Modernizing The Social Safety Net
…but not like DOGE
This is not really a venture fail, but more of a public health systems fail and call to action to put our heads together regarding the imminent risk to our social safety net.
Courageous collaboration and action on the part of the healthcare ecosystem, innovators, and public officials is more necessary now than ever. Medicaid Managed Care Organizations (MCOs) must lead the charge in supporting social needs among vulnerable populations. The new administration’s proposed budget cuts to Medicaid and the social safety net will end up costing states and the healthcare system financially and will have enormous long-term impacts on future generations by further depriving millions of children. Much of the burden will land in the laps of hospitals and health systems servicing vulnerable populations — they will have to either turn patients away or get reimbursed at a fraction of the cost to actually care for the patients. Millions more Americans would face food insecurity, homelessness, social isolation, and lack of access to timely medical care, adding to the existing 68% of Americans who experience at least one unmet social need today. Healthcare costs associated with food insecurity alone amount to $687.7 billion annually. Here’s a great tool from the Urban Institute that shows how significantly the gap between benefits and affordability of food could deepen if the budget cuts went through.
Ultimately, MCOs are going to be the entities paying (financially) for these budget costs in the form of adverse health outcomes. This is a unique opportunity for MCOs, healthcare providers, public health leaders, entrepreneurs, and community-based organizations to come together to build a more effective safety net. For too long, we’ve operated in a fragmented system where healthcare manages clinical concerns while government programs handle the financial safety net, with minimal collaboration.
So, how do we build a new, modernized safety net from the bottom up?
The Current Landscape
Each year, the government spends $1.1 trillion on welfare and benefit programs while healthcare payers simultaneously allocate billions to programs and vendors aimed to fill gaps in social needs. These investments, while substantial, aren’t achieving their intended impact. Despite this combined spending, 47.4 million Americans remain food insecure, including 17.9% of U.S. households with children.
Why aren’t these resources having the desired impact? Three major barriers among patients and recipients prevent effective utilization of benefits:
- Lack of awareness about available programs
- Complexity of referral or application processes
- Perceived lack of value or personalization in the benefits offered
These themes play out across payer-sponsored benefit programs, government-sponsored benefit programs, and community-based organizations.
The Problem with Current Approaches
Payer-Sponsored Benefit Programs
I’m going to take food as an example because it has gotten substantial attention from the healthcare ecosystem in terms of venture funding, research outcomes, and pilot tests. After speaking with countless individuals struggling with food insecurity — including mothers and people with diet-related conditions — we’ve learned that people genuinely want to eat healthily. However, they lack the necessary resources to do so.
As one individual told us:
If you’re shopping on a budget, especially with food stamps, you’re going to buy the cheapest thing that’s going to feed the most people. So that’s a lot of frozen foods like pizzas. I’m not going to Whole Foods and getting fresh fruits and veggies.
The solutions currently offered by payers often miss the mark. Another individual described their experience with a meal delivery service:
I had a choice between Mom’s Meals [or Homestyle Direct], and I picked Homestyle Direct. The only thing I would eat was breakfast because all the other meals had so much soy and sodium that I couldn’t eat them. It was just too salty. They were supposed to be for kidney disease too, but I don’t see how because all you could taste was this heavy amount of soy which is full of sodium.
Despite significant venture funding and media attention, Food-as-Medicine startups have struggled to build sustainable relationships with payers — likely because they haven’t been able to demonstrate how their on-the-ground impact ties to payers’ expected ROI. It’s also a challenge to get full buy-in from payers to spend on non-traditional interventions aimed at filling gaps in social needs — the attribution of savings is often challenging to calculate and payers remain dubious about the business case. Additionally, food is expensive, and because of member churn, if you don’t know for sure that food now will reduce cost for that member in this calendar year — it is hard to justify to the payer.
Government-Sponsored Programs: The WIC Case Study
Again, I’m selecting one program out of many to illustrate my point. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) exemplifies both the potential of government benefit programs and the current suboptimal reality. Established in 1972, WIC supports low-income (<187% FPL) pregnant, postpartum, and breastfeeding women, along with infants and children under five years old by providing nutritious food, nutrition education, breastfeeding support, and healthcare referrals.
The program’s impact is significant: WIC participation reduces preterm births, low birth weight, and infant mortality while increasing childhood immunizations. Every $1 spent on WIC saves $2.48 in medical, educational, and productivity costs.
Yet despite these benefits, only 51% of the 12.1 million eligible women and children participate — a figure that has declined since 2016. More alarmingly, only 22.2% of pregnant Medicaid recipients and 15.1% of pregnant SNAP recipients (all of which are adjunctly eligible) enroll in WIC. Even among those who do enroll, only 77% of cash value benefits are redeemed.
Community-Based Organizations (CBOs)
Current solutions in the CBO referral space are inadequate from both healthcare and community perspectives. Many platforms fail to build meaningful relationships with CBOs or provide them with tangible value, resulting in referrals that are rarely “closed loop.” CBOs also don’t have workflows set up for this — partly because of the wide variance of maturity and partly because it really complicates their service model. Healthcare payers or providers must shoulder the burden of identifying which members to refer and where to send them. This process is extremely manual and requires a case manager or community health worker to review information from many different sources and make educated guesses on how to support the individual member, which takes hours per case and is often subjective.
The Opportunity: Data Integration and Collaboration
We’re at a pivotal moment for transforming the way we address social determinants of health. Advances in artificial intelligence and healthcare data interoperability create unprecedented opportunities for enhanced data sharing across government and healthcare systems. Health Information Networks (HINs) could be better leveraged for seamless, bidirectional data sharing between government benefit programs, payers, healthcare providers, and CBOs. Approximately 100 HINs now facilitate health data exchange, but most lack access to government benefit data like WIC enrollment or redemption information.
Despite efforts to improve documentation of social determinants of health, only 1.6% of Medicaid patients and 1% of commercially insured patients receive diagnosis codes regarding social and economic circumstances. Consequently, healthcare providers and payers may access medical records but remain largely unaware of their patients’ food insecurity or benefit eligibility. So much progress has been initiated, but we’ve failed to take social needs seriously and track gaps in the same way we do clinical diagnoses.
Next Steps
We should develop a new modernized safety net that engages both private and public stakeholders. It is not news that healthcare and social care are inextricably linked. If we fundamentally believe that closing gaps in health-related social needs will reduce total cost of care, then we believe this is a problem worth investing in. Here’s a great ROI review of SDOH interventions from The Commonwealth Fund. By moving beyond siloed approaches and fostering genuine collaboration, we can create one efficient and comprehensive safety net. In doing so, MCOs would ultimately improve risk adjustment, reduce total cost of care (>200% ROI in most pilot studies), improve efficiency of community health workers, increase STARS and CAHPS scores, and more. With the right stakeholders at the table, and meaningful upfront investment, we can transform SDOH interventions into effective tools that reduce healthcare costs, decrease inequities, and save lives.
Final Thought
None of these interventions — payer sponsored programs, government benefit programs, or community based organizations — work if you can’t identify who needs support, make them aware of their options, and ensure they understand the potential benefits. Health literacy is often at the root of awareness and understanding. Message delivered does not always mean message received. We’ve heard from several SDOH and health literacy experts that having presence in the community really matters here. So, I continue to press on this dilemma of even if you use the most sexy technology and integrate all the data… how can we ensure we are humanizing the experience by being present in the right places for the right people in the right way? If you’re interested in continuing to explore this with me, please reach out @emily.queen@healthworx.studio.
