Investing in Social Determinants of Health (SDOH)
November 17, 2020
TripleTree is a proud sponsor of the 2020 KLAS Digital Health Investment Symposium – a virtual event bringing together leaders from across the healthcare industry, including payers, providers, digital health companies and investors, to share insights and refine digital health investment strategies by using the voice of 30,000 providers.
Ahead of this year’s symposium, Riley Pierce, Strategic Relations and Marketing Content Specialist intervewed Nate Chivers, Director at TripleTree and Adam Letson, Vice President at TT Capital Partners on the topic of investing in Social Determinants of Health (SDOH). We’re pleased to share the conversation below, which is also available on the KLAS website.
Over the past 18 to 24 months we’ve seen the social determinants of health (SDOH) market really evolve into its own category. And the need for SDOH software and services has become acutely apparent during the pandemic.
We’re excited to discuss SDOH at our upcoming Virtual Digital Health Investment Symposium DHIS!
In advance of the virtual symposium, I spoke with Adam Letson from TT Capital Partners (TTCP) and Nate Chivers from TripleTree to hear their perspective on SDOH as investors.
Riley: What is your background with TripleTree? What experience do you have investing in SDOH focused companies?
Adam: I am a Vice President at TTCP, the growth equity arm of TripleTree. My career investing in growth companies began when I joined TTCP in 2013. I rejoined TTCP after business school in 2017, which brings me to where I am today.
My first exposure investing in SDOH began with our portfolio company, Integra ServiceConnect, which has since merged with MedZed. The combined company unites physical and social care to improve the outcomes of complex patients, so addressing social barriers is a critical component of its service delivery and value proposition.
Nate: I’ve been an investment banker with TripleTree since 2014 representing clients that serve in this broader ecosystem. As a firm, we were spending time in the SDOH category before it was even defined as its own category.
We work with businesses that are serving health plans and providers to engage patients on a deeper level. Besides the financial or care management goals, these SDOH companies performed services that enabled them to capture the ancillary benefits that being in the homes and communities of patients provides. They were able to get an inside look at everything from available nutrition, to social environment, to the organization of a patient’s medication and its potential impact on adherence.
Riley: What is the energy around SDOH vendors in healthcare?
Adam: The energy in SDOH first and foremost follows the macro trend around the shift to value-based care, which reinforces the need to address the root causes of cost drivers in our healthcare system.
The pandemic has further elevated social factors as individuals and industry stakeholders alike grapple with the spread of COVID-19 and the impact of lockdowns and social distancing on preventative care in a time of significant economic uncertainty.
I think the pandemic has put a renewed focus on the issues that social determinants present. During the pandemic people have struggled to get out of their homes to get healthy meals. Or they have delayed going to receive care to avoid possible exposure.
Nate: There is an increasing need for SDOH solutions. There are more seniors and people on the lower end of the socio-economic spectrum now than ever before. Chronic conditions, mental health, and behavioral health all impact how an individual engages in their own care. All of these individuals require different types of treatment, care, and attention.
Then as Adam said, the changes around the financial mechanisms for healthcare certainly have shown a spotlight on the need to more properly address SDOH. Today, the healthcare system needs to analyze how a specific individual is cared for and providers are similarly reimbursed for that specific individual and their needs. That level of specificity has changed the way we deliver this whole ecosystem, SDOH included.
Riley: What are the current challenges facing the SDOH market?
Adam: There are great tools out there to identify social barriers and determine resources to help. While that is great, translating these insights into action at the ground level is required to improve outcomes and drive sustainable ROI. Driving action on the ground requires alignment of multiple stakeholders, including payer, provider, and community-based resources, and how a company either owns or connects to the “last mile” is an important factor when we evaluate SDOH-focused solutions.
The question of ROI in social interventions is a little bit of a chicken and the egg problem. We’ve seen health plans make large commitments to things like housing and healthy food, but how these investments translate into scaled adoption of newly approved SDOH benefits remains to be seen. It will be interesting to see how health plans balance funding SDOH interventions before there’s enough evidence to prove the ultimate reduction in downstream medical costs.
Nate: I agree with Adam, at the end of the day someone has to pay for all of this so how do we prove the ROI? There are so many elements that go into an individual’s care. Is their health improving because of a clinical pathway? Or because they are now getting three square meals a day?
I think everyone believes that there is an ROI but proving that will take a lot of work over the coming quarters and years.
Then, the other ever-present challenge for SDOH is integrating the non-clinical service providers with the healthcare system. How do we get both sides to all be working towards the same kind of care plan, and can we better enable them to share information in real-time to do that? Success at doing so will require technology platforms that allow for synchronous data transfer between the clinical and non-clinical resources, and obviously doing that through a platform with the data security required to be HIPAA compliant.
Riley: What do you see happening in the future for SDOH?
Adam: I think at some point social and physical care will no longer be distinct but unified and integrated. Reaching this end state will require continued investment in the integration of disparate datasets to enable better – and actionable – insight the circumstances surrounding one’s health.
Overall, the universal acknowledgement of SDOH is a good thing for an industry working to deliver higher quality care and lower costs. It will take time, broader adoption of SDOH solutions, and further evolution of the role payers and providers play to start seeing sustainable change.
Nate: The SDOH market is going to have to continue to iterate and blow out these innovative companies to identify what is actually going to work. SDOH can’t sit in a silo the same way clinical care can’t sit in a silo, so there needs to be investment in strong partnerships that add value and drive real change.
At the end of the day, innovation follows investments and funding. That will become a bit of a snowball effect relative to the industry putting time, energy and resources into developing solutions that are appropriately funded.
For more on topics to be discussed at this year’s DHIS, check out these other two blogs published in collaboration with TripleTree:
For more on SDOH you can check out these other recently published blogs:
DHIS, KLAS, SDOH, Social Determinants of Health