States are building healthier communities – with better results at a reduced cost to taxpayers

The United States spends more on healthcare than any other country, yet we have some of the unhealthiest people in the world. With more than 60 million people enrolled in Medicare and 76 million in Medicaid, costs for each program exceeded $700 billion in FY2022. Between 1970 and 2021, Centers for Medicare and Medicaid services estimates that health care spending grew from 6.9% to 18.3% of gross domestic product. Humana and University of Pittsburgh School of Medicine researchers estimate that up to 25% of health care spending is waste. With the per person cost of healthcare spending exploding year over year, policymakers should have an eye towards preventing wasteful spending before it happens by efficient use of dollars allocated to assisting individuals in non-medical settings.

Eighty percent of a person’s health has to do with what happens outside the clinical setting – where they live, eat, work, and pray. People do not live in hospitals; they live and have needs in their community. These needs, non-medical drivers of health (housing, food, transportation, employment, etc.), can only be addressed outside of a clinical setting but can have a large monetary impact within the healthcare system. In fact, a 2018 study published in Population Health Management estimated that over 11% of total health care expenditures can be reduced by properly addressing these non-medical needs. 

Despite efforts to improve care and lower costs, until recently, there has not been a systematic, comprehensive solution that connects health and human service providers to address non-medical needs. Recent technological innovations and advancement have proven to be the hope many states are looking for in building healthier communities and better results at a reduced cost to taxpayers. In particular, the public and private sector have been making critical infrastructure investments in closed loop referral systems that are revolutionizing coordinated care networks of health and social service providers. These systems ensure that the right community resources are provided to an individual at the right time – before their social care needs become a health care emergency. Closed loop referral systems allow the necessary organizations to coordinate the non-medical needs of the individual, ensure the correct referrals are made, the referrals are answered and complete, all while protecting the privacy of the individual. The process not only improves care coordination and accountability across systems, it also delivers data insights that inform and enable data-driven decision-making around spending. These systems are examples of private sector solutions that facilitate better outcomes, for less cost, and ultimately are a more efficient use of taxpayer dollars. 

Experts across the healthcare industry have stated that access to care is where the most progress will be made. Closed loop referral systems help provide this access and at least 48 states are using online referrals to connect health and social needs. Closing the loop in these referral systems is the lead driver in helping to eliminate inefficiencies. States like Florida and Georgia have even recently implemented this technology to assist victims in need after Hurricane Ian and assist veterans. Closed loop referral systems connecting health and social services are an example of good governance and have proven to be a good use of taxpayer’s dollars due to the technology’s ability to eliminate inefficiencies. These systems allow for care providers to coordinate care for the individual, seamlessly connecting government, health providers, and community-based organizations.

We commend officials who are making evidence-based decisions for complete and integrated end-to-end solutions to directly address both the health and social care needs of the citizens and taxpayers they represent.