Pay for success and health

Health care spending in the United States has become exponentially large, reaching $3.3 trillion in 2016, or 17.9 percent of the gross domestic product (GDP). Yet, as compared to its peers, the US experiences poorer health outcomes, including lower life expectancy at birth and higher infant mortality rate. Efforts are underway to counteract both these trends, as practitioners, policymakers, researchers, and investors look toward innovative approaches of value-based health care delivery and financing.

Pay for success (PFS) is one such approach to financing health care interventions that is well-aligned with the dual goals of improving outcomes and increasing cost efficiency. To date, only a handful of health-related PFS projects have launched. The South Carolina Nurse-Family Partnership Project partners first-time moms with nurse home visitors who provide knowledge and support throughout pregnancy and until children reach the age of 2. Their services are funded in part by the state and federal Medicaid. Santa Clara County’s Partners in Wellness Program provides coordinated, community-based behavioral health and housing services to the County’s severely mentally ill residents, and is also partially funded by California’s Medicaid program. Lastly, the Connecticut Family Stability Project provides substance abuse treatment, along with in-home, attachment-based parent-child therapy to parents who struggle with a substance use disorder. Other current PFS projects track secondary health outcomes; for example, permanent supportive housing projects often track secondary health outcomes like a reduction in unnecessary emergency department visits.

There are a few other health-related projects in the planning phases, including one aimed at reducing the incidence of asthma caused by unhealthy housing and another aimed at improving food security and nutrition, increasing safety and preventing falls, and reducing social isolation for seniors.

What makes health projects appealing candidates for PFS projects?

  • Stakeholders’ widespread interest in developing evidence-based, cost-effective health care strategies
  • The multi-system involvement of the health care system’s most complex patients
  • The potential for generating savings to the health care system
  • The extensive amount of data already collected by the health care system

Current Health-Related Pay for Success Projects