Is SDOH the Key to Unlocking MA Profitability?
Executive Takeaway: The recent financial pressure on Medicare Advantage businesses means plans must focus on ways to improve retention, maintain Star Ratings, and meet new regulatory changes. The good news is - new SDOH programs — such as Town Square — may be the key to all three. To learn more about how Town Square can support your organization, email us at [email protected].
We’ve all seen the headlines; the Medicare Advantage market is under pressure. Humana’s CEO Bruce Broussard articulated the current environment well, "the Medicare Advantage sector is navigating a complex and dynamic period of change as we are all working through significant regulatory changes while also absorbing unprecedented increases in medical cost trends.”
Profitability and meeting new regulatory requirements are top of mind for health plan leaders. Here’s why investments in new SDOH programs may be the key to unlocking both, and how Town Square can support leaders to meet their goals.
How New SDOH Programs Drive Retention & Profitability
It's the Medicare Advantage Open Enrollment Period (OEP), and many executives are closely watching their retention rates. The average annual voluntary disenrollment rate is around 20%, and the cost to continually replace lost members is financially unsustainable.
The cost to acquire new members keeps going up and typically plans don’t make a profit on Medicare beneficiaries until the third membership year. Focusing on member retention is critical to profitability and SDOH programs can be a key mechanism to increase retention.
The case for SDOH programs and retention:
• Supporting a member to overcome their most vulnerable moments in life can differentiate your relationship and increase year-over-year member retention. Imagine if this were your member: “I didn’t think I could stay at home anymore until my community guide Maria helped me get rides to my doctor and meals delivered. She even helped me get pest control service when we needed help. Now I feel I can stay at home close to my family. It changed my life!”
• An important demographic shift is the increase in unmet social needs among the senior population. Due to rising food, gas, rent, and other basic necessities, 68% of seniors are now experiencing gaps in social care or Social Determinants of Health (SDOH). Consumer demand for SDOH support is so high that members often put their SDOH needs first, and their health often takes a backseat.
For innovative health plans this creates a new opportunity to meet members social needs and win member loyalty.
Smart investments in SDOH programs with an SDOH network and member engagement platform like Town Square make it seamless to operationalize these programs and provide direct impact to plan profitability.
Here’s how:
• Helps retain members through the critical three year profitability period
• Ensures members are known to the plans, receive accurate health risk assessments and are utilizing appropriate benefits
• Connects members with critical upstream SDOH support that can help reduce, prevent, or delay costly medical spending and even prolong their ability to live at home
• Builds trust and enhances our influence over member behavior to drive other healthy actions like closing care gaps and regular PCP visits
All of these efforts lead to improved member satisfaction and experience.
How SDOH Impacts Star Ratings and CMS Penalties
Member Satisfaction: In 2020, CMS began making changes to Star ratings, giving substantially more weight to customer experience metrics than in the past. Given the growing consumer demand for social service support, meeting and exceeding members expectations by supporting their unmet social needs is a great way to improve satisfaction.
Health Equity Index: The recent inclusion of a Health Equity Index (HEI) to the Star Ratings methodology is a major change to star ratings methodology for MA plans. The HEI will replace the existing reward factors for Quality Bonus Payment (QBP) and reward contracts serving members with social risk factors (SRF). Failure to have enough enrollees with SRF and to sufficiently serve these populations can reduce a plans Star Rating. If plans want to retain their bonus payments and Star ratings, smart investments in SDOH will be critical.
Further, once plans have grown the pool of members with social risk factors they’ll need to cost-effectively meet their needs to ensure they stay in a mid-risk tier and don’t escalate to high cost / higher risk levels. And, it is financially advantageous to build trust and retention with a population of members that have moderate risk scores and are well managed.
Part C Reporting Requirements: Starting this year, January 2024, plans are now required to communicate to members the balance of their unutilized benefits. Health plans have historically struggled with low engagement rates and high costs when communicating with members with social risk factors. Many plans will benefit from working with vendors like Town Square that offer tech-enabled member engagement services that can cost effectively support members and facilitate these types of screenings and benefit utilization communications.
SDOH Made Easy with Town Square
We created Town Square to help Medicare Advantage plans stay ahead of the curve. All of the initiatives above are not siloed programs, they are components of a holistic approach to supporting the 68% of seniors who have unmet social needs, with trust and empathy.
Town Square’s innovative end-to-end SDOH network and engagement platform enables health plans and social service organizations to work together seamlessly and wrap-around member engagement services from local Community Guides to scale relationships with members and guide them to the right social services when they need it most.
Through aligned incentives, innovative technology and human trust, we’re helping plan leaders improve financial performance and the health of their members.
To learn more about how Town Square can support your organization, email us at [email protected]