Medicaid and other payers are recognizing that health outcomes and costs are driven by factors beyond clinical care. These factors are rooted in the community and include issues such as housing, food security, transportation, and the neighborhood environment in which people live, learn, play, pray, and work. Consequently, payers are exploring ways to move care upstream and collaborate with community partners to connect patients to health-related, nonclinical services. However, this shift is not without its challenges and perhaps chief among them is figuring out how to pay for these upstream interventions, meaning those that address nonclinical needs.

This Health Affairs blog post highlights practical approaches that state Medicaid agencies, health plans, providers, and other stakeholders can use to overcome the challenges to investing in efforts that address social determinants of health under Medicaid. These lessons were identified as part of Payment Reform for Population Health, an initiative sponsored by the Robert Wood Johnson Foundation and led by AcademyHealth and Nemours Children’s Health System that worked work with Maryland, Oregon, and Washington State to address the payment challenge.

A companion set of resources is also available that provide detail on how states can use existing Medicaid authority to finance innovative upstream prevention and population health initiatives — such as financing considerations for incorporating community health workers into chronic disease prevention efforts.