Rayanne Hawkins
Urban Institute
Business Operations Manager

Q&A: Using PFS to finance community care teams in Connecticut

February 27, 2018 - 12:18pm

The Connecticut Health and Educational Facilities Authority (CHEFA) is a quasi-public agency—and a PFS-AD training and technical assistance awardee—that issues tax-exempt bonds to finance projects throughout the state for eligible not-for-profits, primarily education and health care institutions. Since its inception, CHEFA has issued more than $19 billion of tax-exempt bonds, working closely with investment bankers to manage and structure these transactions. In addition, they also support non-profits in the state through a grant program, which has distributed approximately $28 million in funding since its inception in 2003.

We spoke with our partners at CHEFA about their interest in pay for success (PFS) as a mechanism to finance the expansion of community care teams (CCTs) in Connecticut. 

PFSI: Why is CHEFA interested in using PFS?

CHEFA: PFS is at the intersection of CHEFA’s work in public finance and philanthropy. We believe CHEFA is uniquely qualified to facilitate a PFS project, bringing our financing experience, philanthropic experience, and key relationships to the table. The CCT project is a natural fit for us because it’s in one of our key sectors—healthcare—and involves some of our existing clients. The goal of our Pay of Success Community Care Teams project is to reduce inappropriate ED use by the adult patient population with chronic mental health and addiction issues. We expect that statewide implementation will result in a significant reduction in Medicaid costs.

PFSI: What are community care teams (CCTs), and what are the problems that CCTs attempt to address?

CHEFA: A CCT is a network of healthcare and community service providers who collaborate on patient-centered case management plans for frequent emergency department (ED) users. The network brings together mental health care providers, substance abuse clinicians, health centers, housing agencies, and food agencies. Increased connections to housing and wraparound social services have been shown to decrease ED use.

Once a patient is identified through hospital records or referrals, CCTs develop a care management plan to address the underlying reasons for the ED visit. The hospital reviews the plan with the patient and asks him or her to sign a Release of Information (ROI) to authorize the exchange of information with participating agencies. The patient is then admitted and begins working with the Navigator or Healthcare Promotion Advocate, who  establishes a relationship with the patient by making direct and indirect referrals to services, including housing and social wraparound support services, and by completing “check-in calls” for ongoing monitoring of client stability and progress. The Navigator provides care coordination and engages in case management through a personal connection with the patient and the CCT, ED, and other community service providers.

PFSI: How can CCTs benefit local communities and the state of Connecticut more broadly?

CHEFA: As of 2017, approximately 12 hospitals  throughout Connecticut have implemented some form of the CCT model. Of the remainder, four have established collective impact groups working on different issues, which can facilitate quicker establishment of CCTs. According to the Connecticut Hospital Association, in 2013, roughly 8,400 frequent ED users, who typically have coexisting mental health and substance abuse disorders, made a total of 57,925 trips to the ED at an average cost to Medicaid of $915.66 per visit. Two pilot CCT projects in Connecticut demonstrated a 40 percent decrease in ED visits. This suggests that the State of Connecticut could achieve significant Medicaid cost savings by incentivizing the establishment of CCTs in all 20 hospitals in the state.

PFSI:What do you think are data-related barriers to CCT expansion?

CHEFA: The success of CCTs depends upon three key factors: reduction in the number of unnecessary ED visits; referral of patients to more appropriate services; and cost savings to the state and individual hospitals. Valid evaluation of program costs and outcomes is complicated by several factors.

Linking data across agencies and hospital systems. Three types of data-linking can help CCTs better understand their target population and the impact and scope of services: (1) across hospitals, (2) between hospitals and state agencies, and (3) across state agencies.

First, the program pilot has demonstrated that many frequent users visit multiple EDs. Without a mechanism for sharing data, a CCT would not know if the user had already signed an ROI with a CCT at a different hospital. Developing a way to effectively share this information could help control costs and improve care.

Second, CCTs direct patients from hospitals to a range of services funded principally through three state agencies: the Department of Social Services, the Department of Mental Health and Addiction Services, and the Department of Children and Families. PFS project success will be based on adequate referral to these services.

Third, in addition to the data linkage between hospitals and state agencies, data between agencies must also be linked. State data systems are siloed, with little capacity to share across platforms. Effective quantification of outcomes depends on each sharing data to integrate their information about program utilization in order to ascertain the full range of services provided to patients.

Accessing historical patient data to evaluate the efficacy of patient interventions. An understanding of a patient’s past visits supports quantification of cost savings. Predictive models need to be developed to identify individuals who are likely to be high utilizers of care, as well as those who are likely to fail to utilize referrals from the CCT to appropriate service providers.

Evaluating outcomes while navigating HIPAA and patient privacy concerns. In order to accurately determine and quantify the outcomes of CCTs, patient medical records must be reviewed, including number of emergency room visits and services provided at each visit. At the same time, data must be deidentified to comply with HIPAA and other state privacy statutes. Since the size of the patient population is relatively small, it can be challenging to maximize access to useful data while providing adequate privacy protections.

Determining accurate measures of savings at hospitals and at the State level. The calculation of savings is complex, since there are many variables.  Actual hospital costs, as accounted for within accounting systems, may be difficult to identify.   A deep understanding of payor methodologies and reimbursements, particularly for Medicaid, will be necessary to determine cost savings.

PFSI: What does CHEFA hope to gain from its TA partnership with Urban?

CHEFA: CHEFA sees the CCT Pay for Success project as a great opportunity to foster collaboration among all of the various stakeholders, particularly health care providers, government agencies, and insurers.  Expanding the CCT model throughout the state should improve care for patients who are frequent ED visitors, and reduce costs.  Launching a PFS project requires substantial and rigorous data gathering and analysis to validate assumptions and secure investor interest. CHEFA is very pleased to have technical assistance from the staff at the Urban Institute to facilitate this intensive data analytics effort. To that end, on March 16, we are co-hosting a roundtable discussion with Urban that will bring together some of the key participants in this space and help us to move towards a Pay for Success feasibility study on CCTs. 

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As an organization, the Urban Institute does not take positions on issues. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research. Photo via Shutterstock.