Embracing the Shift: The Impact of Health Care Contracting on Community-Based Organizations

Abstract

Growing evidence for the impact of social drivers of health (SDOH) on health outcomes has underscored the value of social care, defined here as community-based programs and services that address health-related social needs such as transportation, food security, and social connection. One model for aligning health and social care is contracting between health care entities (including hospital systems and managed care plans) and community-based organizations (CBOs), such as Area Agencies on Aging (AAAs) and Centers for Independent Living (CILs). The prevalence of these arrangements is increasing, but there is little documentation about the ways in which contracting with health care impacts the organizational operations and culture of a CBO. This qualitative study was designed to add depth to our understanding of these impacts. A focus group and interviews with 13 individuals representing 10 organizations (all of which were AAAs) yielded the following major findings:

1. Mission alignment was frequently discussed as an important component in the decision to contract, and in communication about the value of the new endeavor with staff, board members, and other stakeholders.

2. There was variability in the extent to which contract-related business practices were kept separate or integrated into existing staffing, funding, and work flow processes. The extremes of that variability were organizations that established a separate business entity (such as a 501c3 or an LLC), to those that blended the new contract-related work into existing staffing and work flow operations. Between those extremes, several organizations described the need to hire new staff to address increased volume and sometimes different skills that were required for the new work.

3. Data infrastructure and processes were often affected by contracting, particularly when data privacy standards meant that the CBO staff did not have access to the data they were entering; in these cases, information about program and staff performance was available only through reports provided by the healthcare partner.

4. The impact of healthcare contracting on the organizational culture of the CBO was partly shaped by the existing culture. Some participants highlighted their long-standing organizational culture of innovation, growth, and change. Others outlined strategies for communicating the mission alignment and sustainability benefits of the new ventures.

5. Valuable lessons learned and advice for other CBOs emerged from this study, including encouragement to embrace this opportunity to strengthen the alignment of social care and health care, and the importance of making a strong business case that appropriately values the essential role of the work they do and rewards them for the quality of the services they provide.