For Profit, but Socially Determined: The Rise of the SDOH Industry

Social determinants of health (SDOH) are the greatest predictors of one's health status. There are clear SDOH disparities present in the United States, many of which have been especially evident during the COVID pandemic. SDOH have become a greater focus of payers, including Centers for Medicare & Medicaid Services (CMS). CMS has updated the reimbursement structure of Medicare and Medicaid to incentivize more SDOH-related interventions. Providers are also growing increasingly attentive to the SDOH needs of their patients, but often are unable to sufficiently address them outside of care settings. The combination of increased SDOH funding with inefficient mechanisms to meet patients' SDOH needs has led to the emergence of the for-profit SDOH industry. The purpose of this paper was to investigate the industry and identify its size, scope, and future implications. The authors conducted an analysis of for-profit SDOH companies using a third-party industry research platform. A collection of 58 companies was identified with $2.4 billion in funding and a total valuation of over $18.5 billion as of July, 2021. Two literature searches were conducted to support strategy recommendations for critically evaluating SDOH outcomes from these companies, and to determine the downstream effects they will have on community-based organizations also working to improve SDOH.