How loneliness impacts Medicare spending

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An older man sits alone drinking coffee as he stares out a window. Curbing low-value, unnecessary Medicare spending is a goal of every plan. However, because so many factors influence spending, achieving cost reduction can be challenging. When plans look at the causes of rising costs and develop strategies to target them, the results can support their goals. One area currently showing a positive impact on lowering high-cost services is addressing loneliness.

Increasing amounts of data point to loneliness as more than just a feeling — with mental, physical and financial consequences. So how does loneliness impact Medicare spending, and what solutions can you implement to reduce expenses and improve member health and experiences?

What does research reveal about loneliness and increased Medicare spending?

A fundamental aspect of understanding the loneliness factor in health care spending is establishing that those suffering from it use services differently. This is not merely a hypothesis. A study of older adults labeled as “objectively isolated” revealed higher Medicare expenditures were associated with increased usage of hospitalization and institutionalization. Further, researchers confirmed that programs supporting connectedness could lead to savings. 

Another study from the American Association of Retired Persons (AARP) and Stanford University reached similar conclusions. They concluded that 14% of Medicare enrollees — around four million people — have inadequate social connections. That lack of connectivity translates to approximately $6.7 billion in Medicare spending each year. Most of these expenditures were associated with care given in a hospital setting or skilled nursing facility. 

Unnecessary emergency department visits and readmissions each represent high costs for plans. The emergency department is a costly setting for care, and visits are usually avoidable and unnecessary. One key example of overutilization is the report that 80 patients visited a Dallas emergency room a collective 5,139 times in one year, most often due to loneliness. 

Chronic loneliness is rarely just about isolation.

Social isolation is not the only cause of chronic loneliness. The AARP study goes beyond the typical connotation of social isolation, finding that married participants were just as likely to be lonely as single ones. 

Medicare members may have people in their homes or family nearby, but that doesn’t mean they have strong relationships. What’s critical to distinguish is that loneliness isn’t solvable by companionship or social activity alone — but instead requires a balance. Solving loneliness also means changing how members engage with their plan and clinicians and participate in their health. It’s about helping them overcome social determinants of health (SDOH) and health disparities

Helping these members and reducing costs requires many approaches that address different things. First, you have to identify SDOH components and the degree of loneliness. Crafting a plan starts with data. 

Need a better way to reach Medicare members? Discover how the right member  engagement program can improve health outcomes.

Address loneliness to mitigate out-of-control costs. 

Managing loneliness in the Medicare population has become a priority. The Centers for Medicare and Medicaid Services (CMS) are keenly aware of the impact of loneliness on health care spending. They have taken steps to confront the problem, most noticeably by expanding coverage for SDOH, as there is often a connection between SDOH and loneliness. 

The AARP study highlighted that those most at risk had less income than those with more social connections. Lack of financial means can correlate to no access to transportation, food scarcity, concerns about living conditions and other issues. These issues feed the loneliness fire and make member engagement difficult. Why would a member be in tune with their care needs and proper usage of their plan if they are worried about their most basic needs, such as food and shelter?

That’s why any strategy to treat loneliness must also incorporate SDOH. So where can plans start?

What are the building blocks of improving loneliness and connecting members?

As noted, you need data to construct a strategy. Lonely people are tuned out but not unreachable. However, general programs won’t work for them. Also, providing in-home help or sending them communications about resources won’t necessarily move the needle. 

To reach your members, you need to marry technology and human connection in an innovative way. Technology may seem counterintuitive, but the key is making it friendly and easy to use. It could be as simple as phone support from people trained to build certain skill sets and connect members with health plan resources or utilizing an empathetic technology platform. 

With technology, you can screen members, determine who is lonely and help them share their feelings and needs. During the process, you can gather relevant data about your members, including behavioral diagnoses, crises, hospitalizations or other conditions for analysis. Members may be more forthcoming within a technology platform because there’s no risk of judgment with technology. 

Accessible technology combined with human compassion and connection is a solid strategy for tackling Medicare costs. The Pyx Health program does this with positive results, including a 61% reduction in emergency department and inpatient costs. 

Learn more about addressing loneliness with evidence-based interventions by downloading our guide, Member Engagement Conundrum: 5 Issues in Medicare and Medicaid Plans and How to Solve Them.

Cover of Key Considerations for Choosing a Medicare Member Engagement Program