Abstract
The U.S. health care system is broken, with particularly low performance for health outcomes, access to care, equity, and administrative efficiency in comparison with other high-income countries, despite high cost. By virtue of the many elements required for optimal care, the poor diabetes care quality and outcome metrics of the U.S. are canaries in the coal mine for the health care system. The fundamental problem with the U.S. health care system is that it does not prioritize the long-term health and well-being of all individuals and communities. Three intertwined elements are foundational for an understanding of why the U.S. health care system is built the way it is and what changes are necessary to improve it: 1) ethics and culture; 2) political economy, the underlying political and economic structures that shape our nation and thus our health system; and 3) the definition and measurement of value in health care. This article recommends that health care policies around health insurance and payment be designed to support, incentivize, and sustain effective population health models that address medical, social, psychological, and behavioral needs of all individuals and communities. Good governance is essential to assure that payer and provider market incentives are explicitly aligned to prioritize the health and well-being of individuals and communities and cost-effectiveness of care, beyond short-term financial gain for health care systems and investors. Equitable access allows for health care resource distribution according to need, enabling all individuals to have a fair and just opportunity for health.
Graphical Abstract
The U.S. health care system is broken. In The Commonwealth Fund’s 2024 survey of 10 high-income countries, the U.S. ranked last in health system performance, with particularly low scores for health outcomes, access to care, equity, and administrative efficiency (1), despite spending $4.9 trillion (17.6% of the U.S. overall economy) annually on health care (2). While the U.S. leads in technological innovation and well-insured individuals can access care, 25 million Americans ages 0–64 years are uninsured (3), approximately one-half of adults report difficulty affording health care costs, and one-quarter note skipping or postponing needed health care over the past 12 months because of cost (4). Approximately one-half of physicians report at least one symptom of burnout working in this dysfunctional system (5), and 19% of health workers reported feeling burnout very often in 2022 (6).
Diabetes is a model complex chronic condition requiring continuous holistic care that addresses medical, social, psychological, and behavioral needs of individuals and communities. By virtue of the many elements required for optimal care, our nation’s poor diabetes care quality and outcome metrics are canaries in the coal mine for the health care system. Analysis of the 2017–2020 National Health and Nutrition Examination Survey data revealed that 75.6% of adults with diabetes had hemoglobin A1c <8%, 71.5% blood pressure <140/90 mmHg, and 56.1% lipid control; 85.4% were nonsmokers; and 25.3% met all four criteria (7). Among adults with diabetes, 15.7% had stage 3 or 4 chronic kidney disease and 10.1% had severe vision difficulty or blindness (8). Moreover, inequitable care and outcomes are present among people with diabetes across factors such as race, ethnicity, income, education, rurality, and other aspects of geography (8,9). Systems engineers say the outcomes we see are a result of the system we have set up, or as legendary NFL football coach Bill Parcells famously said, “You are what your record says you are” (10) The record shows that the U.S. health care system is failing, achieving poor population health outcomes, harming millions of people despite $14,570 per capita health expenditures (11,12).
In this article, we present policy recommendations to improve the U.S. health care system, specifically to improve diabetes care and outcomes throughout the nation. We focus on financing and payment strategies to support and incentivize high-quality care for all that addresses the medical, social, psychological, and behavioral needs of patients and communities. We also address the role of culture change, which is no less critical to improve health care system performance and improve health outcomes (13,14). While money and proper financial incentives are key drivers, sustainable and scalable policy and systems innovations also require concomitant cultural change, whereby policymakers, health care industry, and the public specifically value the health of all Americans, including the most marginalized (10,15,16). Such an integrated technical and cultural approach is essential to meet the clinician’s ethical and professional obligation to provide the best quality care to all.
Most of this article will focus on the health care system rather than public health and social sector systems. Social drivers of health (SDOH) and nonhealth structural factors, such as economic development, housing, education, and the legal-justice system, have a greater impact than the health care system on health outcomes (17). However, we focus this article on the health care system’s role in addressing SDOH as opposed to what broader U.S. social policies should be (18,19). We welcome companion analyses to strengthen public health and social sector interventions and systems.
We start by describing effective diabetes population health models proven to improve outcomes. Then we describe the fundamental problem with the U.S. health care system that leads to inadequate diabetes care and outcomes, discuss a conceptual model for fixing a broken health care system, and end with policy recommendations, referencing key evidence and examples.
EFFECTIVE DIABETES POPULATION HEALTH MODELS FOR ALL POPULATIONS AND IMPROVING HEALTH EQUITY
The American Diabetes Association’s Standards of Care in Diabetes—2025 summarizes care models demonstrated to improve the health of populations with diabetes (20). These standards highlight the central role of the MacColl Center for Health Care Innovation Chronic Care Model dating back to the 1990s (21). In that model, a prepared, proactive practice team works with an informed, activated patient. The resources of health systems and communities are mobilized to care for individuals, focusing on self-management support, delivery system design, decision support, and clinical information systems. Additional elements of effective diabetes population health management include risk stratification and tailoring of care to different individuals; addressing medical, social, psychological, and behavioral needs; inclusion of community health workers in the care team; outreach to those individuals not interacting with the health care system; and partnerships with community-based organizations and social sectors (10).
Advancing health equity in diabetes care also requires measures to address structural drivers of inequities including structural racism, implicit bias, and institutionalized neglect of the poor and other marginalized groups such as people with disabilities (22). Effective care delivery requires local examination of clinical performance data, root cause analyses of inequities in partnership with patients and communities, design and implementation of interventions that address those root causes, and payment reforms to support and incentivize those care transformations (10,13,15). Unfortunately, the diabetes care provided to millions of Americans fails to meet these basic elements of quality care, with corresponding damage to population health (8,23).
THE FUNDAMENTAL PROBLEM WITH THE U.S. HEALTH CARE SYSTEM: IT DOES NOT PRIORITIZE THE LONG-TERM HEALTH AND WELL-BEING OF ALL INDIVIDUALS AND COMMUNITIES
Our Health Care System Undervalues Prevention of Disease and Complications and Provides Insufficient Access to Health Insurance and Health Care Services
Type 2 diabetes is a chronic condition that is preventable with lifestyle changes in nutrition and physical activity (24). Once diagnosed, type 1 and type 2 diabetes require a renewed commitment to lifestyle changes, regular laboratory testing, and medication management. We know that the long-term complications of diabetes unfold over decades after diagnosis; the risk of those complications can be reduced by early intensive treatment of the disease (25). A proficient health care system for diabetes would ensure continuity of access to both lifestyle and health care services during all stages of the disease. Instead, the U.S. health care system is highly fractured, with health insurance coverage that is highly variable, inconsistent, and dependent on age, income, and employment, indicating numerous switches in health insurance and benefits over their lifetime among people living with diabetes. Millions of working-age Americans will experience uninsurance spells that interrupt disease management (26). The current U.S. system provides a federally financed universal health insurance scheme through Medicare only for those aged ≥65 years, the period in life when expensive complications of diabetes are most likely to occur and most likely to prove recalcitrant to treatment interventions.
That Same System Imposes Perverse Incentives to Avoid Caring for Under-Resourced, Marginalized Individuals
Widely differential reimbursement rates across payers provide another core concern regarding which greater transparency and concerted policy action are required. Despite the presence of the Medicaid program—a U.S. government–funded health insurance program for low-income individuals, families, and children—Medicaid reimbursement rates remain far below those of Medicare, let alone those of the most attractive private payers. Medicaid further imposes punishing administrative burdens on many providers (27). The combination of these factors (and the continuing financial challenges faced by uninsured patients) deepens the incentives for health care delivery organizations either to avoid caring for the underinsured or to provide lower-quality care to these patients (28). Such practices, though predictable from an economic perspective, directly conflict with clinicians’ ethical obligations. They are also corresponding contributors to providers’ experiences of moral injury and burnout (29). Health insurance, financing, and payment policies frequently compartmentalize individuals into categories that do not make clinical sense and fragment the health care system in ways that undermine population health. Some patients with diabetes receive comprehensive, integrated care, while others must navigate a patchwork of disconnected programs. Simply by virtue of the age of eligibility for Medicare, an uninsured 64-year-old patient with diabetes is much less financially desirable for a health care delivery organization to care for than that same person would be only 1 year later.
That System Does Not Address SDOH
Transformative health care requires a fundamental shift toward viewing social and economic security as foundational elements of health. Poor health is often a consequence of social, economic, and environmental inequities across the life course (19). Structural racism and economic deprivation underpin neighborhood life expectancy gaps, with marginalized communities bearing a disproportionate burden of preventable illness and premature death. Managing diabetes in these communities is more challenging because of inadequate access to quality education and employment opportunities, nutritious food, stable housing, and reliable transportation and more environmental hazards. This paradigm shift requires social, economic, and environmental policies for addressing the upstream determinants of health rather than solely reacting to the consequences of disease. Western European democracies have a greater proportion of total health and social services expenditures spent on social services, with better health outcomes than in the U.S. (30,31), despite generally lower per capita incomes than pertain across the U.S. (32). For example, the per capita income in Germany is roughly the same as in Mississippi. Yet, Germans live nearly a decade longer (30).
That System Prioritizes Short-term Financial Gain Over Long-term Population Health
Based on its current structure, our health care system does not value or prioritize the long-term health and well-being of all individuals and communities (14,33) and does not realize the full social return on health care investments (34). Instead, despite attempts to move toward value-based care, the system still largely rewards and incentivizes the provision of a high volume of services to a more profitable payer mix of privately insured patients, as opposed to implementation of effective diabetes population health care models. The system prioritizes short-term financial gain over medium- and long-term population health.
CONCEPTUAL MODEL OF POLICY ACTIONS TO FIX A BROKEN HEALTH CARE SYSTEM
Figure 1 shows a conceptual model of policy actions to fix a broken health care system. The model assumes a life course perspective of considering the progression of life from children to adults to older adults. The model also includes consideration of the spectrum of diseases, conditions, and syndromes from risk factors to condition to complications to end stage. Policies should be explicitly designed to improve prevention and holistic treatment, support, and palliation, within a continuous, integrated, cohesive health care system that effectively cares for people across the life course and spectrum of illness. As described by the World Health Organization, structural drivers of health and SDOH play major roles impacting health outcomes (35). The drivers include socioeconomic and political contexts, socioeconomic position, and the social and material circumstances in which people grow, live, work, and age.
Figure 1—
Conceptual model of policy actions to fix a broken health care system.
Three intertwined elements are foundational for understanding why the U.S. health care system is built the way it is and what changes are necessary to improve it: 1) ethics and culture; 2) political economy, the underlying political and economic structures that shape our nation and, in turn, our health; and 3) the definition and measurement of value in health care. These three foundational elements influence the policies that determine insurance eligibility and coverage and the financing and payment of care. Ideally policies should be designed to support, incentivize, and sustain effective population health models that address medical, social, psychological, and behavioral needs of all individuals and communities to improve the outcomes of people with diabetes. In this article, we focus on the health care system’s role in addressing medical drivers of health and SDOH.
A key concept is that each component of the conceptual model must be addressed to achieve the most impactful reform. Major fundamental improvements in health insurance and payment policies are unlikely without good governance of the political economy to align the market with the public good. Principles of good governance in health care policy will be difficult to achieve unless the nation’s predominant ethics and culture include truly valuing and prioritizing the health and well-being of all individuals and communities. Such an ethos would drive equitable access enabling health care resources to be distributed according to need. Synergistic relationships are also needed between health insurance and payment policies for achievement of optimal population health at costs affordable to society. For example, diabetes prevention efforts involving lifestyle are highly cost-effective, often with some insurance coverage (36,37), but are generally underfunded and underreimbursed (38). Waste in the health care system—failure of care delivery, failure of care coordination, overtreatment or low-value care, pricing failure, fraud and abuse, and administrative complexity—accounts for approximately one-quarter of total health care spending (39). Thus, our recommended policies could be enacted to maximize health and well-being for all with existing resources, if leaders and the public support this goal and implement principles of good governance.
Ethics and Culture
The U.S. health care system does not embody ethical justice principles in which people are treated fairly and equitably; health-related benefits, risks, costs, and resources are distributed inequitably.
Ethics and the Ethical Distribution of Resources
Ethical principles can provide guidance in fixing our health care system (40): 1) Maximizing benefit and preventing harm. This principle applies in multiple circumstances (e.g., scarce resource allocation); it can compel health care systems to move toward health promotion and disease prevention and away from mere treatment of disease. 2) Prioritizing the disadvantaged. Those who are at increased risk for worse health outcomes should be first in line—not last. “Disadvantaged” may be circumstance specific and “the disadvantaged” may involve multiple populations. If we consider the coronavirus disease 2019 pandemic, disadvantaged groups included those with increased medical risk, older people, people with high-risk living conditions or employment, and people at place-based risk because of the physical neighborhood in which they lived. 3) Equal concern. This means treating all patients with the same care, dignity, and quality. Ethics principles are at times in conflict and will need to be prioritized based on the desired outcome (e.g., a fair, equitable health care system).
Ethics can provide guidance about fairly and justly allocating health care resources. There are many definitions of a fair distribution of resources, including the following: to each person an equal share, to each person according to individual need, to each person according to individual effort, to each person according to societal contribution, and to each person according to merit (40). The U.S. culture’s emphasis on individualism often leans toward resource allocation based on individual effort; i.e., health care insurance is largely based on employment and income, military service, or retirement from civil society. Insurance for the poor, on the other hand, has been a source of debate since the inception of Medicaid.
However, an ethical framework of distributive justice calls for fairness defined based on individual need, with the argument that low-income people and other socially marginalized groups should receive resources to increase their chances of living a full life (41). While some have focused on health care solutions, such as universal access to health insurance and health care, as ethical resource distribution mechanisms to improve health equity (42), it can be argued that social care solutions are as important to health equity because of the interrelatedness of material needs (e.g., income, food, housing) and health, particularly for marginalized populations. For example, food insecurity has been associated with worse diabetes outcomes, including glycemic control and hospitalizations for hypoglycemia (43-45). While addressing SDOH should not be medicalized by the health care system (46), it should not be ignored by the health care system either. Ethics can serve as guidance to health care institutions as they seek to fairly allocate limited resources in ways that maximize the health of entire communities and, in so doing, advance health equity.
Cultural Shifts
Culture encompasses social values and beliefs as well as the institutions, laws, and policies that reflect these values and beliefs. Our current health care system is a reflection of many values we hold as a society. To realize significant, sustainable changes to our health care system, we will need to make substantial cultural changes as well. First, we will need to see equity in general (including health equity) as a common good, not something that only benefits marginalized populations. For example, countries with significant income disparities have worse educational and health outcomes for the overall population, not just for those who have low incomes (47-49). Addressing excess health care costs attributed to racial disparities saves money for all populations, not only for racially minoritized groups (50). Moving away from a zero-sum approach toward a coalition-based strategy will be necessary for making gains toward an equitable health care system (51).
We will also need to recognize investments in education and the social safety net as investments in health. Bolstering our safety net can result in a stronger, healthier population with fewer chronic diseases. By changing cultural norms about social drivers and population health, we might be able to 1) garner more broadbased support for social service programs and agencies, which will be needed if social care programs are to work effectively, and 2) prioritize health promotion and disease prevention within health care systems.
In the U.S., cultural norms primarily focus on individual responsibility in behavioral choices rather than on the environmental circumstances that constrain choices and determine exposures. This narrow focus encourages blaming patients for their illnesses and limits our collective ability to pursue more comprehensive solutions. Moving away from the “rugged individualism” that has defined the U.S. to a more systems-based approach can help improve equity and outcomes and reduce further stigmatizing of marginalized populations.
Although diversity has recently become a controversial term, the U.S. is historically a country of immigrants, a diverse group of people; out of many, come one. E pluribus unum. Returning to our nation’s roots as a country whose strength lies in our diversity will be sociopolitically important as we move to fix our broken health care system. It will also be strategically important because diversity provides a competitive edge. Diverse viewpoints lead to more innovation and more comprehensive problemsolving (52,53). And a diverse workforce is better able to meet the needs of heterogenous patient populations (54,55).
Similarly, our country needs to address racism collectively with a commitment to truth and reconciliation. The U.S. has refused to heal its historic racial wounds, particularly anti-Black racism as related to slavery, racial apartheid, and the persistent social and structural manifestations of racism in current-day life. Other countries, including South Africa, Germany, and Rwanda, have had national processes to hear about the impact of forced oppression from the affected people themselves, and have had processes in place for national reconciliation. In these countries the painful, yet truthful, history is incorporated into the curriculum so that future generations learn how to do better nation building. The U.S. is on a course quite the opposite, with revisionist historical narratives, large-scale book bans, removal of archival data, and mandated curricular changes. It will take a wide-eyed clarity of truth, vision, and purpose, and a commitment to reconciliation, fairness, and justice, to make meaningful cultural changes in terms of how the U.S. should view racism: as an outdated tool of oppression that is restraining our nation’s potential in every sector, including health and medicine. While racism is the social identity that has the largest signal in the U.S., marginalization and oppression occur for populations on the basis of sex, gender identity, sexual orientation, nationality, immigration, religion, poverty, disability, and many others and should be addressed.
Political Economy
Our Political and Economic Structures Have Produced a Health System That Is Extremely Expensive, Inequitable, and Fragmented
A major reason for the dysfunction that plagues the U.S. health care delivery is the political economy that undergirds the system, characterized by a weak and ineffective governing structure that attempts to incentivize and regulate an extremely powerful private sector.
Since the 1980s the U.S. has enacted numerous health system reforms aimed at increasing competition in health care. For example, the Medicare Modernization Act (Medicare Prescription Drug, Improvement, and Modernization Act of 2003) created Medicare’s Part D prescription drug benefit program, which introduced private plans to provide drug coverage to Medicare beneficiaries with the intent of encouraging competition between private insurers offering Part D plans, as well as the Medicare Advantage (MA) program (Part C) allowing private insurers to offer all Medicare benefits, to encourage competition in Medicare. The Health Insurance Portability and Accountability Act (HIPAA) (1996) was also supposed to encourage competition by making it easier for individuals to switch insurance plans without being penalized for preexisting conditions, and thereby allowing consumers to shop for better health plan options. While these reforms introduced more health plan choices for some Americans, they have not produced the promised outcomes of competitive reforms—lowering costs and improving quality and access.
One of the reasons for this failure is that consolidation has led to increased financial burdens for patients. For every major sector of the health care system there has been significant consolidation: hospital systems, physician practices, health insurance, and pharmaceutical and drug distribution. Today, for example, the top five health insurance companies control 80% of the market. Numerous studies confirm that consolidation leads to higher prices for services, often without enhancing quality or access to care, and in some cases, even having negative impacts (56-59).
Why would competitive reforms lead to consolidation? One key reason is the lack of investment in a strong governing structure to assure that the basic elements of competition exist: price transparency, antitrust enforcement, quality standards, and benchmarking to address information asymmetry by virtue of which consumers are unable to adequately assess quality in health care. While the U.S. has regulations pertaining to each of these elements, they are often weak and ineffective. Although the American public tends to favor private provision, they distrust government and kneecap administrative efforts to govern private provision effectively (60-62). For example, while mergers and acquisitions were increasing exponentially from 2010 to 2020, large insurers, pharmaceutical companies, and hospital chains hired expensive legal teams to challenge the legal efforts of the Federal Trade Commission (FTC), while FTC’s capacity remained stagnant (63). Due to lack of capacity, FTC pursued only one enforcement action and three merger actions per year from 2000 to 2022 (64).
A critical cultural shift that needs to occur is recognition that no matter what health care system the U.S. creates—even a competitive one meant to encourage competition among private actors—investment in administrative governance is essential to ensure that the system runs as intended. To enable this cultural shift, we need to leverage a political economy of health framework. Such a framework reveals not only who benefits medically but also who benefits politically and financially. Drawing from early theorizing on political economy, a political economy of health framework highlights the connections among capital accumulation, economic exploitation, class struggle, and health (65). It recognizes the role of the state in regulating, deregulating, and allocating social spending (66). Finally, it helps identify the tensions between and within market-driven approaches and public-driven approaches to health care policy.
We need to draw on a political economy of health framework to develop better policy and regulatory action that identifies where power is being exploited. While the Inflation Reduction Act of 2022, for example, capped insulin out-of-pocket costs for Medicare recipients, a handful of pharmaceutical companies still dominate the U.S. insulin market and have leveraged their oligopoly power. U.S. patent law enables these companies to secure patents on minor modifications to insulin formulations, effectively blocking competitors from developing biosimilars (67,68). States that have attempted to cap out-of-pocket insulin costs have been met with lawsuits from pharmaceutical firms (69). These companies have also deployed extensive lobbying efforts to resist legislative attempts to curb their pricing power. In fact, pharmaceutical and health product manufacturers spend more on lobbying activities ($308.4 million) than any other health care industry (70).
A political economy of health framework would also help inform the role of public funding of the health care delivery system. Most other countries rely primarily on public funds to provide capital investments for infrastructure improvements. In the U.S., capital investments have been almost entirely shifted to the capital markets since 1965. As a result, when financial markets change, this impacts investments in health care. For example, private equity firms have made enormous inroads in health care, with growing concern due to incentives of private equity to generate financial returns on investment quickly (56,71). While there is growing evidence of adverse patient effects emerging from the practices of private equity leverage buyouts (72-74), there is no evidence of the massive infusion of private capital solving the problems of maldistribution of health care personnel and infrastructure. Thus, in thinking about how to fix a broken health care system, central to a reform agenda must be how public funds can used to rebuild a more fair and equitable health care delivery system (75). By using a political economy of health framework, we can ask important questions about ownership and mission of proposed programs and policies, as well as who benefits across the spectrum—not just the target population but also the producers and distributors of the program or product.
How We Define and Capture the Value of Health Care
Health Care System Does a Poor Job of Measuring, Prioritizing, Supporting, and Incentivizing Valuable Care
Traditional clinical performance metrics used in value-based payment programs, at best, represent a modest attempt along a spectrum of possibilities for how to differentially value care and map to payment (34), and often a poor job is done with these metrics in measuring population health (76-79). For example, Centers for Medicare & Medicaid Services performance metrics and clinical guidelines often do not reflect the latest cost-effectiveness evidence (80) and are often dominated by disease-specific measures that do not capture overall health and well-being. Many policymakers de facto stress cost saving rather than cost-effectiveness or care value in their actions, especially for economically marginalized groups with limited political power, such as people with Medicaid (28). Equity is often left undiscussed in defining and operationalizing the value of health care.
The System Does Not Explicitly Weigh Trade-offs Among Competing Factors and Values
Measuring value requires careful consideration of trade-offs among various factors, such as health gains, economic costs, effects on health disparities, and care delivery and implementation (81-84). However, quantifying these factors, integrating them into a coherent framework, and systematically measuring preferred strategies remain challenging.
Use of conventional cost-effectiveness analysis (CEA) provides a formal assessment in quantifying the relative costs and benefits of alternative interventions (85). The aim of CEA is to illuminate the potential trade-offs and inform discussions of whether the additional resources demanded by a health intervention (over an alternative) are worth the additional health benefits produced. Since the 1990s, the number of CEAs has increased significantly, covering diverse diseases and interventions. Many other countries have incorporated health technology assessment frameworks that include CEA to guide reimbursement, benefit design, and pricing decisions (86).
In the U.S., however, the use of CEA to inform health care decisions faces resistance from policymakers, the pharmaceutical industry, and specific constituencies of patient advocates. The fragmented U.S. health care system discourages broad consideration of resource allocation, while public opposition to perceived rationing further limits adoption. Methodological challenges, including reliance on extrapolated trial data, limited real-world applicability, and subjective analytic choices, have contributed to skepticism. Specifically, CEA has often been criticized for the use of the unit of measure quality-adjusted life-years (QALYs)—a conventional measure of valuing health improvement that captures both longevity and quality of life into a single metric—with critics arguing that its use disvalues people with disabilities (87). While these critiques occasionally have merit (e.g., when CEA is misapplied in care for individuals with disabilities), this premise misrepresents how CEA is designed, to inform resource allocation decisions. Since QALY is a measure of how much a treatment improves a patient’s quality of life, the CEA of treatments for individuals with severe disabilities has the greatest potential to show substantial QALY gains, thus providing justification for higher prices. With use of QALYs the aim is not to value people (i.e., comparing people within treatments); rather, the aim is to compare the value of treatments within conditions. Furthermore, recent methodological advancements in developing other measures as alternatives to QALYs, such as equal value of life years gained (88), health years in total (89), and the Generalized Risk-Adjusted Cost-Effectiveness (GRACE) approach (90), could help address some of these methodological criticisms.
PATHS TO IMPROVEMENT: KEY POLICY ACTIONS
We provide recommendations that would help fix the broken U.S. health care system, grouped by key elements in the conceptual model and short, medium, and long-term time horizons. While some incremental reforms are more easily attained, most major transformations in health care policy are difficult to achieve unless each component of the model is addressed.
Ethics and Culture
Anchoring Health Care in Ethics and Justice
Health care resources can be allocated most ethically and fairly based on need—disproportionately serving those with higher risk of disease and existing burden of disease (Table 1). We need to develop methods and tools that can be used to risk stratify patients based on both social and medical needs in order to prioritize patient populations in need of additional resources, e.g., the resources of case managers and behavioral specialists and other elements of multidisciplinary teams to address the social and medical needs in an integrated, holistic way. Health care systems can also embrace other core principles of maximizing benefit and limiting harm, equal concern, and prioritizing the disadvantaged. One model that has shown success for how health care systems can ground their work in fairness and justice, and help revitalize their communities, is the Anchor Institutions model (91,92). Participating health care systems partner with community organizations and invest part of their portfolios in local businesses and organizations to act as “economic engines to improve community well-being” and address the SDOH.
Table 1—
Ethics and culture recommendations
| Reform area | Explanation | Examples |
|---|---|---|
| Anchoring health care systems in ethics and justice | Make overarching mission of health care system to maximize health and well-being of all individuals and communities over the long-term. Use guiding ethical principles of distributive justice, equal concern while prioritizing the disadvantaged, and maximizing benefit and limiting harm. | Risk stratify patients based on medical and social need to most fairly allocate health care resources. |
| Use part of investment portfolio to invest in local businesses and community organizations. | ||
| Work on value change and policy change simultaneously | Purposefully designing health care systems that reduce the barriers and administrative hassles that all patients face can improve society’s views and values about such systems. | Robert Wood Johnson Foundation Culture of Health translated into actionable steps: 1) making health a shared value; 2) fostering cross-sector collaboration; 3) creating healthier, more equitable communities; and 4) strengthening the integration of health systems and services (156,157). |
| Communicate about health equity policies emphasizing values and benefits for all | American society values health equity, yet public and private policies have frequently not been enacted to put these overarching health goals into practice. Part of the problem has been effective communication and messaging. Studies of diverse populations across the political spectrum have identified the best ways to communicate around health equity. | 1) Lead with values. 2) Start with need rather than any categorical identity. 3) Focus on solutions for those with the greatest needs. 4) Emphasize how everyone benefits from equity efforts and that it is not a zero-sum game (51). |
| Have honest conversations about structural inequity and social marginalization | Have honest discussions about how racism, classism, bias (99), and other systems that harm marginalized groups increase health disparities (158). Recognize that structural racism, classism, sexism, homophobia, ableism, ageism, and other systemic ways of harming marginalized groups are major drivers of health. | 1) Talk about race as a social construct before talking about racism. 2) Explain that racism exists within a larger framework and intersects with other kinds of marginalization. 3) Engage in discussions about structures and systems—not just interpersonal issues. 4) Teach about solutions and how to be leaders and advocates. |
| Authentically engage communities about culture change | Partner with patients and communities authentically in efforts to develop, implement, and monitor solutions and change the culture around health and health care. | Engage with trusted media sources (e.g., radio, podcasts, television, social media). |
Work on Value Change and Policy Change Simultaneously
Changing attitudes and changing policies are mutually reinforcing and may be most effective when embarked on simultaneously. Purposefully designing health care systems that reduce the barriers and administrative hassles that all patients face, but which disproportionately burden those with limited resources, can improve the culture within health care systems and society’s views about the added value of such system changes. For example, when clinics have evening and weekend hours to better accommodate patients with limited job flexibility or childcare support, the system becomes more accommodating to all patients.
Communicate About Health Equity Policies Emphasizing Values, Needs, Tailored Approaches, and Benefits to All
Even though two-thirds of the American public agrees that “our society should do whatever is necessary to make sure that everyone has an equal opportunity to be healthy” (93) (i.e., American society values health equity), public and private policies have frequently not been enacted to put these overarching health goals into practice. Part of the problem is communication and messaging, a challenge exacerbated by the political partisan divide, misinformation, and decreased trust in science. Studies of diverse populations across the political spectrum have identified the best ways to communicate around health equity (94-96), consistent with the concepts of targeted universalism (97,98). Key communication principles include the following: 1) Lead with values (94). 2) Start with need rather than any categorical identity (95). 3) Focus on solutions for those with the greatest needs (95). And 4) Emphasize how everyone benefits from equity efforts and that it is not a zero-sum game (51). Use unity language such as “we” (94).
Have Honest Conversations About Structural Inequity and Social Marginalization
In this work honest conversations must be had about structural inequity and how it manifests in society writ large and our health care systems specifically to create disparities in health care and health outcomes by race, class, sex, gender, sexual orientation, immigration status, disability, and many other identities. Doing so will help identify specific opportunities within health care systems to create innovative solutions around equity. Several lessons for discussing racism (that can apply for other forms of marginalization) identified in the literature (99) include 1) talk about race as a social construct before talking about racism; 2) explain that racism exists within a larger framework and that it intersects with other kinds of marginalization; 3) engage in discussions about structures and systems, not just interpersonal issues; and 4) teach about solutions and how to be leaders and advocates.
Authentically Engage Communities About Culture Change
Efforts to change our society’s culture about health will need to engage diverse stakeholders, including individuals with and without regular sources of health care, health professionals, advocacy organizations, public health organizations, community-based groups, and trusted brokers within community spaces (e.g., local media). Collaborative efforts will need to be sustained over the long-term and involve a heterogenous group of populations.
Political Economy: Principles of Good Governance
Good governance is essential for the effective and ethical management of all health care systems whether they are primarily government owned and administered (e.g., the U.K. National Health Service) or primarily publicly financed with private provision in delivery and administration (e.g., U.S. system). There are six main principles of good governance that should be followed to help foster a stable, fair, and effective governance system: transparency, accountability, responsiveness, rule of law, equity and inclusiveness, and social return on public investments (Table 2).
Table 2—
Political economy recommendations: principles of good governance
| Reform area | Explanation | Examples |
|---|---|---|
| Transparency | Openness and clarity regarding decisions, processes, and actions are needed to ensure that stakeholders can access information about how decisions are made and the reasons behind them. | Existing complexity in the U.S. health care system obscures the flow of money and basic accountability: who pays what (taxation) and who receives what and how much (public funds). |
| Accountability | Those in positions of power must be answerable for their actions. Mechanisms should ensure they take responsibility for the outcomes of their decisions. | Accountability cannot be achieved without public investment in enforcement by agencies tasked with that job. |
| Responsiveness | Good governance requires that institutions respond to the needs and demands of their stakeholders. | Institutions should be flexible and adaptive to changing circumstances and maintain open communication channels. |
| Rule of law | Governance should be based on a legal framework that ensures fairness, equity, and justice. | Everyone, including leaders, must comply with established laws and regulations, which should be applied consistently. |
| Equity and inclusiveness | Good governance ensures that all individuals have opportunities to participate in decision-making processes and that no one is excluded. | System promotes fairness and social inclusion, particularly for marginalized or vulnerable groups, since their voices often remain silent. |
| Social return on public investments | Governance should advance the public good with specific, measurable social outcomes. Regulations should be evidence based for realization of intended social benefits. | Set clear objectives and monitor progress, such as universal access to drugs funded with public dollars (159). |
Measuring Value
Most current clinical performance metrics are narrowly disease specific. We recommend complementing disease-specific metrics with measures that capture 1) health and well-being of individuals and communities over the long-term, 2) social return on investment, and 3) efficiency integrated with equity (e.g., distributional cost-effectiveness analysis [DCEA]) (Table 3).
Table 3—
Measuring value of health care recommendations
| Timeframe | Action or policy | Examples |
|---|---|---|
| Short-term | Measure patient and community health and well-being (76,79). | Include population health accountability metrics such as the Institute of Medicine vital signs (76). Complement disease-specific process and outcomes measures (e.g., hemoglobin A1c) with measures of overall health, well-being, and function (e.g., “In general, would you say your health is excellent, very good, good, fair, or poor?”). |
| Emphasize health for all and improve care and outcomes for those patients and communities not doing well. | Examine performance measures with stratification by race, ethnicity, income, education, sexual orientation and gender identity, English language proficiency, and rurality. | |
| Standardize diabetes quality of care measurement across APM insurance contracts. | ||
| Medium-term | Shift from current emphasis on cost savings to prioritizing value (i.e., benefit/cost) (34). Explicitly measure social return on investment including health and economic benefits of interventions (34). |
|
| Long-term | Incorporate cost-effectiveness evidence along with distributional concerns and budget impact. | Establish national health technology assessment agency to better inform resource allocation decisions in health care, including value-based prices for price negotiations. |
Include Measures of Health and Well-being of Individuals and Communities Over the Long-term
Various organizations have recommended population health accountability metrics that would transform the health care system’s focus from the narrow workings of the hospital and clinic to the broader environments where people live, work, and play. For example, in Vital Signs: Core Metrics for Health and Health Care Progress, the 2015 Institute of Medicine vital signs included life expectancy at birth, self-reported health status, preventable hospitalization rate, unmet care need, teenage pregnancy rate, high school graduation rate, and addiction death rate (76). Performance metrics should be stratified by factors such as race, ethnicity, income, education, sexual orientation and gender identity, English language proficiency, and rurality, to identify populations, communities, and geographic areas for which additional and more specific support and assistance are needed to improve health outcomes.
Measure Social Return on Investment
Social return on investment is a framework for capturing the comprehensive health, economic, and social benefits of programs and what constitutes a healthy, productive nation (34). Example metrics include well-being, employment, academic performance, and environmental benefits. Traditional clinical performance measures tend to undervalue the benefits of health care programs, preventive measures, and primary care. For example, eliminating racial and ethnic health inequities and improving health for all in the U.S. in 2018 has been associated with estimated potential savings of $1.03 trillion, of which $421.1 billion is for racial and ethnic minorities and $608.7 billion for White individuals (50). For the racial and ethnic minorities, premature death accounted for two-thirds of the economic cost, excess medical costs 18%, and lost labor productivity 14%.
Integrate CEA With Equity Concerns (for Example, DCEA)
Although CEA is often criticized for overlooking health equity due to its primary emphasis on efficiency, a newer framework, known as DCEA, combines consideration of efficiency with equity concerns. Conventional CEA is rarely used to examine distributional impacts for populations, specifically, who gains, who loses, and by how much if the policy is implemented. Similarly, most studies on health disparities lack a cost-effectiveness component. DCEA is used to analyze the equity impact and equity-efficiency trade-offs to inform health care decision-makers about inequities in the resulting distribution of costs and effects (100,101). It can also inform trade-offs in efficiency objectives (i.e., improving total health) versus equity objectives (i.e., the impact on financial risk protection and reducing health disparities) (102). Since its introduction in 2015 (102-105), empirical applications to the U.S. settings have emerged. For instance, Medicare funding for coronavirus disease 2019 treatments appears to have improved overall population health and reduced disparities, yielding greater health benefits for socially vulnerable patients (106). Gene therapy for people with sickle cell disease provides a second instructive example. While the cost of such therapy may surpass conventional cost-effectiveness thresholds, it can still be considered an equitable therapeutic option according to DCEA standards, given the equity weight conventions applied in the U.S. (107). The application of DCEA could help divert limited resources from unnecessary payment for low-value services to more important health and equity-improving interventions.
Establish a National Health Technology Assessment Agency
In the U.S., a step forward would be establishing a national health technology assessment agency that formally incorporates cost-effectiveness evidence along with distributional concerns and budget impact. By providing transparent, scientifically rigorous, and deliberative processes to assess trade-offs among alternative health policies or interventions, such an agency could provide valuable information to better inform resource allocation decisions in health care, including value-based prices for price negotiations.
Health Insurance Eligibility, Coverage, and Financing
Our recommendations are based on five principles for health insurance in the 2004 Institute of Medicine report Insuring America’s Health: Principles and Recommendations: 1) health care coverage should be universal, 2) health care coverage should be continuous, 3) health care coverage should be affordable for individuals and families, 4) the health insurance strategy should be affordable and sustainable for society, and 5) health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient centered, and equitable (108) (Table 4).
Table 4—
How to attain principles of Insuring America’s Health: Principles and Recommendations*
| Timeframe/principle | Action or policy | Examples |
|---|---|---|
| Short-term | ||
| 1 | Increase enrollment of eligible individuals | Implement outreach and patient navigator efforts Remove administrative barriers to enrollment |
| 1 | Increase eligibility for Medicaid | Support Affordable Care Act expansion across states |
| 1 | Prevent discrimination based on preexisting conditions | Prevent rejection of insurance applicants based on preexisting conditions |
| 2 | Decrease churn whereby beneficiaries automatically drop off coverage each year | Automatic reenrollment of beneficiaries |
| 2 | Stabilize medication formularies | Decrease frequency of changes in which insulin is covered |
| 3 and 4 | Incentivize low-cost, high-value care | Incorporate VBID principles, such as lower co-pays for generic than for brand-name medications (109) Do not encourage high-deductible health plans that provide disincentives to valuable care (160,161). Provide affordable alternatives |
| 3 | Prevent price discrimination based on conditions | Group insurance rates |
| 3 | Price transparency | No surprise billing (162) |
| 5 | Cover effective services | Legislate full coverage of specific preventive and treatment services with a strong evidence base regarding effectiveness and value for all beneficiaries, no matter their insurance type |
| 5 | Decrease denial rates of medically necessary services | Transparent, evidence-based use review criteria |
| Medium-term | ||
| 1 | Simplify Medicaid program and increase the public’s power and influence | Simplify Medicaid eligibility criteria (e.g., no need for 20 complex categories) (163) Decrease differences in federal Medicaid rates across different eligibility categories to create more unified public constituency |
| 2 | Increase eligibility options for patients out of work | Insurance marketplace options with adequate premium subsidies based on income and family size |
| 2 | Broaden age eligibilities | Lower age to qualify for Medicare |
| 3 | Prevent adverse selection whereby health insurers carve out healthy, less expensive individuals | Group health insurance with shared risk and average premiums |
| 4 | Integrate cost-effectiveness evidence to ensure that value-based decisions remain financially viable and actionable within health care systems | Inflation Reduction Act of 2022 Medicare Drug Price Negotiation Program (118) |
| Use DCEA principles | New York Medicaid High Cost Drug Initiative (119,120) | |
| 4 | Integrate health insurance with APMs (see Table 5) | Total cost of care models |
| Long-term | ||
| 1 and 2 | Provide financial access for everyone to necessary, appropriate, and effective health services at all ages, irrespective of employment status | Universal health insurance |
1, health care coverage should be universal; 2, health care coverage should be continuous; 3, health care coverage should be affordable for individuals and families; 4, the health insurance strategy should be affordable and sustainable for society; 5, health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient centered, and equitable. *Principles of 2004 Institute of Medicine report Insuring America’s Health: Principles and Recommendations (108).
Health insurance policy reforms have been proposed across the political spectrum. They range from expanding Medicare and Medicaid eligibility and coverage to requiring employers to provide health insurance with premium subsidies for low-wage workers, mandating individuals to purchase policies with subsidies based on income and family size, single-payer systems administered by the federal government that provide comprehensive benefits to all people and are paid for by taxes, and endless variations of these and other mechanisms (108). Different proposals vary regarding whether health insurance is voluntary or mandated and inclusive of broad populations or targeted to those with the greatest needs. Proposals differ on the degree to which the current health insurance system is preserved versus new programs are created and whether or how patients with more medical and social risk are protected. A comprehensive analysis of different policy approaches is beyond the scope of this article. However, as recommended in the report Insuring America’s Health: Principles and Recommendations, we believe the nation’s goal should be to achieve the five principles for health insurance and those principles should be the criteria by which health insurance reform proposals are judged (108). Table 4 provides examples of how the principles can be further achieved.
Some actions are incremental and can be implemented immediately, such as increasing enrollment of eligible people by decreasing administrative barriers and funding outreach navigators or implementing value-based insurance design (VBID) as a consumer-facing intervention (109). VBID aligns patient cost sharing (i.e., coinsurance, co-payments, and deductibles) with the clinical value—not cost—of care (110). By lowering or eliminating financial barriers to high-value care, such as lowering co-pays for generics or imposing $35 monthly caps for insulin, VBID incentivizes patients to use high-value care. Also, by increasing cost sharing for low-value or unnecessary services (e.g., brand-name drugs or imaging for low-back pain with no high-risk symptoms or signs), VBID discourages the use of low-value services (111). VBID can be further tailored to offer targeted benefits (e.g., provision of produce prescription programs [112]) to certain population subgroups (e.g., individuals with food insecurity and diabetes). VBID has been shown to improve medication-taking behaviors (113), lead to greater use of cost-effective alternatives in a drug formulary (114), reduce the use of low-value diagnostic services and surgeries (115), and mitigate health disparities among minority groups (116). In contrast to a “one-size-fits-all” cost-sharing approach, such as high-deductible health plans, that could reduce the use of high-value services and potentially worsen health disparities, V-BID could be one potential strategy to promote equitable access to essential services (117).
State innovations could inform national policies. For example, the Inflation Reduction Act of 2022 Medicare Drug Price Negotiation Program selected drugs with some of the highest total Medicare Part D expenditures (118). The New York Medicaid High Cost Drug Initiative negotiates drug pricing for some of the most expensive medications on the formulary based on therapeutic value and value-based reference pricing techniques including CEA (119,120).
Other recommendations have a longer time horizon and on-ramp such as universal health insurance and incorporation of principles of DCEA (101). Other policies provide high value, with affordability for patients, effectiveness of services, and sustainability for society taken into account. Considering the political economy, marginalized groups generally have limited power to influence health insurance policy. One way to increase the public’s power to hold policymakers accountable for population health, while also simplifying administrative complexity, is aggregating different categories of Medicaid eligibility. Some Medicaid beneficiaries, such as individuals with intellectual and developmental disabilities and individuals with long-term care eligibility, have more political support than other Medicaid beneficiaries (121,122). Aggregated categories protect those beneficiaries with limited political power.
Value-Based Payment and Alternative Payment Models
The aim of our recommendations for value-based payment and alternative payment models (APMs) is to prioritize the health and well-being of individuals and communities and cost-effectiveness of care, with payer and provider market incentives explicitly aligned to support these values beyond short-term financial gain to health care systems and investors (109,123-126) (Table 5).
Table 5—
Value-based payment and APM recommendations
| Timeframe | Action or policy | Examples |
|---|---|---|
| Short-term | Reward patient and community health and well-being (76,79) | Include population health accountability metrics such as the Institute of Medicine vital signs including life expectancy at birth, self-reported health status, preventable hospitalization rate, unmet care need, teenage pregnancy rate, high school graduation rate, and addiction death rate (76) Tailor metrics for heterogeneous older population, including those with limited life expectancy, for whom measures such as quality of life, independence, well-being, and individualized treatment goals might be most important (127) Reward prevention, including healthy lifestyle (128) |
| Include accountability metrics that provide incentives for all health care delivery organizations to realistically improve | Reward combination of attaining absolute performance thresholds and improving performance | |
| Reward improving care and outcomes for populations receiving worse quality of care and/or with worse health outcomes (164,165) | Reward reduction in health disparities and improvements in health equity; Blue Cross Blue Shield of Massachusetts (166,167) | |
| Coordinate performance incentives with flexibility of up-front funding (e.g., global payments, capitation, per member per month, bundled payment) in APMs to drive care transformation to maximize population health for everyone, everywhere (124) | CMMI and private payer models (109) | |
| Risk adjust payment for medical and social risk of beneficiaries and patients (131,132) | Massachusetts Medicaid (MassHealth), Blue Cross Blue Shield of Massachusetts, CMMI Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) (168) | |
| Prevent profiteering and the bleeding of funds from caring of patients and communities | Health plans/managed care organizations: medical loss ratios with at least 80%–90% of premiums going toward health claims and quality improvement rather than administration, marketing, and profits Analogous requirements that large portions of health care dollars be kept for patient care, prevention, and care improvement rather than serving as profit to shareholders |
|
| Reform physician pay schedule using unbiased, rigorous data, science, and analysis to create fair fees for cognitive specialties (e.g., primary care, endocrinology) in comparison with procedure-oriented specialties | Form payment commission separate from the American Medical Association RUC (130) | |
| Medium-term | Shift toward total cost of care models | Maryland Total Cost of Care model (133), Vermont All-Payer Accountable Care Organization Model (169), Pennsylvania Rural Health Model (170), CMS AHEAD Model (171) |
| Shift toward all-payer models that create similar rates across payers | Maryland Total Cost of Care model (133), CMS AHEAD Model (171) | |
| Reward social return on investment (34) | Collaborative Approach to Public Good Investments (172) | |
| Long-term | Implement payment models that reward high-value, high-quality, equitable, and efficient care, guided by tools such as DCEA that incorporate equity and budgetary concerns |
CMMI, Center for Medicare and Medicaid Innovation; AHEAD Model, States Advancing All-Payer Health Equity Approaches and Development Model; CMS, Centers for Medicare & Medicaid Services.
Reward the Health and Well-being of Individuals and Communities and Social Return on Investment
Incorporate general health and well-being performance metrics and social return on investment measures into payment programs to complement disease-specific measures (Table 5). Tailor metrics for a heterogeneous population of older people (29.2% of people aged ≥65 years have type 2 diabetes), including those with limited life expectancy, for whom measures such as quality of life, independence, well-being, and individualized treatment goals might be more important than disease-specific measures (127). Reward prevention, including healthy lifestyle, consistent with President Donald Trump’s Make America Healthy Again initiative (128).
Reward Combination of Attaining Absolute Performance Thresholds, Improving Performance, and Reducing Health Disparities and Health Inequities
Create incentives that health care delivery organizations can realistically attain with dedicated improvement efforts (129).
Reform Physician Pay Schedule Using Unbiased, Rigorous Data, Science, and Analysis to Create Fair Fees for Cognitive Specialties (for Example, Primary Care, Endocrinology) in Comparison With Procedure-Oriented Specialties
Current physician fee schedules based on the recommendations of the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC) are not based in rigorous evidence and science (130). The National Academies of Sciences, Engineering, and Medicine report Implementing High-Quality Primary Care: Rebuilding the Foundation of Health Care recommends establishing an independent commission to objectively create an unbiased physician fee schedule based on rigorous science (130).
Risk Adjust Payment for Medical and Social Risk
Create a level playing field so that health care delivery organizations can develop and implement the systems of care necessary to meet the medical and social needs of under-resourced, marginalized populations. Create incentives to care for these groups rather than cherry-picking more advantaged, financially profitable patient populations (131,132).
Shift Toward Total Cost of Care, All-Payer Models That Can Better Leverage and Incentivize Up-front, Flexible Funding for Optimal Care Transformation and Improve Access for People With Medicaid Insurance
Health care delivery organizations frequently like the flexibility that comes with funding that allows them to direct resources to where they can best improve care and outcome. Examples of flexible up-front funding include capitation, global payments, per member per month payment, and bundled payment. Among types of up-front funding, some payment structures create stronger incentives to transform care to improve population health. For example, the Maryland Total Cost of Care program holds the state responsible for the total cost of care of Medicare beneficiaries and provides each hospital a global budget. Thus, hospitals have incentives to keep the population healthy and reduce costly emergency department visits and hospitalizations. Interim results show decreases in emergency department visits and hospitalizations, decreased disparities in preventable hospitalizations by race and place, and $689 million in net savings to Medicare from 2019 to 2021 (133). Total cost of care programs need to account for special circumstances such as academic medical centers’ case-mix complexity; Maryland has supplemented global hospital budgets with “complexity and innovation payments” to Johns Hopkins Hospital and the University of Maryland Medical Center (134). Maryland also has an all-payer system where all insurers pay the same rate, which diminishes the incentive for health care delivery organizations to avoid caring for patients with lower-reimbursing insurance.
Prevent Profiteering and Bleeding of Funds From the Caring of Patients and Communities
Health plans and managed care organizations have medical loss ratio requirements; at least 80%–90% of premiums must go toward health claims and quality improvement rather than administration, marketing, and profits (135). Financialization of health care and the rise of private equity have raised concerns about excessive extraction of funds and resources from the health care sector to shareholders and decreased quality of care (72,136). With requirements analogous to the medical loss ratio such as limits on how much debt can be leveraged and regulations to prevent asset stripping, large portions of health care dollars could be kept for patient care, prevention, and care improvement rather than serving as excessive profit to shareholders (137).
Ultimately Implement Payment Models That Reward High-Value, High-quality, Equitable, Efficient Care, Guided by Tools Such as DCEA That Incorporate Equity and Budgetary Concerns
SDOH
The aim of our recommendations is to better integrate care and payment models to address medical drivers of health and SDOH and advance justice (19,33,138,139) (Table 6). We focus mostly on how the health care system can address individual health-related social needs and also authentically partner with social sectors and community organizations to share power and resources in coalitions that can most effectively address SDOH.
Table 6—
SDOH Recommendations*
| Timeframe | Action or policy | Examples |
|---|---|---|
| Short-term | Expand Medicaid flexibility to cover health-related social needs (e.g., Section 1115 waivers [173], in lieu of services that are medically appropriate and cost-effective [174,175], required social needs screening of beneficiaries [174]) [135,146] | Fund housing, nutrition, and transportation via Medicaid |
| Require SDOH screening in primary care | ||
| Massachusetts, North Carolina, and Oregon Medicaid 1115 waivers (142,176) | ||
| California 1915(b) waiver for in lieu of services | ||
| Fund infrastructure for screening and referral for health-related social needs | CMMI Accountable Health Communities (177-180) | |
| Require screening for health-related social needs | CMS screening of hospitalized patients for food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety | |
| Implement clinical performance metrics for screening and referral for health-related social needs and link to payment | CMMI Making Care Primary Model (181) | |
| Integrate community health workers and social service navigators | Reimburse community health workers through Medicaid/Medicare Train clinicians on SDOH interventions |
|
| Include social care services in the medical loss ratio for health plans to encourage coverage (requirement that 80%–90% of premium income be spent on health care claims and quality improvement rather than administration, marketing, and profits) (135) | Arizona, Massachusetts, North Carolina, Oregon, Pennsylvania, Texas (135) | |
| Use mechanisms in value-based payment and APMs to address SDOH (Table 5) | ||
| Ensure funding for community-based organizations partnering with health care system to address SDOH (146) | ||
| Recognize that one-size-fits-all approaches to addressing SDOH are less likely to succeed than interventions tailored to specific populations and communities (139) | Account for marginalization, such as the intersection of race/ethnicity, immigration status, poverty, and geography; e.g., discrimination and racial residential segregation impact housing solutions | |
| Medium-term | Develop and implement models to blend and braid funding streams from the health and social sectors to address health-related social needs (147,148) | North Carolina Healthy Opportunities Pilots (150) |
| California’s CalAIM initiative (151) Western Idaho Community Health Collaborative (152) |
||
| Establish regional health equity funds (182,183) | Pool public/private funds to support community-led programs for housing, food, and wellness Prioritize high SVI areas (184) |
|
| Expand health care Anchor Institutions | Place-based business approach to building community health and wealth by means of local hiring, investing, purchasing, and community engagement (91) | |
| Long-term | Enact universal health coverage with equity metrics | Embed SDOH supports (housing, nutrition) in benefits Tie funding to equity benchmarks |
| Create a federal health equity fund | Tax sugary beverages, tobacco ($10 billion per year) (36,185-187) Fund community-led programs for housing, food, and wellness in high SVI areas |
|
| Adopt Health in All Policies mandate (153) | Require HIAs for legislation Align family, housing, education, and labor policies with health equity goals |
CMMI, Center for Medicare and Medicaid Innovation; CMS, Centers for Medicare & Medicaid Services; HIAs, health impact assessments; SVI, Social Vulnerability Index. *Recommendations focus mostly on how the health care system can address individual health-related social needs, and also authentically partner with social sectors and community organizations to share power and resources in coalitions that can most effectively address SDOH.
Develop Innovative Financing Model and Policies That Incentivize Investments in and Cross-Sector Collaboration for Health-Related Social Needs, Community Well-being, and Long-term Prevention Strategies
Use of Medicaid Section 1115 waivers, as an example, can align financial incentives with the goal of reducing health disparities and ensure that resources flow to programs that improve access to housing, education, and employment opportunities, as well as support community reentry for people who are incarcerated (140,141). Such programs can have great value. For example, the North Carolina Medicaid Healthy Opportunities Pilots 1115 waiver program pays for screening for health-related social needs and subsequent services by human services organizations for those with needs. The North Carolina program initially had increased Medicaid spending near program enrollment and then was associated with a decreased trend in spending compared with if there were no such program, consistent with improved health (142). In March 2025, the Centers for Medicare & Medicaid Services rescinded guidance on coverage of health-related social needs, stating that they “will consider states’ applications to cover these services and supports on a case-by-case basis …” (143). Innovative Medicaid Section 1115 waivers that address health-related social needs should be expanded.
Account for Marginalization in Addressing SDOH (Social Care)
While negative SDOH (e.g., poverty, food insecurity, housing instability) affect all kinds of Americans, some are disproportionately affected because of their social identity (e.g., race and ethnicity, immigration status) or other factors (e.g., geographic location, rurality). Designing “one-size-fits-all” social care programs where the unique challenges of marginalized communities are not taken into account can result in suboptimal uptake and effectiveness. For example, housing discrimination and racial residential segregation still exist in many cities across the U.S. Programs with an aim of seeking to address housing instability without addressing the additional barriers of structural racism could exacerbate housing disparities, and related health outcomes, among African American patients. In a 2023 systematic review of social care interventions with multiracial or multiethnic populations it was found that only 14% included any comparisons by race or ethnicity (139). This represents a missed opportunity to learn about the intersection of race and social care, and how structural racism may limit the effectiveness of social care interventions without specific attention and planning.
Health Care System Should Authentically Partner With Social Sectors and Community Organizations and Share Power and Should Not Medicalize SDOH
Compared with social sectors, the health care industry is well financed and is politically powerful. The health care industry tends to medicalize SDOH, i.e., deconstruct them to individual, often stigmatized pathologies to diagnose and treat, and implement health care–centric interventions that do not address the underlying structural, socioeconomic, and political drivers (144). As the sector with the money, the health care industry can throw its weight around despite not being the expert in social services, with deleterious policy effects (13,46). A mix of health care financing mechanisms to address SDOH (Table 5), such as social risk–adjusted capitated payments and direct fee-for-service payments for social services (145), bring complementary strengths and weaknesses. An appropriate mix of market incentives and regulations with strong public governance (Table 2) can help align industry actions with the public good (146).
Develop and Implement Models to Blend and Braid Funding Streams From the Health and Social Sectors to Address Health-Related Social Needs and SDOH
Integration of funding from both health and social sectors to address SDOH can be achieved through braiding and blending of funds (147,148). The National Academy for State Health Policy highlights that blending and braiding funds enable states to maximize resources for public health and prevention (149). Braiding involves coordinating funds from multiple sources, maintaining separate accountability for each funding stream while aligning them toward a common goal. Both North Carolina’s Healthy Opportunities Pilots program and California’s CalAIM initiative blend Medicaid managed care funds with state and philanthropic resources to provide services such as community health workers and doulas, housing support, food assistance, and transportation (147,150, 151). The states’ Medicaid managed care plan may braid Medicaid funds with county housing dollars to provide rental support for high-risk individuals, ensuring compliance with Medicaid rules while expanding services. This approach allows these states to address housing, food security, and behavioral health needs, improving health outcomes while leveraging multiple funding sources efficiently.
Blending, on the other hand, combines funds from various sources into a single pool, removing individual funding identities and allowing for more flexible use of resources. This method often requires statutory authority due to the relaxed restrictions on how funds can be used. The Western Idaho Community Health Collaborative, a public-private partnership across two health districts (including 10 counties) and private sector funders, used a blended funding model to improve SDOH and initiatives that would not be supported by traditional funding sources, including environmental changes, access to health care, and behavioral and mental health (152). Each partner contributed a set amount of dollars to the collaborative, and the collaborative, not individual funders, makes decisions with the community on funding priorities. Scaling and sustaining these models necessitate state and federal funders to also contribute dollars with enough flexibility to support the collective’s projects.
Health in All Policies
Health in All Policies is a framework to ensure that health and health equity are embedded throughout the creation, adoption, and implementation of policies and programs across health and nonhealth sectors (153). A Health in All Policies approach involves working with patients and neighborhoods to improve the effectiveness of prevention, treatment, and health care services (154). For example, to prevent or control diabetes, comprehensive cross-sector collaboration among transportation, zoning, planning, agriculture, economic development, safety, and community and public health agencies can improve the upstream physical and food environments that shape health. Health impact assessments (HIAs) incorporate health and health equity into non–health sector policy decision-making (155). Health in All Policies and HIAs can enhance the impact of health care systems and dismantle structural barriers to health equity and justice (153).
CONCLUSION—ADVOCATING FOR PATIENTS AND THE NATION’S HEALTH
While it is easy for one’s head to start spinning in considering the byzantine U.S. health care system, our compass is simple: Have we designed our system to maximize the health and well-being of all individuals and communities? Do payment policies support and incentivize the realization of these goals? This compass is essential to cut out the noise, to keep our attention focused on the actions necessary to achieve a nation in which all people have fair and just opportunity for health.
ARTICLE HIGHLIGHTS.
Why did we undertake this study?
The U.S. health care system is failing, with poor population health outcomes, despite high cost.
What is the specific question(s) we wanted to answer?
What are promising policies to improve the U.S. health care system?
What did we find?
Reform requires commitment to improving health of all individuals and communities, through tailored market incentives, stronger public governance, and targeted health insurance and payment policies focused on population health models that address both medical and social needs.
What are the implications of our findings?
Maximizing health and well-being of all individuals and communities is the compass. Equitable access allows for distribution of health care resources according to need, enabling all people to have fair and just opportunity for improving health and well-being.
Acknowledgments.
N.R.K. is an editor of Diabetes Care but was not involved in any of the decisions regarding review of the manuscript or its acceptance.
Funding.
None supported this article. For work outside this article: M.H.C. reports receiving grants or contracts from the Agency for Healthcare Research and Quality, California Health Care Foundation, Health Resources and Services Administration, Kaiser Foundation Health Plan, Inc., Merck Foundation, NIDDK, Patient-Centered Outcomes Research Institute, and Robert Wood Johnson Foundation. J.D.B. reports receiving grants, contracts, or honoraria from the Robert Wood Johnson Foundation, the Rx Foundation, the Commonwealth Fund, and the Sloan Foundation. E.S.H. reports receiving grants from NIA, NIDDK, and NIMHD. N.R.K. reports receiving grants from NHLBI and NIMHD. D.D.K. reports receiving grants from the NIMHD, NHLBI, Arnold Ventures, American Heart Association, and George E. Richmond Foundation. M.E.P. reports receiving grants from the California Health Care Foundation, Kaiser Foundation Health Plan, Inc., the Merck Foundation and the Patient-Centered Outcomes Research Institute. H.A.P. reports receiving grants or contracts from NIDA, NIMH, Arnold Ventures, and the Social Security Administration.
Duality of Interest.
M.H.C. is a member of the Bristol-Myers Squibb Company Health Equity Advisory Board, Blue Cross Blue Shield Health Equity Advisory Panel, Essential Hospitals Institute Innovation Committee, Institute for Healthcare Improvement and American Medical Association National Initiative for Health Equity Steering Committee for Measurement, National Committee for Quality Assurance Expert Work Group on role of social determinants of health data in health care quality measurement, Council of Medical Specialty Societies Encoding Equity in Clinical Research and Practice Alliance Advisory Committee, and Advisory Board for the AHIP 2025 Annual Conference; and co-chaired the Health Equity Advisory Team for the Centers for Medicare & Medicaid Services Health Care Payment Learning and Action Network; and was a member of the National Advisory Council of the NIMHD, the Health Disparities and Health Equity Working Group of the NIDDK, Families USA Equity and Value Task Force Advisory Council, National Academy of Medicine Council, CDC and American College of Physicians Advisory Committee I Raise the Rates: Promotion of Influenza Immunization through Interprofessional Partnership, and The Joint Commission Health Care Equity Certification Technical Advisory Panel; and was a subject matter expert for the Institute for Healthcare Improvement Health Equity Alliance Accelerator. He has received honoraria from Sutter Health and Genentech (Sutter Health supports the Institute for Healthcare Improvement Health Equity Alliance Accelerator in part with funding provided by Genentech); and received support for attending meetings and travel from America’s Health Insurance Plans. C.M.G. has no conflicts to disclose. N.R.K. received support as an Associate Editor of Diabetes Care; and has received honoraria for Chairing the Patient Centered Outcomes Research Institute’s Merit Review Panel; is Vice Chair of the American Heart Association’s Epidemiology Implementation Science Committee; and is a Board member for the National Council of Asian Pacific Islander Physicians. D.K.K. reports receiving honoraria from the Institute for Clinical and Economic Review as a member of Midwest Comparative Effectiveness Public Advisory Council and from the American College of Physicians as a methods consultant for Annals of Internal Medicine. M.E.P. reports receiving compensation as a senior associate editor for the journal Health Services Research, and receiving speaker fees from CME Outfitters; was a member of the National Academy of Medicine committee for Unequal Treatment Revisited; and was a member of the AcademyHealth Advisory Group on Health Services Research Innovation, Inclusion and Impact. H.A.P. reports receiving speakers fees from Cato Institute; payment for expert testimony from the Law Firm of Susman and Godfrey.
The thoughts and ideas expressed in this article are those of the authors and do not necessarily represent the views or policies of their employers or other organizations associated with the authors.
Footnotes
Prior Presentation. Parts of this work were presented at the Department of Population Health Sciences Grand Rounds, Weill Cornell Medicine, New York, NY, 9 April 2025; at the Annual Hopkins Center for Health Disparities Solutions Symposium, Baltimore, MD, 14 April 2025; and at the 85th Scientific Sessions of the American Diabetes Association, Chicago, IL, 20–23 June 2025.
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