Social determinants of health (SDoH)—broadly defined as the conditions in which people are born, grow, live, work and age—are predominantly responsible for health inequities and have been proven to greatly affect health outcomes. And when social needs, such as a lack of food or housing, are addressed at a systemic level, it creates lasting community impact. 


To effectively address SDoH inequities, healthcare organizations are realizing the value of partnerships, and increasingly, cross-industry partnerships. Today, the SDoH landscape requires involvement from organizations outside of payers and providers, including pharmaceutical companies, tech companies, universities, community-based organizations and other health-minded organizations. Nontraditional interventions need to be explored, and all parties stand to benefit from an influx of resources, expertise and new perspectives if quality partnerships are formed. 


Merck and ZS have partnered to evaluate the SDoH pharma/health system/payer landscape to develop a fresh perspective on how healthcare organizations can actively play a role and shape the future of SDoH programs. Healthcare companies, including pharmaceutical companies, have an opportunity to become more active and make a significant impact.

Healthcare payers and providers are actively working to better understand the ecosystem that affects patient health. They have found that by addressing SDoH inequities, they can achieve better health outcomes for patients and generate substantial value for the healthcare system. UnitedHealth Group, for example, has invested more than $400 million to help “build 80 communities in 18 states resulting in more than 4,500 new, affordable homes with onsite support services to help people live healthier lives.” UHG studies have shown that investments aimed toward addressing homelessness can result in ER admissions dropping by 60% and the total cost of care for an enrolled member can decrease by 50%.


Through investment in SDoH initiatives, such as addressing housing, lack of transportation or food insecurity, payers and providers also hope to lower healthcare costs and improve the patient experience. Given that the U.S. spent $3.337 trillion or 17.9% of gross domestic product on national health expenditures in 2018, tremendous pressure is being placed on payers and providers to move to value-based care—with the goal of maintaining quality care and lowering the cost of care. Payers and providers are also under pressure to address changing patient expectations by providing a personalized, transparent and seamless healthcare experience. By understanding the socioeconomic factors that affect patient health outcomes, stakeholders across the healthcare value chain have an opportunity to deliver meaningful impact, better meet customer and patient expectations, and help shape the healthcare landscape.


Traditionally, payers and health systems have addressed SDoH programs independently. But both segments recognize the greatest SDoH impact can be made through broader partnerships and coalitions. In fact, to fully address SDoH at a holistic level, partnerships that break down the silos across healthcare, public health and social services are needed.

Pharmaceutical companies can, and should, play an active role in impacting SDoH. SDoH actually influences every part of a pharmaceutical product’s life cycle from the point of research and development (through representative clinical trial recruitment), to product launch and how that impacts product growth, maturity and eventual decline in the market. Pharmaceutical companies are well-positioned to identify social risk factors and unmet social needs and can have an important role in addressing and mitigating those needs. While SDoH will impact the bottom line of different stakeholders uniquely, there is certainly value to be gained through participation by multiple parties within the healthcare industry and beyond. 

Health disparities are one of the most significant matters highlighted by COVID-19, making now the time to act. With the rise of telemedicine due to social distancing, the healthcare industry is being forced to face issues they’d previously avoided. The inequalities that exist regarding access to broadband and cellular data have highlighted the need for interventions in SDoH.

Unemployment has risen higher in three months of COVID-19 than it did in two years of the Great Recession while hospital systems have been surged well beyond their capabilities. Higher unemployment means more people may no longer be able to afford the medications they need to stay healthy and will have to deprioritize their health. Housing instability and food insecurity risks associated with unemployment have also been brought to the foreground. And, food insecurity, for example, can lead to other maladies such as malnutrition, obesity or diabetes.


Social isolation during COVID-19 has further impacted mental health, with 45% of adults in the U.S. reporting that their mental health has been negatively affected by the pandemic. Research also shows that job loss is associated with increased depression, anxiety, distress and low self-esteem, and may lead to higher rates of substance use disorder and suicide. Mental health issues increase an individual’s need to engage the healthcare system. All of these secondary effects caused by COVID-19 have created a feedback loop that, if not addressed, will only continue to increase health disparities and decrease the overall health of the U.S.


Lastly, organizations would be remiss to ignore the social and political unrest in the nation regarding people of color, especially because people of color tend to have poorer health outcomes in the U.S. due to their social risks and a lack of addressing their social needs. While broad populations are certainly impacted by certain diseases, SDoH plays a factor. Consider diabetes as an example: “Differences in demographics and risk factors between counties in the diabetes belt and the rest of the U.S. include a higher proportion of non-Hispanic African Americans, a higher prevalence of obesity and sedentary lifestyle, and a lower proportion of people with a college degree.”


Given these circumstances, the need to properly act on SDoH is more relevant than ever. Organizations are increasingly emphasizing environmental, social and governance (ESG) criteria and have already started to pledge to do more to help communities of color. In relation to SDoH, this means that the hurdles may be lower to get funding to support initiatives. It’s important, now, for healthcare organizations—including pharmaceutical companies—to engage in conversations around SDoH and take action to address change.

As pharmaceutical companies join with health systems and payers to consider additional investments in SDoH programs, three pillars should be closely evaluated: 


1. Creating productive partnerships

Organizations need to approach partnerships from a perspective of flexibility, transparency and co-creation, and ensure that they are value driven. Before partnering, organizations need to ensure they have internal support, capabilities, objectives and partnership evaluation criteria.


2. Assuring sufficient infrastructure

Organizations and their partners require sophisticated data infrastructure to build a successful SDoH program. Scaling an SDoH program is also challenging due to localized needs. Strong infrastructure capabilities can help in scaling by optimizing aspects of the program, such as data collection, training and marketing initiatives.


3. Measuring value

The preventive nature of SDoH programs creates a challenging proposition: How to measure value or return on an SDoH investment. There’s no standardized process to measure value and it’s important for an organization and the partnership to develop a methodology that identifies what their desired value is.


Throughout the course of an SDoH partnership, all parties should keep in mind a few guiding principles, as illustrated in Figure 1.

Organizations should objectively assess their own capabilities as well as barriers to addressing SDoH and seek out partners that can fill capability gaps or help knock down those barriers. Gaps could be knowledge based, access based, financially based or related to the underlying infrastructure needed to address SDoH.


The right partnerships can help build credibility for the operation and improve overall public perception of the program. For example, a coalition that includes a pharmaceutical company, a payer and a community-based organization (CBO) allows all parties to better address localized needs and gain access to a localized population. Such a partnership can give the pharmaceutical company membership data to reach the right people, while the pharma company can potentially supply the infrastructure and sophistication needed to execute on an SDoH initiative. Partnering with a payer can give the program credibility within the SDoH space and partnering with a CBO can give the program credibility within the community. Additionally, CBOs gain increased scale, resources and technical expertise, while payers receive external resources, expertise and access to key membership populations.


When establishing a quality partnership across pharmaceutical, health system and payer companies, it’s important to consider what constitutes a “good” partnership for SDoH engagements.


First, all parties must align on the objectives for SDoH initiatives. For example, if a pharmaceutical company wants to focus on a particular therapy area, it should find a partner that sees the value in addressing that area. Partnerships may extend to payer partnerships based on the channels where priorities align with the partnership initiator. Sometimes those partnerships may include a Medicaid program with a homogenous population in a state or region where a key membership population resides.


Organizational sophistication also plays a key role in successfully designing, implementing and operating an SDoH program. Having or investing in organizational resources that understand population health can be very valuable. It’s certainly important to understand population health as a concept before trying to address something like SDoH.


Lastly, and perhaps most critical, is making an organizational commitment to support SDoH initiatives. This may seem self-evident but considering the importance of partnerships to properly address SDoH, it warrants reinforcing.


Organizational commitment can take on many shapes and forms including, but not limited to, dedicating roles and resources to SDoH and including SDoH in company mission statements, 10Ks and long- and short-term investment goals.

Equally significant to finding partners is evaluating programs to invest in, based on how feasible it is to execute and scale them.


Sophisticated data infrastructure and resources are needed to properly address SDoH issues and later to scale the program as necessary according to the partnership objectives. Infrastructure needs can include such things as dedicated resources, appropriate technology or extensive community reach. For instance, considering the importance of data infrastructure and analytics to collect data, train personnel, increase awareness and expand initiatives, it can be advantageous to ensure the partnership can invest in or have access to this type of technology in SDoH engagements. There are now technologies that can capture detailed data, such as the mapping of social risk scores based on individual zip codes.


Beyond data capabilities, there is also a need for the organization to understand the broader concept of population health and the most effective ways to address it. SDoH is a broad and complex topic that should be addressed by individuals with experience or education in the population health arena.


By assuring sufficient infrastructure and expertise, a partnership has a strong foundation for success. 

Returns from a SDoH program can take multiple years to be realized. This requires organizational commitment and understanding prior to investment. All partners should align on the value of any potential SDoH programs and agree on the metrics for success for potential programs along with how and when those metrics will be observed.


The value of an SDoH program can range from a monetary return on investment, to improved public perception of an organization or even the investment’s societal contribution. Some ways healthcare organizations can define and subsequently measure value include being able to provide financial value for providers and patients alike, supporting the triple aim by lowering costs and improving the quality of healthcare through holistic interventions, serving as a gold standard for SDoH valuation, and creating reporting methods and standards for providers and social organizations to quantify valuation. There’s no one answer for how organizations should define value, but each organization needs to ensure it has a process in place that quantifies value and can support a sustained investment.


By defining value upfront, an organization can identify partners that have the same shared vision or objectives. This alignment allows a partnership to flourish, as partners can agree on a timeframe and put the necessary processes in place to quantify a return. This requires not only collaboration but also the underlying technology and skill sets needed to perform the analytics on the SDoH data. It’s imperative to have this infrastructure in place, as partnerships seek to determine the differences between an actual and projected outcome.

What does it take to successfully execute an SDoH program? The first step involves the co-creation and design of the initiative. This includes decisions on what SDoH to address, whether to address a true SDoH or an individual’s/community’s social need, who the target population will be, and how and when the value of the program will be measured.


Here’s a real-world example: A large payer recently decided to tackle the SDoH issue of transportation and partnered with a ridesharing service to address this for members. The partners picked a small subset of members in Chicago to pilot the program. Once this was identified, they thought about how to address the data infrastructure needed to execute such a program. This involved using the payer’s data on zip codes and access to technology, along with the ridesharing company’s services. The partners also aligned on measuring the value of their program through the number of missed appointments for non-emergency medical care in areas without optimal transportation alternatives.


Once SDoH initiatives have been designed and piloted, partners can decide whether to scale the program. During this step, organizations should evaluate the ability to scale a given program nationally by establishing a framework that evaluates how effective a program could be.. This includes looking at the technology needed, how localized the needs being addressed are and what resources are available.


Health disparities are extremely localized and nuanced. Organizations should focus on making their impact locally and developing a framework that helps determine if programs or parts of programs can be scaled to other communities. Small SDoH initiatives can make a big impact on their given populations and shouldn’t be overlooked or abandoned simply due to a lack of or difficulty in scaling. There are so many nuanced reasons for health disparities that it’s often better to identify if there are archetypes and design SDoH initiatives specifically with a target population in mind instead of coming up with a “one size fits all” solution and trying to broadly apply it to several populations.


A decision to scale includes scaling up technology and other resources. In the case of the payer and ridesharing partnership, this involved expanding their program to include members in all 50 states.

Merck and ZS’s partnership is dedicated to helping other healthcare organizations positively impact SDoH. Through this work, we are jointly committed to encouraging others to actively evaluate their organization’s role in SDoH programs.


This will be a new area of investment for most organizations outside of payers and providers, and it’s important to keep in mind some of the key hurdles an organization must clear to be successful. To recap: 

  • Focus on the types of partnerships that fill internal gaps and can be sustainable.
  • Prepare a strong business case to ensure there’s buy-in by senior leadership and associated financial commitment.
  • Focus on making impact locally, while developing a framework to determine if programs or parts of programs can be scaled to other communities.
  • Ensure the organization and its partnerships have the analytical rigor and data to measure value.
In today’s world, enormous opportunities exist for healthcare organizations and specifically pharmaceutical companies to become more invested in SDoH and make a significant impact within the populations they serve.