicare, Medicaid, and private insurers.
Using the 2021 Medical Expenditure Panel SDOH Survey, the study investigators conducted a cross-sectional study of US adult civilians with Medicare, Medicaid, or private coverage. Those who had other forms of public coverage or no insurance at all were excluded, and the data analysis occurred from October 2023 to April 2024.
Out of the total 14, 918 insured adults that comprised the sample size (mean [SD] age, 52.5 [17.9] years; 8,471 female [56.8%]), a majority of participants had middle to high family income (10 ,524 participants [70.5%]) and were privately insured (10, 227 participants [68.5%]). The annual median (interquartile range, IQR) expenditure was $1,648 ($389-$7,126) for Medicaid, $3,643 ($1,321-$10, 519) for Medicare, and $1,369 ($456-$4,078) for private insurers.
There was a direct association between educational attainment and social isolation and Medicaid expenditures. Specifically, Medicaid beneficiaries with a high school diploma or general educational development certificate had on average (mean difference) $2,245.39 lower annual Medicaid expenditures (95% confidence interval, CI, −$3,700.97 to −$789.80) compared with those beneficiaries with less than a high school level education. When analyzed alongside those who had never felt isolated, Medicaid beneficiaries who often felt isolated had on average $2,706.94 (95% CI, $1,339.06-$4,074.82) higher yearly Medicaid expenditures.
There was also a connection among the qualities of healthcare access, built environment, and economic stability with Medicare expenditures. Medicare beneficiaries living in neighborhoods with less parks had on average $5,959.27 (95% CI, $1,679.99 to $10, 238.55) higher annual Medicare expenditures. Medicare beneficiaries who were very confident in covering unexpected expenses had on average $3,743.98 lower annual Medicare expenditures (95% CI, −$6,500.68 to −$987.28) compared with those who were not confident. Meanwhile, medical discrimination and economic stability were associated with private expenditures. On average, private insurance beneficiaries who experienced medical discrimination had $2,599.93 (95% CI, $863.71-$4,336.15) higher annual private expenditures compared with those who did not.
As a result, the study investigators concluded that, “This cross-sectional study found individual-level SDOH to be significantly associated with US healthcare expenditures, potentially incentivizing health insurers to utilize SDOH in their decision-making practices to identify and control expenditures. Health insurers may use HRSN [health-related social needs]to identify beneficiaries at greater risk for high expenditures to target interventions by prioritizing SDOH domains found to be significant in our analysis. Addressing structural SDOH may require insurers to engage with multisectoral stakeholders with shared funding mechanisms and for public policymakers to adopt a health-in-all policies approach. While addressing HRSN may be more feasible in the short term, targeting structural SDOH through multisectoral partnerships may address the root cause to achieve a more equitable and sustainable healthcare system.”
References
1. Centers for Medicare & Medicaid Services. NHE fact sheet. Published June 14, 2023. Updated September 10, 2024. Accessed September 16, 2024. https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/nhe-fact-sheet
2. Mohan G, Gaskin DJ. Social Determinants of Health and US Health Care Expenditures by Insurer. JAMA Netw Open. 2024;7(10):e2440467. doi:10.1001/jamanetworkopen.2024.40467
