It’s a lot of money, but a drop in the bucket compared to profits, according to a new study.
In recent years, private health insurance companies have spent at least $1.87 billion on programs aiming to improve social determinants of health (SDOH).
But that is a relatively small percentage of profits those companies make each year, according to a new study, “Trends in Social Spending by Private Health Insurers,” published online Nov. 10 in the Journal of General Internal Medicine.
From 2017 to 2019, U.S. health systems invested more than $2.5 billion to target SDOH because social, economic, and environmental conditions account for 80% a person’s modifiable contributors to health outcomes. “These investments are leading to changes in how clinicians deliver care to patients with social vulnerability, as they consider the array of social services available,” the study said.
Researchers from Harvard University and Oxford University examined spending and income by the top 20 health insurers that control 66.2% of the U.S. private health insurance market. The study period was 2017 to the end of 2021, and they spent at least $1.87 billion on housing, food security, employment, education, social and community context, transportation, and general SDOH.
Of that, the top six insurers accounted for 72% of the spending for SDOH. As a percent of net income, they spent 0.11% on SDOH in 2017, 1.6% in 2020, and 0.67% in 2021.
“Private health insurers are investing substantial dollars in social programs that better address the root causes of disease, potentially contributing more to health than clinical care alone,” the study said. “However, social spending constitutes a small share of insurer profits.
“For example, UnitedHealth Group reported $6.7 billion in net income in Q2 of 2020 alone,” the study said. The urgency of the COVID-19 pandemic in 2020 may have sparked increased spending that year, a peak year for nearly all categories for spending on SDOH, the researchers said.
In the future, it is unclear if insurers should spend more on SDOH because the money could be used to lower patient premiums and cost sharing, the study said.
The sources included the 2021 Market Share Report by the National Association of Insurance Commissioners, along with news articles and press releases included insurer names and the phrases “socials determinant of health” or “community health.” Based on those, the researchers acknowledged they may have missed investments or spending was misclassified depending on when it was publicized.
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