Social Determinants of Health (SDOH): The Missing Link in Value-Based Care

By Victoria Benucci, Director of Clinical Operations and Client Success at OutcomeMD

As healthcare continues its shift towards value-based care, the conversation around Social Determinants of Health (SDOH) has gained unprecedented importance. At its core, value-based care aims to enhance the quality of care provided to patients while reducing healthcare costs. To achieve this, understanding the full spectrum of factors affecting health outcomes is essential. These factors extend far beyond clinical care, which is why Social Determinants of Health (SDOH) are crucial to improving patient outcomes and closing gaps in healthcare.

The Growing Role of SDOH in Healthcare

Social Determinants of Health are the non-medical factors that influence health outcomes, including socioeconomic status, education, neighborhood and physical environment, employment, and social support networks. Research shows that these factors can have a greater impact on health outcomes than medical care itself. According to the World Health Organization (WHO), SDOH can account for up to 50% of health outcomes, meaning that non-medical factors like living conditions, income levels, and education play a larger role in health than clinical interventions alone.

In recent years, the healthcare landscape has evolved to recognize the importance of addressing SDOH. A report from the Robert Wood Johnson Foundation found that 80% of healthcare outcomes are driven by SDOH, including factors such as behavioral patterns and environmental influences, while clinical care only accounts for the remaining 20%. With these insights, healthcare organizations are increasingly focusing on addressing the social context of patients' lives to enhance overall well-being.

Furthermore, recent regulations from the Centers for Medicare and Medicaid Services (CMS) now require healthcare providers to collect and report SDOH data as part of the shift to value-based care. These new rules align perfectly with the broader goal of value-based care: improving outcomes by addressing the whole patient, not just the medical condition.

Why Addressing SDOH is Critical for Value-Based Care

Treating a patient’s symptoms without considering their living environment or social conditions is akin to applying a bandage to a deep wound—it may cover the problem temporarily, but it doesn’t solve the root cause. Value-based care models incentivize healthcare providers to improve patient outcomes while reducing costs, and addressing SDOH helps organizations achieve both objectives.

For example, a study published in Health Affairs found that incorporating SDOH into patient care strategies resulted in a 10% reduction in emergency department visits and a 12% reduction in overall healthcare costs for patients with complex medical and social needs. This underscores the importance of taking a holistic view of patients, recognizing that social factors—such as stable housing or food security—can have an outsized effect on health.

At OutcomeMD, we’ve made it a priority to integrate SDOH data into our outcome-tracking systems, providing healthcare providers with a more comprehensive view of their patients’ health. By capturing key social factors—like access to food, housing stability, and transportation—we empower clinicians to make data-driven decisions that truly reflect the reality of their patients' lives. This approach not only enhances care quality but also helps healthcare organizations comply with new regulatory requirements for SDOH reporting.

Technology as a Catalyst for SDOH Integration

The integration of SDOH data into clinical workflows is no small feat, and many healthcare organizations struggle with the operational challenges involved. However, technology is proving to be a powerful enabler of this integration.

Platforms like OutcomeMD are pivotal in capturing and analyzing SDOH data alongside clinical outcomes. According to a survey by Deloitte, 88% of healthcare executives believe that data analytics is critical to addressing SDOH, yet only 12% of organizations have fully integrated SDOH into their analytics platforms. At OutcomeMD, we’ve addressed this gap by providing a seamless way to incorporate SDOH data into patient assessments, without adding unnecessary administrative burdens on healthcare staff.

In addition, OutcomeMD’s real-time notification system ensures that healthcare providers are alerted when a patient’s SDOH data reveals an urgent need. For example, if a patient indicates they are struggling with transportation to medical appointments, the system will notify care teams to coordinate assistance immediately. This proactive, data-driven approach to patient care not only helps improve outcomes but also reduces the chances of complications and rehospitalizations.

The Impact of SDOH on Patient Outcomes

The positive impact of SDOH interventions is well-documented. A 2021 report from McKinsey found that addressing key SDOH factors could potentially save the U.S. healthcare system $230 billion annually by reducing emergency department visits, hospitalizations, and long-term care needs. The report also highlighted that healthcare systems that actively address SDOH see a 3.4x return on investment (ROI) from these interventions, showing that tackling social barriers can be both cost-effective and beneficial for patient outcomes.

Consider the example of a patient recovering from surgery who lives in an area with limited access to fresh food. Without proper nutrition, recovery could be delayed, potentially leading to complications. However, by identifying this issue through SDOH data and connecting the patient to community resources for food access, care teams can mitigate these risks and support a faster recovery. Such interventions not only improve individual patient outcomes but also contribute to overall population health management.

Overcoming Barriers to SDOH Implementation

Despite the clear benefits of addressing SDOH, implementation remains a challenge for many healthcare organizations. Data privacy and integration issues are among the top concerns. According to a report by the American Hospital Association (AHA), 65% of healthcare executives cite data-sharing barriers as a major obstacle to SDOH implementation.

Healthcare providers need to balance comprehensive data collection with the need to protect patient privacy. HIPAA regulations and other data privacy laws require that any use of patient data—particularly sensitive social data—be handled with the utmost care. At OutcomeMD, we have developed clear protocols to ensure compliance with these regulations while enabling providers to capture essential SDOH information.

Additionally, integrating SDOH data into existing electronic health records (EHR) systems requires investment in technology and staff training. The same AHA report notes that 45% of organizations struggle with training their staff to effectively use SDOH data . To address this, OutcomeMD offers comprehensive training and support to ensure that healthcare professionals are equipped with the tools they need to collect and interpret SDOH data accurately.

The Path Forward: Strategic Focus and Collaboration

To overcome these challenges, healthcare organizations must take a strategic approach to SDOH implementation. A report from the National Academy of Medicine advises organizations to start by focusing on a few key social factors that are most relevant to their patient populations. For instance, organizations serving low-income communities may prioritize housing stability and access to nutritious food.

Collaboration with community organizations is also vital. By partnering with local groups, healthcare providers can gain a deeper understanding of the specific SDOH challenges in their area and tap into resources that help address these needs. The AHA report found that 71% of hospitals already partner with community organizations to address SDOH, indicating that collaboration is key to successful implementation.

Conclusion: The Future of Healthcare

The integration of Social Determinants of Health into patient care represents a fundamental shift in how we approach healthcare. By addressing the broader social factors that impact health outcomes, healthcare organizations can provide more equitable, effective, and value-based care.

At OutcomeMD, we are proud to be at the forefront of this transformation. Our platform not only captures essential SDOH data but also empowers clinicians to make informed, holistic decisions that reflect the full context of their patients’ lives. As the industry continues to evolve, it’s clear that addressing SDOH is no longer optional—it’s a necessity for improving health outcomes and reducing healthcare costs.

Healthcare providers who embrace this shift will find themselves better equipped to meet regulatory demands, improve patient satisfaction, and drive meaningful change in their communities.