Exploring the Relationship Between Local Governmental Spending on the Social Determinants of Health and Health Care Costs of Privately Insured Adults

Greater investment in the social determinants of health (SDOH) is positively associated with improved health outcomes of both individuals and their communities, which in turn may help to bend the health care cost curve and reduce health care spending. The purpose of this study was to examine the relationship between local governments' spending on the SDOH and the health care costs of privately insured nonelderly adults. Annual spending by local governments on the SDOH for the years 2007-2017 was obtained from the Census of Governments. Annual health care costs for privately insured nonelderly adults for the years 2013-2017 was obtained from the Health Care Cost Institute. Bivariate and multivariate regression analyses were performed to examine the association between county-level local governments' per capita spending on the SDOH and the per member health care costs of privately insured adults living in these counties controlling for community characteristics. All analyses were conducted in 2021. For near-elderly adults ages 55-64, health care costs were significantly higher in counties with the lowest levels of local governmental spending on the SDOH. For adults ages 18-54, in contrast, health care costs were unrelated to local governmental spending. Investments of local governments in the SDOH may have rather limited potential to yield meaningful savings in health care costs for privately insured nonelderly adults at the population level, especially once such investments exceed a minimum threshold.