Balanced Area Deprivation Index (bADI): Enhancing social determinants of health indices to strengthen their association with healthcare clinical outcomes, utilization and costs

TL;DR

The paper introduces the balanced ADI (bADI), a new social determinants of health index that improves upon the traditional ADI by reducing reliance on housing metrics, resulting in better prediction of health outcomes and costs.

Contribution

The study develops and validates the bADI, a novel SDoH index that enhances predictive accuracy and regional applicability compared to the traditional ADI.

Findings

bADI correlates more strongly with clinical outcomes and life expectancy.

bADI is less biased by housing costs in expensive regions.

bADI reveals nuanced healthcare cost patterns across disadvantaged groups.

Abstract

Background: As value-based care expands across the U.S. healthcare system, reducing health disparities has become a priority. Social determinants of health (SDoH) indices, like the widely used Area Deprivation Index (ADI), guide efforts to manage patient health and costs. However, the ADI's reliance on housing-related variables (e.g., median home value) may reduce its effectiveness, especially in high-cost regions, by masking inequalities and poor health outcomes. Methods: To overcome these limitations, we developed the balanced ADI (bADI), a new SDoH index that reduces dependence on housing metrics through standardized construction. We evaluated the bADI using data from millions of Medicare Fee-for-Service and Medicare Advantage beneficiaries. Correlation analyses measured its association with clinical outcomes, life expectancy, healthcare use, and cost, and compared results to the ADI. Results: The bADI showed stronger correlations with clinical outcomes and life expectancy than the ADI. It was less influenced by housing costs in expensive regions and more accurately predicted healthcare use and costs. While ADI-based research suggested both the most and least disadvantaged groups had higher healthcare costs, the bADI revealed a more nuanced pattern, showing more accurate cost differences across groups. Conclusions: The bADI offers stronger predictive power for healthcare outcomes and spending, making it a valuable tool for accountable care organizations. By reallocating resources from less to more disadvantaged areas, ACOs could use the bADI to promote equity and cost-effective care within population health initiatives.