How Are Payment Reforms Addressing Social Determinants of Health?

The movement toward value-based care provides a significant opportunity to address social determinants of health (SDoH) while improving value and quality of care. Value-based care can allow greater flexibility in terms of what services are delivered while providing accountability for long-term sustainability and population health improvements. Although federal, state, and commercial payers are launching innovative new payment models addressing SDoH, questions remain regarding best practices for implementation, impact on cost and outcomes, and ability to scale and spread across different contexts under current policies. This issue brief summarizes the current landscape of payment reform initiatives addressing SDoH, drawing on results from a systematic review of peer-reviewed and gray literature supplemented with scans of state health policies and proposed payment reform models. It also discusses challenges and opportunities related to implementation — data collection and sharing, social risk factor adjustment (statistical methods for accounting for adverse social conditions associated with poor health), cross-sector partnerships, and organizational competencies — as well as policy implications and next steps so that states and payers can use value-based payment to encourage and promote addressing social needs.