Adoption of social innovation technology for healthcare is poised to triple over the next five years, according to a market research report by Patchwise Labs, as the shift to value-based care requires health systems to address the social determinants of health (SDoH).
As health systems look to invest in tools for social needs screening and referrals, this will drive adoption of a new class of technology solutions at a CAGR of 23 to 25 percent over the next five years, according to the report.
The report, titled “The 2018 Buyer’s Guide to Social Innovation Tech in Healthcare,” assesses the emerging market for SDOH solutions, examines key policy and business trends driving adoption of new tech and serves as a strategic buyer’s guide to an emerging class of market-tested solutions for social needs screening and referrals.
However, currently, few healthcare organizations are investing in SDoH technology. Many organizations are taking homegrown approaches at this stage, and market adoption of commercial tools for screening and referrals remains under 4 percent, representing an estimated investment of $88 to 92 million. Better data and more robust local partnerships will enable scalability and accountability in SDoH programs.
By 2023, 12 to 15 percent of health systems and managed care organizations (MCOs) will have invested in these tools. Adoption is expected to triple in five years’ time, driven by a growing business case for standardization around data capture, communication, and analytics, as well as key policy and market trends specific to SDoH, according to Patchwise Labs. Over the next five years, the market will grow at an estimated compounded annual growth rate (CAGR) of between 23 to 25 percent, to an estimated size of $265 million by 2023.
The report notes that several commercial solutions and numerous homegrown efforts are currently underway to analyze SDOH data, combine them with traditional claims or clinical records, link them to clinical outcomes, and build predictive models to inform more appropriate upstream prevention. “In the next three years, we expect these efforts to spawn a wave of commercialization and new startups focused on better informed, socially-integrated clinical workflows as well as population-level adjustments to risk stratification and program design based on non-clinical datasets,” the report states.
The last two years have seen a tremendous amount of activity related to SDoH across the policy, payment, care delivery and technology sectors, the report notes. And, Patchwise Labs’ analysis also found that health plans are ahead of providers in terms of making programmatic or innovation-related investments in addressing SDoH, driven by a crop of specific public programs, such as DSRIP and CPC+, as well as through local partnerships with community-based organizations.
“While much of this work has been limited to pilot-level projects, or relegated to programmatic work by health plans’ foundation arms, the groundswell in interest as well as the growing evidence base for upstream investment in health have begun to shift the conversation around expanding reimbursement frameworks and value-based contracting towards non-clinical areas, such as food, transportation and housing,” the report states.
The report also notes that health systems and hospitals actively related to addressing SDoH have tended to be cost-driven, focused on high-risk/high-need inpatient populations. And, where adoption of screening tools or referral programs do exist, they tend to be isolated from one department to another, still reliant on ad-hoc, homegrown approaches, limited by available electronic health record (EHR) technology.
Yet this is changing, as the report also notes that the number of health systems investing in SDoH-related programs continues to grow. “Most of the vendors profiled in this report have successfully built client bases with numerous health delivery systems. As value-based care continues to expand and payers begin addressing SDoH, the provider market could be the quickest to adopt new approaches to facilitating social needs referrals,” the report states.
“Over the last couple of years, the buzz around social determinants has been getting louder,” Naveen Rao, managing partner of Patchwise Labs and lead author of the report, says. He adds that the report offers “a bird’s eye look at what’s going on in the social innovation space, from key policy developments to market trends in business and technology,” and a “shortcut for due diligence that identifies established companies that can help address non-clinical needs.”
The analysis also found that the biggest challenge in the evolution of social innovation in healthcare is the question of how to approach measurement, risk adjustment, and payment. “In communities across the country, it remains mostly unclear what performance, payment, and accountability look like for non-clinical care. The unifying thread across these issues is data; today’s investments in new tech serves as a foundational effort in understanding how to better capture, translate, and otherwise leverage SDoH data for better clinical and financial outcomes,” the report states.
According to Rao, the EHR is necessary but not sufficient, as social innovation is happening in spite of EHR technology, not because of it. “Today’s progress comes from external integration efforts that leverage EHR data for third party tools and features, and/or deposit externally captured data into a central record. Despite their call for ‘community health records’ major EHR systems are not likely to develop features or make tools available/affordable to users at community based organizations, where data capture and communication play a key role in measuring performance and demonstrating value,” the report states.
He also notes that a “full stack” solution to address SDoH is emerging. “While the market remains in its infancy, a class of vendors has developed platform offerings that enable the data capture, communication, and analytics needed to address SDoH. The four central features of this “full stack” include, up-to date resource directories of local social service providers, needs assessment screening tools, closed-loop referral platform to facilitate care coordination, and reporting and analytics tools to fine tune performance.
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