Robert Graham Center Research

Analysis: Include Social Determinants in Physician Payment

December 21, 2016 03:30 pm Michael Laff

Physicians know that social factors are often behind the reasons why patients schedule office appointments, so payment systems should take those factors into account.

Researchers are intent on developing a reliable tool that helps physicians and insurers confront health risks before they require medical attention. Making the case for incorporating social determinants of health into patient care and physician payment, researchers from the Robert Graham Center for Policy Studies in Family Medicine and Primary Care suggest drawing on successful models in other countries. Their article, "How Other Countries Use Deprivation Indices -- And Why the United States Desperately Needs One," was published in the November issue of Health Affairs.(

"The United States lacks a nationally agreed-upon strategic approach for reducing health disparities and for bringing social determinants of health into efforts to do so," the researchers wrote. "It lags behind other countries and behind innovative communities within its borders in addressing the health impact of social inequities through clinical and policy interventions, including adjusting resource allocation according to need."

Story Highlights
  • Researchers recently made a case for incorporating social determinants into patient care and physician payment.
  • They cited Britain and New Zealand as two examples of where physician payment is based in large part on levels of social risk among their patients.
  • CMS asked several organizations to develop a payment adjustment method that takes neighborhood characteristics into account.

Winston Liaw, M.D., M.P.H., medical director for the Graham Center and a co-author of the article, told AAFP News recently that physicians are realizing it is important to identify "where their patients come from." Many initiatives collect data about social risk, but only a handful tie them directly to health outcomes. One Medicaid accountable health organization that does, Hennepin Health in Hennepin County, Minn., created a comprehensive patient record using claims data, social service records, housing status and electronic health records to help inform care plans.

The authors cited Britain and New Zealand as two examples of where physician payment is based in large part on levels of social risk among their patients. Researchers in Britain developed a deprivation index that includes information about education, housing, geographic access and income for aggregations of about 300 people. Health outcomes improved following implementation of the index, especially disparities in cardiovascular mortality.

In New Zealand, health officials use an index that divides people into geographic units of about 80 individuals called "meshblocks." The index tracks nine measurements, including income, means of support, transportation, Internet access and size of living space. Adjustments are made for immigrant or refugee status and rural location. The government uses the index to distribute health care finances.

"In Britain and New Zealand, they have been paying physicians for decades on a population level," Liaw said. "It is a lesson we can learn from."

The Graham Center developed a Social Deprivation Index based on Britain's and New Zealand's indices, incorporating neighborhood data that can help physicians identify patients whose communities might contribute to poor health outcomes. Factors used in the index include single parent status, transportation, crowding and income. Liaw said the index can be tied directly to health outcomes, showing populations with poor outcomes in areas with high deprivation.

"We'd like to be able to address hot spots where patients have poor health outcomes and cold spots where the necessary resources are lacking," he said.

Liaw cautions that social determinants are not a guaranteed predictor of health outcomes because some elements are not consistent across all communities.

The research comes as policy changes addressing population health are on the horizon. CMS has asked several organizations to develop a payment adjustment method that takes neighborhood characteristics into account.

The authors believe that the HHS Office of the Assistant Secretary for Planning and Evaluation is the best agency to test the index as a tool for a value-based payment model. They note that the CDC also has developed an index that could be a starting point for a deprivation index.

Liaw said that primary care physicians can ask patients about their social needs and their neighborhoods. In his own practice, medical staff collect information about individual social needs by asking patients to complete a survey on area resources and combining that information with other neighborhood data.

Soon, physicians across the country may be able to map their own patient populations and overlay these maps with both community data and information about resources such as recreation areas. After a population health tool that allows for this is fully developed, the next step will be to use it on a daily basis during office visits.

"Bringing community data inside a physician's office is very novel and offers great potential," Liaw said. "Several groups are experimenting with how to do this well, and we hope to have new insights in the coming years."

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Report Calls for Addressing Social Risks in Medicare Payment

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Social Determinants of Health Issues Take Center Stage