For more than a decade, a coalition of health care pundits associated with Dartmouth, the IOM, MedPAC, CMS, the Urban Institute, the GAO, the CBO and the Commonwealth Fund has been peddling a line about the fact that, after adjusting for age, sex and health status, there is a large residual of unexplained geographic variation in health care that it is not explained by differences in income or other demographic factors and therefore must be due to low-performing health care systems. In response to “some” who have claimed that poverty is at the core of the problem, they state emphatically that, after adjusting for health status, there is little evidence that poverty and related sociodemographic factors play a role. I am proud to be one of the “some.”

In a sense, they are right. Of course health status is a major predictor of need. It really is the only predictor. Health care is given to people who are sick. That’s why it’s called health care. But it is poor people have the poorest health status and continue to do so even after receiving health care. So there is very little left to adjust for once an adjustment is made for health status. In fact, if the adjustment sequence were reversed — if health care spending were first adjusted for income — health status would be found to exert little influence. Failing to find that poverty is an operative element is, well, disingenuous.

But if poverty explains it all, why does the D-I-M-C-U-G-C-CF crowd consistently find an unexplained residual. The answer is that they all use large units of analysis, such as (hospital referral regions (HRRs), hospital service areas (HSAs) metropolitan statistical areas (MSAs), and these all introduce the error of aggregation of non-linear elements. Let me explain. The relationship between health care spending and the levels of income or disability are curvilinear. Spending rises steeply at the low end of income or the high end of disability, with relatively little change along the path. Averaging is, by definition, a linear manipulation. It will always fail to account for the extremes of poverty or disability. But when the problem is approach in ways that avoid such statistics, income fully explains the geographic differences. Read our paper in the Journal of Urban Health.

Now, after years of being brain washed by the D-I-M-G-U-C-C-CF crowd, whose arcane incursions into the practice of medicine have pushed hospitals and physicians to the brink, hospitals are catching on. Socioeconomic differences are at the core of the problem of high utilization after all. Read “Getting to the Root of the Problem,” excerpted below from an article by Steven Ross Johnson in Modern Health Care. It describes the success of efforts to attack the sociodemographic roots of the problem. One example is Health Leads. With support from the Physicians Foundation, the Robert Wood Johnson Foundation and others, Health Leads enables healthcare providers to prescribe basic resources like food and heat just as they do medication. But solving Americas social problems cannot be left to the health care system. The entire nation has to wake up to the problem. Read on…..

Getting to the Root of the Problem (excerpted from Modern HealthCare)

Delores Banks is a 61-year-old diabetic with congestive heart failure who was hospitalized twice last year. She lives alone on the 15th floor of a senior public housing project in one of the poorest sections of Chicago. A recent two-week elevator outage stopped Banks from leaving her building on three occasions. She decided to simply stay in her apartment until it was fixed. That’s when the Sinai Health System’s disease-management team sprang into action. One member called the Chicago Housing Authority to expedite the repair work. “It just makes you feel like you’re not alone,” Banks said. “The elevator is working now, and I haven’t been stuck.”

Healthcare systems in impoverished areas are turning toward tackling the social conditions that lead to ill-health, but they may pay a financial penalty since payers still do not reimburse for those activities.

The emergency intervention was part of a Sinai program launched in 2011 to help patients better manage the chronic conditions that lead to frequent hospitalizations. But as the care coordination team members quickly discovered, their efforts had to reach well beyond phone calls to make sure Banks took her medicine or to remind her about doctor appointments. In addition to fixing elevators, they helped her pay for her drugs and assist her with transportation to see her doctor. Team members even guided Banks through the paperwork needed to move to another senior-living facility.

Sinai is one of a growing number of health systems across the country that have begun tackling the social, economic and environmental conditions in the communities they serve as part of their programs to reduce hospital readmissions and improve outcomes. They are responding to the well-documented association between poverty, joblessness, inadequate housing, poor nutrition and chronic stress and poor health outcomes. Only by addressing these social determinants of health, they say, will they be able to get better outcomes and improve the overall health of their local populations.

Income is the single largest social factor driving overall health. A recent report from the Robert Wood Johnson Foundation’s Commission to Build a Healthier America found that 23% of African-Americans who earned less than 100% of the federal poverty level had a health status that was “poor to fair” compared with 6.8% of blacks with incomes that were more than 400% of the poverty level.

Among whites, the disparity was even greater. Twenty-one percent of whites earning below 100% of poverty reportedly had “poor to fair” health compared with only 4% of whites making more than 400% of poverty. Education level is another indicator of health. According to the report, a 25-year-old college graduate can expect to live up to nine years longer than a 25-year-old who has not completed high school.

“Without a doubt, addressing the social determinants is a key part of improving health,” said David Williams, a professor of public health at Harvard University. “Imagine a mother bringing a child to the hospital who has asthma, and that asthma is driven by poor housing conditions. All the asthma medication in the world and the latest and best medicine in the world will not solve that child’s asthma problem if we treat the child and then send them back to live in the same conditions that made them sick in the first place.”

The evidence is overwhelming that poverty, homelessness, unemployment and hunger have a significant impact on the overall health of a population in communities where such conditions are prevalent. They have disproportionately higher rates of heart disease, diabetes, lung disease and cancer.

Not surprisingly, rates of hospitalization are higher, too. Near Sinai, the rate of hospitalization for those diagnosed with diabetes in 2010 was 35 for every 100,000, compared with 25 for every 100,000 in Chicago as a whole and 19 for every 100,000 nationally. In Banks’ neighborhood of East Garfield Park, the rate was nearly double the city average, where 50 out of every 100,000 residents are hospitalized because of the disease.

Providers seeking to address the social conditions of their most impoverished patients face a fiscal environment in Washington that is making their jobs more difficult. The Supplemental Nutrition Assistance Program, for instance, was slashed by another $8.6 billion over 10 years last week in the latest version of the Farm Bill. Such cuts have a direct impact on the health of the people who rely on food stamps. A recent study in Health Affairs found the risk for hospital admission for hypoglycemia in low-income patients with diabetes increased by 27% during the last week of the month—when food budgets are strapped and food stamps run out—compared with the first week of the month. The study found no such occurrence among populations with higher incomes.

“It is not reasonable to think that every healthcare provider has to become a social worker and solve all of these problems,” Williams said. “But we can put in place complementary resources where the provider simply has to refer that patient to someone who could connect them with resources to help solve the problem that is driving their underlining health conditions.”

Some health systems have begun addressing social issues with the help of third-party coordinators who focus on providing for a patient’s nonmedical needs. Health Leads of Boston, funded by the Robert Wood Johnson Foundation, helps healthcare providers obtain basic resources such as food, heat, electricity or housing for their patients. When a physician identifies patients struggling with basic needs, they’ll refer them to a Health Leads “clinic” in the healthcare facility. The advocate then helps the patients gain access to community resources that can help provide those services. “A patient can take a prescription for heat in the winter or to have their lights turned back on to a Health Leads desk to get it filled,” said Rebecca Onie, Health Leads CEO and co-founder.

But foundation-supported efforts such as Health Leads are far from ubiquitous in communities with the greatest needs. That forces providers such as Sinai to use their own dollars to help patients address the social conditions that may worsen their illnesses and make recovery from hospitalization more difficult. Even though such work can lower readmissions, no payer compensates them for paying to get a patient’s electricity turned back on or steady access to food.

Sinai is betting that participation in the CMS’ bundled-payment demonstration program may generate enough savings to help them finance such efforts. The program gives a set payment for care over a 90-day period for inpatients with either chronic obstructive pulmonary disease or congestive heart failure. If the cost of treating those patients comes under the target price, Sinai keeps the savings. If they go over the target amount, however, the difference must be paid back to Medicare.

Some advocates contend addressing the social determinants of health is the only economically viable solution for a system that spends more than $2.8 trillion annually on healthcare without producing the best outcomes. Clearly, investing solely in sick care isn’t getting results. A study published last December in the Journal of Public Health found that every $100 spent on healthcare in the U.S. increased a patient’s life expectancy by two weeks. In Germany, the same amount spent on healthcare increased life expectancy more than four months. According to the RAND Corp.’s Tamara Dubowitz, “on a population level, investing in social conditions as they pertain to patient health is certainly the most economically sound approach.”