Four Insights from Health Insurance Companies Investing in Community Development and Health Equity

August 8, 2022

What we know

The experiences from the Covid-19 pandemic have taught us about pervasive and persistent disparities across our communities, particularly related to health equity. These lessons offer an important opportunity to address these gaps to build a more equitable, healthier, prosperous, and resilient future for all. Collaborations between hospitals, other healthcare organizations, including insurers, and community development organizations1 illustrate the potential for aligned resources and engagements to have a meaningful impact. However, the pandemic strained the capacities of both healthcare systems and community development organizations to continue initiating and advancing these collaborations and compelled the need to look more broadly for new partners.

Although the pandemic continues to evolve across the country, many organizations and sectors are already taking action to build resilience to face the next crisis. Building deep and effective partnerships with the community itself and broadening collaborations to include new partners within and across sectors maximizes this capacity. The growing evidence that health system-level interventions focused on addressing social determinants of health (SDOH) like food security, housing stability, social supports, and literacy can improve outcomes and reduce costs2 is motivating a growing number of states to include SDOH language in their contracts with health insurance companies3. However, one of the main hurdles to SDOH programmatic interventions is the lack of resources either within the healthcare organization and/or at the community level to support these efforts.4

What are the social determinants of health?

The social determinants of health (SDH) are the non-medical factors that influence health outcomes. They are the conditions in which people are born, grow, work, live, and age, and the wider set of forces and systems shaping the conditions of daily life. These forces and systems include economic policies and systems, development agendas, social norms, social policies and political systems. The SDH have an important influence on health inequities - the unfair and avoidable differences in health status been within and between countries. In countries at all levels of income, health and illness follow a social gradient: the lower the socioeconomic position, the worse the health. The following list provides examples of the social determinants of health, which can influence health equity in positive and negative ways: income and social protection; education; unemployment and job insecurity; working life conditions; food insecurity; housing, basic amenities and the environment; early childhood development; social inclusion and non-discrimination; structural conflict; access to affordable health services of decent quality.

What we found

This blog details preliminary, high-level findings from interviews and focus groups we conducted with key stakeholders across the healthcare system to understand the roles, barriers, motivations, and incentives to health insurance companies addressing SDOH and health equity. Our research began with a background interviews to better understand the topic and to shape the interview protocol. Through virtual focus groups, we then spoke to 25 leaders at health insurance companies, associations of health plans, large healthcare providers, and health policy researchers. Our conversations with focus group participants revealed several examples of health insurance companies testing SDOH programmatic interventions, however, we also heard about structural or systemic barriers that hindered health payors from making upstream community and economic development investments, such as in affordable housing, early childcare centers, and grocery stores, and other community supports that have had proven positive effects on health outcomes. Transcripts from all interviews and focus groups were analyzed by the research team and synthesized into the following emergent themes:

Theme 1: Meaningful investments to improve health equity across a community require intense coordination among multiple partners and sectors. However, a member-driven business model incentivizes competition rather than the coordination needed to deliver population-level outcomes. The fragmented health payer system is a root cause of this misalignment. Interviewees questioned how health insurance companies could be expected to invest in affordable housing, for example, when only some of their members may benefit.

Theme 2: Authentic community engagement to achieve “whole community health” requires the alignment of resources from multiple sectors. However, interviewees reported a fundamental misalignment between the capacity of health insurance companies and the capacity of community partners. Interviewees spoke of the challenges of engaging with grassroots, neighborhood-based organizations and expecting population-wide outcomes. This often resulted in ‘investments’ that were small in scale, limited in scope, and lacking an evidence-base that would support replicability.

What is health equity?

According to the World Health Organization “health equity is the absence of unfair, avoidable or remediable differences among groups of people, whether those groups are defined socially, economically, demographically, or geographically or by other dimensions of inequality (e.g., sex, gender, ethnicity, disability, or sexual orientation). Health is a fundamental human right. Health equity is achieved when everyone can attain their full potential for health and well-being. Health and health equity are determined by the conditions in which people are born, grow, live, work, play and age, as well as biological determinants. Structural determinants (political, legal, and economic) with social norms and institutional processes shape the distribution of power and resources. People’s living conditions are often made worse by discrimination, stereotyping, and prejudice based on sex, gender, age, race, ethnicity, or disability, among other factors. Discriminatory practices are often embedded in institutional and systems processes, leading to groups being under-represented in decision-making at all levels or underserved. Progressively realizing the right to health means systematically identifying and eliminating inequities resulting from differences in health and in overall living conditions.

Theme 3: Interviewees spoke to the importance of data in addressing the SDOH, but also cautioned that data must be used equitably. Equity challenges cited include data collection/outreach barriers, incomplete and missing race and ethnicity data, interoperability issues, and evaluation and measurement challenges. Interviewees stressed that mandating effective data collection would help to address the lack of standardization, the range of understanding and implementation capacities, and the need for technical infrastructure to document and measure outcomes. Well-documented program outcomes of social needs interventions can inform system improvements, which should motivate investment.

Theme 4: Interviewees challenged us to go beyond the social determinants and address the structural determinants of health (see call out box) especially as they relate to the value placed on the healthcare workforce. The healthcare workforce incorporates a broad spectrum of skills and credentials. Many healthcare jobs are low wage and expose workers to significant health risks, as evidenced by the pandemic. Discussions regarding health equity must address this base of low-wage workers who are overwhelmingly women of color.

What are the structural determinants of health?

The structural determinants of health, according to the World Health Organization, include “all social and political mechanisms that generate…stratification and social class divisions in society and that define individual socioeconomic position within hierarchies of power, prestige and access to resources”. The structural determinants cause and operate through intermediary determinants of health—housing, physical work environment, social support, stress, nutrition and physical activity—to shape health outcomes.


The pandemic has shifted the conversation about healthy communities from something that affected “other” people and places to the understanding that when some of us are vulnerable to a public health crisis, all of us are vulnerable. While the COVID-19 pandemic has helped illuminate this point, these realities have existed for generations. Communities that are the most vulnerable from a health perspective (e.g., those with high exposure risk and/or pre-existing conditions) and an economic standpoint (e.g., low-wage essential workers) present risk for the entire population that relies on them.

Through the two-phased, focus-group interview process, we were encouraged to find that health insurance companies recognized the important impact of the social determinants on the overall health of their members. However, coordination of community investments across sectors, alignment of capacity and resources, data collection, and structural determinants all remain significant barriers to achieving health equity.

This post was published with the permission of Build Healthy Places Network; it appears in their Publications and Reports, a gathering place for insights to cross-sector work addressing social determinants of health. This post represents findings from a project developed by the Build Healthy Places Network and staff of the Federal Reserve Bank of Chicago. With a mandate to ensure full employment, the Federal Reserve is interested in factors that both affect the health of community residents, as well as the conditions of the health care workforce. The authors would like to acknowledge the important contributions of Zachary Taylor to this project during his time at Build Healthy Places Network.


1 Quantifying Health Systems’ Investment In Social Determinants Of Health, By Sector, 2017–19

2 Heisler, M., Navathe, A., DeSalvo, K., & Volpp, K. G. (2019). The role of US health plans in identifying and addressing social determinants of health: rationale and recommendations. Population health management, 22(5), 371-373.

3 Artiga, S., & Hinton, E. (2019). Beyond health care: the role of social determinants in promoting health and health equity. Health, 20(10), 1-13.

4 Eisenson, H., & Mohta, N. S. (2020). Health care organizations can and must incorporate social determinants. NEJM Catalyst Innovations in Care Delivery, 1(3).

The views expressed in this post are our own and do not reflect those of the Federal Reserve Bank of Chicago or the Federal Reserve System.

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