In Times of Constrained Resources, How Can States Innovatively Fund Health-Related Social Needs? Thoughts from Louisiana and Virginia

State leaders know that low-income and vulnerable populations often need services and supports outside the scope of a single state agency—or a single funding stream—to live healthy lives. In some states, braiding or blending funding streams lends programs a measure of flexibility, efficiency, and resiliency that a single source of funding might not. In the context of proposed federal changes that would reduce Medicaid spending by an estimated 35 percent by 2036 and reduce funding for state public health programs, some states are considering whether innovative funding models could help them address the health-related social needs of vulnerable residents.

A recent NASHP webinar profiled two states’ use of blended or braided funding streams to help meet the health-related social needs of vulnerable low-income populations. Louisiana’s Permanent Supportive Housing program likewise draws upon multiple funding sources to provide housing and services for low-income and homeless people with disabilities. Virginia’s Children’s Services Act (CSA) brings together several funding streams to meet the needs of at-risk youth and their families. The webinar used those programs as a springboard for a discussion of the importance of addressing the social determinants of health, and the flexibility and resources states need to do it.

Holistic approaches to health
State health officials must spend their health care budgets overwhelmingly on clinical services, rather than on improving the environments, behaviors, and services and supports that are key building blocks of health. However, Louisiana and Virginia have shown that braiding and blending previously-siloed funding allows them some room to address the social determinants of health and upstream prevention in ways that conventional funding couldn’t.

“What makes us healthy is so much more our environment, our behaviors, the services and supports around us rather than just the medical care spend. I challenge our state leaders to think beyond the health care paradigm and into the environment and the community. I believe it is only through those interventions that we will truly bend the cost curve and deal with high utilizers.” Dr. Rebekah Gee, Secretary of the Louisiana Department of Health

Working across agencies can also help states integrate fragmented systems, such as a mental health system that spans corrections facilities, Medicaid, Medicare, and public and private facilities. The efficiencies produced by crossing silos can also make it easier for vulnerable residents to access services. For example, Louisiana worked with the U. S. Department of Health and Human Services to coordinate eligibility and enrollment for the Supplemental Nutrition Assistance Program (SNAP) and Medicaid expansion. Similar flexibility to align applications for subsidized housing and Medicaid would help states streamline permanent supportive housing programs.

“When you look at Virginia’s Children’s Services Act, there are things that we can pay for that would not normally be paid for through a 4E foster care program or a Medicaid program. The funding allows some flexibility to provide for fuller life experiences for the children served by the CSA.” — Dr. William A. Hazel, Jr., Secretary of Health and Human Services for the Commonwealth of Virginia

Global budgeting across populations would likewise encourage states to expand cross-agency partnerships, and would acknowledge the interconnectedness of high-quality education, stable housing, nutritious food, safe places to play and exercise, and effective and accessible physical and mental health care.

“Let’s make sure we have universal Pre-K, let’s make sure our education system is adequately funded, let’s make sure we have the basics and foundations of the social determinants of health,” added Dr. Gee.

How would states use increased flexibility to address upstream prevention and the social determinants of health?
Louisiana and Virginia show that a great deal of innovation is already happening in states. When asked what sort of increased federal flexibility would help them augment their efforts, state policymakers had a number of suggestions:

  • Make the Medicaid waiver process easier for states, especially around the social determinants of health. Produce templates or share model language that states can use when applying for waivers that address social determinants.
  • Give states more flexibility to cover some services, such as tenancy supports, without requiring a Medicaid waiver or state plan amendment.
  • Prioritize and invest in prevention and upstream intervention, even though measurable results might take longer to materialize than leaders might like.
  • Help states to keep and reinvest savings from initiatives that successfully lower costs and improve health by addressing social determinants.
  • Align the policies of programs funded by the U. S. Department of Housing and Urban Development, the Administration for Children and Families, the Substance Abuse and Mental Health Services Administration, and Medicaid and Medicare. Aligning the vocabulary used to describe eligibility criteria, beneficiaries, and covered services and supports would be particularly helpful in facilitating communication and data sharing across programs.

In a time when all eyes are on health policy news from Washington, D.C., it is important to learn from innovative state efforts to improve residents’ health and lives, and to ask how federal changes could help or hinder those efforts.

Learn more
To learn more about these state programs, please read “Pooling and Braiding Funds for Health-Related Social Needs: Lessons from Virginia’s Children’s Services Act,” and “Braiding Funds to House Complex Medicaid Beneficiaries: Key Policy Lessons from Louisiana.” The webinar slides and recording are available here.

Support for this blog post was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect those of the Foundation.