SDOH: What it is, Why it Matters, and How it Can Save $$$ on WC Claims

Nancy Grover

Las Vegas, NV ( – Which has more impact on an injured worker’s recovery – medical care or socioeconomic factors? From an outcomes – and cost – perspective, socioeconomic issues are, hands down, the most significant. In fact, a recent study found that better coordination of medical and social services “improves health outcomes and reduces expenditures by 10 percent annually per person compared to a control group,” according to the latest Workers’ Compensation Benchmarking Study by Rising Medical Solutions.

“The actual medical care an injured worker receives [accounts for just] 20 percent of their health,” said Denise Zoe Algire, director, Risk Initiatives & National Medical Director of Albertson’s Companies. “Where they live, their access to basic necessities, or their home environment can have a profound impact on their total health – from a cost and outcome standard.”

Socioeconomic factors are responsible for 40 percent of a person’s health, according to the American Hospital Association. Panelists speaking during a session at the National Comp conference here discussed Social Determinants of Health and ways the workers’ compensation system can address them for better outcomes.


Access to clean water and quality food; social support; environments where people grow, work, learn, live and mature can have a profound effect on a person’s health, and can often be the cause of delayed recoveries of injured workers. But these so-called Social Determinants of Health are often overlooked by workers’ compensation stakeholders, as they focus primarily on the occupational injury/illness. However, that is starting to change.

“Twenty-five percent [of respondents] can identify these risk factors,” said Rachel Fikes, CXO and director of the Workers’ Compensation Benchmarking Study, and moderator of the panel discussion. “Why are they so important? What’s the financial impact of making it a focus or not?”

While most respondents to the Benchmarking Study said they had not implemented strategies to equip claims professionals to identify and leverage resources with potential health disparities, some have taken steps. Among the solutions being utilized are:

  • Training in culturally sensitive communication for claims staff that identifies barriers to recovery
  • Promoting health literacy through education, based on injured workers’ needs
  • Leverage data to identify SDOH risk factors
  • Provide resource guides for community-based services to assist injured workers with access to social services

Giving injured workers tools to help with SDOH can improve resiliency, something demonstrated by higher performing claims organizations

“For claims staff, we ask them during contacts with injured workers if they see the injured worker having some anxiety or fears, and to offer and recommend injured workers utilize their EAP benefits. That’s a fast way for them to get a few sessions with a therapist to talk about their fears, anxiety,” said Tyrone Spears, chief of the Workers’ Compensation Division for the City of Los Angeles . “It’s been very helpful because a lot of times there may be anxiety [for example] about how to feed their family. Having a person to talk to” has helped.

SDOH Approach

A recent study by Price Waterhouse Cooper’s Health Research Institute identified several additional key steps to begin a SDOH approach.

Build the collective will. Physicians, pharmacists, therapists, nurses and other health specialists working collaboratively can best address the root causes of disease, according to the PwC study. “It will take a coalition of partners who may need to stretch their roles, but leaders must find ways to show prospective partners how their goals meaningfully align,” the study says. “Constructing the right coalition also will require looking beyond the sector and traditional partners to consider the community groups, government agencies, universities, retailers, technology companies and new entrants that might contribute.”

Develop standard but adaptable frameworks. This involves building a guiding framework that allows the partners to work together effectively towards their common purpose. “The framework should establish clear roles and set forth a common vocabulary, goals, definition of value and decision-making protocols so the team can move forward on its road map for change,” the study said.

Generate data insights to inform decision making. “Selecting the program investments most likely to spark health improvement can seem a mysterious endeavor,” the study authors wrote. “But leaders are finding that predictive analytics can illuminate areas to target that will mean less time and money wasted chasing ineffective interventions.” A global company used data in 2008 to estimate its sick leave rate for employees in 2020, based on epidemiological factors. It used predictive analytics and targeted corporate health management programs to prevent groups of employees from becoming sick or developing chronic conditions through preventive measures, such as optional health checks.

Engage and reflect the community. Stakeholders should consider the conversations that frontline health workers will have and how they will be viewed in each community. They need to be mindful of such things as cultural differences and geographic disparities in resources between states and regions. Life expectancy, for example, may be vastly different for people living in the same country.

Measure and redeploy. “Partners must use evidence to fine-tune and grow social determinants of health efforts and to keep partners accountable,” the study said.

The effectiveness of SDOH strategies works best if the organization is already focused on diversity, equity and inclusion. “It’s an area we have to look into,” said Vickie Kennedy, assistant director, Insurance Services at the Washington Department of Labor & Industries. When we “focus on the financial side of things we often see these opportunities or needs get pushed aside as employers try to reduce the scope of their liability, failing to see that investing some additional resources early can pay off dividends.”