Investing in Health: A Federal Action Plan

Manatt on Health


By Melinda J. Dutton, Partner, Manatt Health | Kyla M. Ellis, Manager, Manatt Health | Rocco Perla, Co-founder, The Health Initiative | Rebecca Onie, Co-founder, The Health Initiative

Editor’s Note: Manatt Health and The Health Initiative have released a new white paper—funded by Blue Shield of California Foundation and the Commonwealth Fund—outlining options for the Centers for Medicare & Medicaid Services (CMS) to leverage its purchasing power, regulatory authority, intra- and interagency partnerships, and bully pulpit to address socioeconomic, environmental and behavioral factors collectively referred to as drivers of health (DOH). The Federal Action Plan for Investing in Health, summarized below, describes seven strategies for Medicaid, Medicare, the Marketplace and the Center for Medicare & Medicaid Innovation (CMMI) to change expectations of what the health system can and should achieve, as well as 44 associated policy and program changes to implement those strategies under existing legislative authority. To download a free copy of the full Federal Action Plan, click here.


In the wake of a pandemic that has pushed our healthcare system to its limits, crippled the economy and brought into stark relief longstanding racial inequities, we are faced with both the opportunity and the imperative to rethink the role of federal leadership in creating a healthier America. Over the past decade, policymakers and industry leaders have pursued significant changes in the way we deliver and pay for healthcare, moving away from incentivizing volume and high-cost interventions and linking payment more closely to “value.”

To date, these efforts have focused overwhelmingly on healthcare—attempting to change the way medical services are delivered and reimbursed. Yet improvement in healthcare is not enough to improve health. An estimated 20 percent of health outcomes are linked to medical care; the remaining 80 percent stem from socioeconomic, environmental and behavioral factors collectively referred to as drivers of health (DOH). A growing evidence base has established that addressing DOH can improve health outcomes more cost-effectively and equitably than medical interventions alone. At the same time, focusing on traditional measures of value-based care without addressing DOH and health equity may exacerbate access barriers and worsen racial disparities.

Efforts to address drivers of health are growing yet remain diffuse, lacking clear expectations of the appropriate role of healthcare payors, providers and regulators. Scalable, sustainable integration of DOH into the healthcare system requires greater alignment of financial incentives, development of shared assets—such as information exchange platforms and community-based social services networks—and new expectations about the role of healthcare providers and payors as employers, anchor institutions in their communities and stewards of public funds. This requires a federal action plan to Invest in Health.

The Centers for Medicare & Medicaid Services (CMS) is well positioned to help catalyze this change, accelerating market-wide integration of drivers of health into coverage, payment reform and delivery system transformation efforts on a national scale. CMS administers programs serving more than 145 million people, including Medicare, Medicaid, Children’s Health and Insurance Program (CHIP) and the Marketplaces, and operates with a budget of approximately $1 trillion. It is also well positioned for intra-agency cooperation within the Department of Health and Human Services (HHS), collaboration across federal departments, and partnerships with states and other public and private stakeholders.

The following seven federal strategies to Invest in Health, if deployed by CMS and its partners, have the potential to change expectations of what the health system can and should achieve:

  1. Address drivers of health in combating COVID-19 by, for example, providing housing supports, meal delivery, and internet or phone access to people who cannot isolate or quarantine in their current housing arrangements;
  2. Integrate drivers of health into payment policy for providers and payors by incorporating social risk factors (food insecurity, housing instability) into payment models;
  3. Develop shared assets that enable interventions to address drivers of health, such as information exchange platforms and community-based social services networks;
  4. Maximize participation in public programs that address drivers of health, including expanding eligibility, access and enrollment in Medicaid, as well as collaborating with other federal agencies to increase enrollment in key programs, such as the Supplemental Nutrition Assistance Program;
  5. Create new standards for drivers of health quality, utilization and outcome measurement across Medicaid/CHIP, Medicare and commercial payors;
  6. Make drivers of health central to CMMI’s innovation agenda, including encouraging more states to test the CMS-approved social service fee schedule developed in North Carolina; and
  7. Incentivize community accountability and stewardship by creating new expectations for federally funded healthcare providers and payors to address upstream drivers of health, including reducing wage differentials, addressing structural racism and contributing to multigenerational community wealth creation. 

Recognizing the profound impact of DOH on the country’s ability to tackle the COVID-19 pandemic and to address the racial and economic inequity it has exacerbated, in the first 100 days of the new federal administration, CMS should announce its intent to engage states, private payors, providers, consumer groups, community-based organizations and other healthcare stakeholders in a national partnership to Invest in Health.

To yield the greatest impact, this partnership should focus initially on a defined set of DOH domains and interventions that address the most prevalent individual and community DOH needs (especially in light of COVID-19), promote health equity, and have a strong track record of efficacy. CMS should work with internal and external stakeholders to expedite identification of target DOH domains and interventions that are ready, with appropriately aligned incentives and structural supports, to be brought to scale; develop additional policy/program changes that align incentives with these interventions and support the development of shared assets necessary for their deployment; and drive efforts to gather data and seed and assess innovation as we continue to build the evidence base for sustainable change.

Priority DOH interventions should have a strong or emerging evidence base for improved health outcomes and/or reduced costs and cost-effectiveness, be inclusive of populations disproportionately impacted by DOH, and allow for longer time horizons, as well as account for “wrong pocket” savings that might otherwise disincentivize investment. Over time, as experience and evidence grow, the number and diversity of priority domains and interventions should expand, with an eye to testing interventions addressing the unique needs of additional subpopulations and inclusive of a broader set of domains.

To ensure this vision is sustained, CMS should build it into multiyear strategic planning processes and annual objectives; create messaging to ensure the vision is disseminated and internalized within the agency and among its partners in a consistent way through its stakeholder engagement function and Office of Communications; define specific goals around market and agency progress and provide transparent tracking against those goals; establish targeted work groups to foster interagency collaboration; leverage existing mechanisms, such as standing calls, open-door forums, learning collaboratives and robust regional office infrastructure to engage with state partners; and use CMS’s bully pulpit with providers, plans and patients to align the market around Investing in Health.

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