Editor’s Note: The April 2020 issue of Health Affairs journal includes the article, “The Organizational Risks Of Cross-Sector Partnerships: A Comparison Of Health And Human Services,” by Shauna Petchel and colleagues. In response to the latest world events, we asked the authors to put their work in the context of the current coronavirus crisis.
As COVID-19 cases have swept across the country in recent weeks, business and school closures, and widespread layoffs have driven an unprecedented surge in need for financial assistance. People are turning to community based social services organizations in ever higher numbers for help with food, rent and utility assistance.
Identifying basic needs now, and working systematically to address these needs through community-level responses, may help to mitigate a surge in longer term population health consequences and avoidable high cost care down the road. Health systems that take steps to identify unmet social needs in their patients in the months ahead may be better equipped to make data-informed decisions about how to respond to social needs of their populations going forward.
COVID-19 Reveals The Fragility Of Our Safety Net.
However, in a recent study of health and social services organizations published in the April issue of Health Affairs, my coauthors and I found that even prior to COVID-19, health and social services leaders reported doubts that the social safety net in their communities had capacity to meet the increased demand that might result from health systems making new referrals to social services programs as part of social needs screening and care coordination initiatives.
The scale of social services programs for the organizations interviewed in this study was often dictated by the availability of philanthropic or public grant funding, rather than the level of need in their community at a particular moment in time. Nonprofit organizations relied on grants from state and local governments to fund basic needs programs; they raised donations or private philanthropic grants from the community to cover the gap between public reimbursement levels and the full cost of providing these services.
Our research found the lack of sustainable payment mechanisms for social services organizations to respond to new client referrals increased the perceived risk of entering into partnerships to coordinate services with health systems. New population health, or care coordination initiatives were sometimes perceived by community-based social services leaders as competing with their existing programs for limited charitable funding. Without explicit strategies to link health system referrals for social needs to new reimbursement mechanisms for social services, the capacity of community programs to respond may be limited. Oregon, like other states, is now experimenting with allowing Medicaid payments for “flexible services,” (e.g. non-medical services) as well as encouraging value-based payments that can support health-related social needs. These innovations, though, are relatively new and adoption by health systems has so far been limited.
Human Services Organizations Are Financially Vulnerable At The Moment They Are Most Needed
Like health systems, community-based organizations supporting basic needs are now facing greater financial uncertainty at the same time that they are seeing increased demand for their programs. For example, affordable housing organizations that house low-income working families face a coming wave of uncollected rent payments. Food bank networks are seeing depleted food inventory and may face shortages in the coming weeks. Many spring fundraising events that raise unrestricted funds for community programs have now been canceled for 2020 due to physical distancing rules and stay home orders, and these challenges may persist into the fall. These disruptions come on the heels of a decline in U.S. charitable giving in 2019.
Federal relief for small businesses has been particularly challenging for nonprofit organizations to access so far. This led the National Council of Nonprofits last week to call for additional relief designed specifically for community-based organizations, including priority access to the Paycheck Protection Program for basic needs organizations, as well as relief for nonprofit employers with 500 to 1,000 employees who were ineligible for the first round of federal small business relief due to their size.
Payment Models For Basic Needs Matter As Well As Funding Levels
These additional financial pressures may compromise community-based social services organizations’ ability to respond to referrals of patients from health systems or develop integrated service delivery models in the months ahead.
In responding to COVID-19, groups providing services such as transportation assistance, home meal delivery, or assistance for utility bills may face additional challenges responding to health system requests to coordinate service delivery. Funding restrictions for these programs can vary across local or regional geographic lines, for different age groups, or by residence status of individual clients.
In our research, leaders of health and social services organizations reported their efforts to work across sector lines were already hampered by narrow categorical restrictions regarding which people social services organizations were allowed to serve with existing grant or contract funding—restrictions that in many cases did not align well with the geographic or insurance-based definitions of service populations typically seen within health care delivery. Social services leaders have expressed interest in entering into more sustainable payment arrangements with health systems or payers, rather than reliance on grants, as a way to overcome these challenges and support sustained integration over time. While these payment arrangements are not a substitute for federal programs supporting basic needs, they are an important consideration in designing integrated models of care that give social services organizations options to respond when unmet needs are identified by health systems.
The Need For Holistic, Coordinated Responses Is Greater Than Ever
Cross-sector collaboration already posed challenges and risks to health and social services organizations prior to COVID-19. The additional uncertainty of the months ahead may exacerbate the perceived risks of collaboration and the fragility of community-based nonprofits’ financial positions, despite their central role in the public health response to COVID-19.
Nevertheless, cross-sector partnerships will be an important mechanism in the months and years ahead for ensuring that health care providers and health systems can meet the social needs of their patients. The need for sustainable payment models that support coordination of health and social services delivery is thus more urgent than ever, as both sectors respond to increased needs and address new operational challenges posed by stay-home orders and physical distancing.
There are several ways policymakers and philanthropic funders can provide immediate relief for organizations on the front lines of the COVID-19 crisis, while laying the foundation for more integrated and sustainable models of care in the future. Both these groups can work to strengthen health systems’ ability to screen for unmet social needs and use these data for both population health planning and individual care coordination, providing operational and technological support for health systems to ramp up these efforts. Where possible, measures of social need and data collection mechanisms should be standardized across health systems and in alignment with definitions used by human services organizations; this will support community-level and cross-sector planning.
Policymakers can remove barriers to health and social services organizations working together to address unmet social needs for Medicaid enrollees. At the federal level, Medicaid payments for non-medical services could be expanded to directly address urgent needs for food or shelter, when meeting these needs is the most cost-effective way to protect the health and safety of enrollees. State policymakers can ensure that their states are maximizing options to address social needs in state Medicaid plans, including promoting value-based payments that grant health systems flexibility to develop tailored interventions with social services partners. Public and private funding mechanisms can avoid penalizing both health and social services organizations for the time they spend developing new integrated care models by ensuring these efforts are recognized as programmatic rather than administrative costs.
Policymakers can also protect and stabilize funding mechanisms for community-based nonprofits that may experience revenue losses due to temporary closures. For organizations that rely on service payments from state and local governments, payments could be stabilized at pre-COVID-19 levels to help organizations avoid exhausting their operating reserves and jeopardizing their ability to re-open in the weeks ahead.
Philanthropic funders can help offset community-based organizations’ losses from canceled community events and other activities that would have generated unrestricted operating revenue for basic-needs programs. These losses may be easier for organizations to estimate at this stage when compared with forecasting other financial consequences of the virus.
COVID-19 will require coordinated, community-level responses from health and social services organizations. Yet reliance on fragmented and episodic funding streams to finance basic needs programs leaves community-based nonprofit organizations vulnerable to financial distress or closure at the precise moment when their services are most needed.
As we look for solutions to the public health and economic challenges ahead, policymakers and organizational leaders can leverage cross-sector partnerships, social-needs screening, and sustainable payment models for integrated care, to ensure that the community response to COVID-19 lays a foundation for a robust and coordinated recovery.