Advisory Board surveys health system strategic planners  each year to understand their top priorities. This year, nearly 90% of participants reported that their systems intend to expand efforts to address social determinants of health (SDOH) and health disparities. It was ranked as the second-highest priority, behind clinical operational efficiency. 

This isn’t new. In last year’s survey, addressing SDOH was ranked number one. But efforts thus far are falling short of this top-priority status. Sustainable funding for SDOH initiatives is in short supply amid budgetary constraints. Routine screening for social needs is spotty. And community-based resources are scarce. 

Increased pressure on health systems to address health equity may drive verbal commitments to SDOH and health equity, but will there be real action to back these commitments?

Despite significant barriers to SDOH initiatives, I believe our survey results show that healthcare leaders are shifting how they think about SDOH and health equity. It’s not just something they should be doing, it’s something they must be doing 

Advisory Board defines SDOH categories as finances, environment, food, education, social context, and technology. These social determinants account for up to 50% of health outcomes, a significantly greater percentage than clinical care. They have been linked to early development of chronic disease, substance use disorder, and depression. Addressing SDOH is clearly a moral imperative for health systems, but should health systems consider it a business imperative as well?

I think SDOH initiatives are a business imperative for health systems, and here are three reasons why:

1. Addressing SDOH is key to managing complex patients cost efficiently.

This year, tech and retail disruptors have made big moves in care delivery. These disruptors thrive by offering convenient access for low-acuity, generally healthy patients. As these patients flock toward convenient and consumer-savvy providers, hospitals and health systems are left to provide care for high-acuity, highly complex patients, whose disease states and treatment adherence are heavily influenced by non-clinical factors.

To succeed financially, health systems must become experts at treating complex patients whose health is impacted by factors outside of the clinical setting. Not only does this ensure that patients get the care they need, but it also keeps the cost of care at sustainable levels by reducing ED visits and preventable hospitalization. This is crucial in a world where the cost of treating patients is already surpassing reimbursements.

2. Health systems can win talent with a good track record on SDOH.

Unmet patient social needs are overburdening emergency departments and clinicians, as providers are expected to treat patients that suffer from housing insecurity, food insecurity, and substance use disorders without the resources to address these issues. This can leave staff with a reduced sense of efficacy, a key component in burnout, which nearly 50% of providers struggle with.

Health systems need to provide more than dollars to retain workers. They also need to reduce burnout and increase job satisfaction. Addressing SDOH contributes to a positive work environment by reducing clinical burden in the ED and increasing clinicians’ perceived impact.

3. Health systems need to prove their community value.

Health systems have been put on the defensive to prove they are worth the tax benefits that they receive. Many systems have faced scrutiny for allegedly moving away from their nonprofit mission and putting profits over patients. And this scrutiny is catching the attention of regulators. Recently, a bipartisan group of senators called on tax regulators to improve oversight of the charity care and community benefits that nonprofit hospitals provide.

Health systems are preparing for a new reality in which retaining public support means living up to their mission — and that means addressing social forces that are impacting their communities’ health.

Health systems are facing an uncertain future. The status quo is not enough to survive unprecedented challenges. SDOH initiatives should already be a moral imperative for all healthcare organizations, but to achieve significant progress, they must become a business imperative.

My hope is that health system strategists are at the very least aligning with my first point above. That’s the strongest business and moral case for addressing SDOH, as it aligns the mission of treating underserved communities with margin-management efforts. Evidence from our survey this year also seems to support this theory: strategists selected complex patient management as the number three area of opportunity to improve clinical operations.  Health systems with successful SDOH initiatives will provide the best care possible for a patient pool that is growing in complexity — and these systems will also differentiate themselves in a world of new entrants.

Do any of these hypotheses ring true for your organization? What did I miss? Let me know at nivesm@advisory.com.