4 strategies to advance the definition of health spending

As healthcare spending continues to trend upward, an increasing number of healthcare policy researchers are interested in determining a cross-disciplinary approach to change how and where we spend healthcare money.

A recent report  from Leavitt Partners, in conjunction with the Robert Wood Johnson Foundation, conducted an assessment to better understand efforts to develop a broader, more encompassing definition of health spending. The report defined total health spend as health expenditures that extend beyond traditional clinical care costs, including costs related to social determinants of health.

Here are some key takeaways from the report.

1. Current spending on medical care is growing, but does not always translate to improved health. CMS predicted total medical care as a percent of gross domestic product will increase from 17.5 percent in 2015 to 20.1 percent by 2025. But the rise in expenditure has not correlated to improved health. Internationally, the United States ranks poorly in health outcomes and risk factors, such as life expectancy, infant mortality and obesity.

2. Research has shown a positive relationship between spending on social services and improved health. Researchers and public policy organizations have started to explore how investments in community health beyond clinical care impact population health.  

3. Leavitt Partners recommended four strategies healthcare professionals can adopt to advance the concept of total spend on health outcomes.

  1. Determine appropriate timing for moving toward consensus. Currently, the industry is divided as how to define, measure and calculate total spend on health. To advance study and progress in this area, it is important stakeholders agree on a set of parameters.
  2. Ensure all relevant voices are included. Experts from public health, social services, education, transportation, economic development housing, behavioral health, consumers, community stakeholders, policymakers and other professionals should be included in discussions on how total spend can best improve community health.
  3. Determine a strategy for establishing guiding principles or a national framework for total spend on health calculations.After engaging the proper stakeholders, localities can begin to determine budget calculations for total spend on health.
  4. Move from theory to action.The final step is to implement budget calculations and invest health spend in alternative ways to positively impact social determinants of health.

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