Bibliographic Details
| Title: |
The Effects of Financial Structures to Increase Social Drivers of Health Investments in Medicaid: A Simulation Approach. |
| Authors: |
Fang, Francis Haoyu, Karaca-Mandic, Pinar, Thakor, Richard T. |
| Source: |
American Journal of Public Health. 2026 Suppl 3, Vol. 116, pS210-S217. 8p. |
| Subjects: |
Computer simulation, Statistical models, Managed care programs, Social determinants of health, Research funding, Health insurance reimbursement, Health status indicators, Investments, Cost benefit analysis, Health care reform, Organizational effectiveness, Financial management, Medicaid, Labor incentives, Medical care costs, Pay for performance, Economics |
| Geographic Terms: |
United States |
| Abstract: |
Objectives. To explore and quantify the potential effects of financial innovations aimed at increasing investments in social drivers of health (SDH). Methods. We built a simulation model in which individuals in a health care market are served by multiple Medicaid managed care organizations (MCOs). In our model, each MCO can spend money to make SDH investments that improve patient health and reduce costs to the MCO, but patients can switch between different MCOs. Results. While SDH investments improve patient health and increase the profitability of the investing MCO, the benefits also accrue to noninvesting MCOs because of the churn of patients between MCOs, resulting in a "wrong-pocket problem" where investing MCOs bear the costs but share the benefits with competitors, resulting in worse financial returns compared with making no investments and ultimately disincentivizing SDH investments. Outcomes can be improved when all MCOs participate in a financial structure—an SDH bond—which raises money from investors and distributes the proceeds to MCOs to make SDH investments. Conclusions. An SDH bond can improve patient health and increase profits for MCOs because of cost-savings. (Am J Public Health. 2026;116(S3): S210–S217. https://doi.org/10.2105/AJPH.2026.308479) [ABSTRACT FROM AUTHOR] |
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| Database: |
Psychology and Behavioral Sciences Collection |
