The Issue

Health care organizations are increasingly investing in services to meet patients’ social needs in efforts to improve their health and reduce spending. Medicaid programs are well positioned to support these experiments, but there is limited evidence of how Medicaid dollars are being used in practice and which strategies are most effective. Writing in Health Affairs, researchers supported by the Commonwealth Fund examined how Oregon and California are supporting direct services like housing, food, and legal assistance as well capacity-building programs for health care and community-based organizations such as staff training and technology.

How Oregon and California Are Meeting Medicaid Patients’ Social Needs

Both Oregon and California received waivers that gave them greater flexibility to pay for social supports not typically covered under Medicaid. In 2012, Oregon created coordinated care organizations (CCOs), which can use capitated funding to pay for health-related social services. In 2016, California launched the Whole Person Care pilots, in which county health departments, managed care plans, hospitals, and community groups partner to provide health care and social services to high-risk Medicaid beneficiaries.

Social services for Medicaid beneficiaries in Oregon and California were paid for through three different funding streams: traditional funding for covered services, alternative payment approaches, or savings from coordinated care organization or managed care contracts

In both states, the most common intervention was care coordination. In Oregon, community health workers helped people access both health and social services, while in California navigators offered intensive services to particular groups, such as the homeless and those leaving prison.

Housing was also a major focus. In Oregon, one rural CCO developed 20 tiny homes for the homeless. California counties invested in medical respite facilities for the homeless, onsite supportive housing services, and efforts to help people stay in their homes, such as training in household budgeting.

Services were paid for through three different Medicaid funding streams: traditional funding for covered services such as transportation, alternative payment approaches (e.g., incentives or bundled payments), or savings from CCO or managed care contracts.

The Big Picture

Oregon and California have supported direct social services as well as efforts to build health care and community-based organizations’ capacity to meet beneficiaries’ social needs. Some hope these experiments will build the evidence base needed to make the case for further Medicaid investments in social services, while others worry that the health care sector may lack the skills and resources to tackle complex social problems.

Program leaders noted that the scale of Medicaid beneficiaries’ needs for housing, food, and income outstrips resources available to address them, and that funding for social services may not be sustained over the long term. Some also noted that partnerships among health care and community-based organizations can be challenging, given their differing approaches to serving low-income clients and the latter’s limited staff and resources.

The Bottom Line

Some states are channeling Medicaid funds into experiments to address beneficiaries’ social needs, blurring the boundaries between health care and social services.