Homage: Calculating the ROI of a Partnership to Meet the Health-Related Social Needs of Medicare Advantage Plan Members

Authors
Victor Tabbush
Douglas McCarthy
Case Example
March 2020

The Return-on-Investment (ROI) Calculator for Partnerships to Address the Social Determinants of Health, developed by The Commonwealth Fund, is designed to help support successful financial partnerships between community-based organizations (CBOs) and health plans. This case study illustrates how Homage, a social service CBO, used the ROI Calculator to determine the value proposition of their services when initiating a partnership with a Medicare Advantage (MA) plan. MA plans have new flexibility to cover health-related social services, and plans looking to address nonmedical needs are partnering with CBOs that deliver these services. Homage offers a care management program for high-need individuals, which conceptually would support a health plan’s goal of reducing hospital admissions and length of stays for by meeting patients’ health-related social needs.

Homage successfully used the ROI Calculator to begin developing the financial terms of a partnership and guide decision-making. This included entering data to estimate cost savings from reduced admissions, calculate the prevalence and intensity of provided services, and assess program costs. The calculator projected an ROI for the MA plan and enabled Homage’s finance team to model various case rates that could offer protection from financial risks.

Plans and CBOs sometimes experience challenges during contracting negotiations. CBOs can mitigate issues that arise by marshalling strong evidence, considering competitors, and understanding plans’ negotiating targets. Using a tool like the ROI Calculator can help CBOs and health plans in developing mutually beneficial financial arrangements within a partnership to address patients’ health-related social needs.

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Key Questions Answered
  • How can a community-based organization calculate the business case for health plan partnerships?
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