McKinsey & Company has outlined several mechanisms available to stakeholders for funding data, analytics, and technology infrastructures in the social determinants of health (SDoH) space.

Funding remains a significant barrier when addressing SDoH. While stakeholders have made noticeable progress related to funding for social needs such as food insecurity, housing stability, and transportation, support of SDoH efforts related to data, analytics, and technology have been far more obscure.

To draw awareness to the existing funding options that could be useful to SDoH data and analytic efforts, McKinsey & Company has outlined four federal funding channels stakeholders can leverage to support data integration and screening and referral capabilities.

1. Waivers and authorities

There are a variety of waivers and authorities that can be used to add flexibility to Medicaid funds to address SDoH and improve health outcomes, such as case management, food assistance, housing support, and data and analytics infrastructure. Waivers and authorities to explore include the Section 1115 waiver, the Section 1915 waiver, the Section 1905(a) State Plan Authority, and the Section 2703 Health Homes.

2. Federal programs and agencies

There are many federal programs and agencies with funding sources that offer traditional funding through state Medicaid agencies and support SDoH and data and analytics infrastructure efforts, as well as other non-traditional funding sources that support SDoH efforts but are not typically known for funding state Medicaid agencies.

Traditional state Medicaid funding sources come from the Centers for Medicare & Medicaid Services Innovation Center (CMMI) and the Medicaid Enterprise System (MES) through the Center for Medicaid and CHIP Services (CMCS). CMMI provides grant funding toward initiatives such as payment model testing, SDoH screenings, referrals, and care navigation. CMCS MES funding on the other hand aims to further Medicaid infrastructure and technology through initiatives such as SDoH data infrastructure development.

The RISE Summit on Social Determinants of Health

Additional federal-funding sources, such as grants or partnerships, can be found through other government programs and agencies including the Health Resources and Services Administration, Department of Housing and Urban Development, and the Department of Agriculture.

3. Recent legislation

There have been advancements in SDoH funding due to recent legislation increasing the federal funding available for such initiatives. Laws such as the American Rescue Plan Act, the Bipartisan Infrastructure Law, and the Coronavirus Aid, Relief, and Economic Security Act provide food and housing support and investments in data modernization and infrastructure and will provide future funding through federal programs and other opportunities to address SDoH.

4. Managed-care standards and support

States could explore federal support through federal-grant initiatives related to managed care, a funding model where payments are per patient rather than per service. Though managed care is not a federal funding mechanism itself, states can access support to advance multi-payer health care payment and delivery system reform models. Identifying the federal standards that affect managed care and related investment in SDoH to quality improvement is also an effective strategy to acquiring additional support.

In addition to federal support, states can also encourage SDoH efforts among managed-care organizations to further innovations.

Considering each funding mechanism, McKinsey & Company also recommended eight actions states can take to further SDoH data and technology infrastructure efforts, including:

  1. Integrate SDoH into broader strategic priorities rather than siloed projects
  2. Communicate the critical value behind SDoH data, technology, and infrastructure
  3. Bridge the gap between IT or data programs and service-delivery programs
  4. Partner and combine funding mechanisms to establish additional resources
  5. Expand SDoH efforts to a wider group of beneficiary populations
  6. Assess current state data and technology capabilities and gaps
  7. Consider different approaches to implement SDoH infrastructure
  8. Evaluate the types of data collected and how it is best retained