What is Pay For

Success?
Pay for Success (PFS) models are crosssector partnerships in which private
investors pay upfront for a social
service and then government or
healthcare payors repay the
investment if and only if agreedupon outcomes are met.
If outcomes are not met, investors lose
money

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Basic PFS Model

Graphic: “Pay for Success (PFS) Financing,” Social Finance. Found in “Pay for Success: A Primer for Social Innovators
,” Social Innovation Fund
©2015 Green & Healthy Homes Initiative. All rights

www.ghhi.org

Basic PFS Model

Graphic: “Pay for Success (PFS) Financing,” Social Finance. Found in “Pay for Success: A Primer for Social Innovators
,” Social Innovation Fund
©2015 Green & Healthy Homes Initiative. All rights

www.ghhi.org

Basic PFS Model

Graphic: “Pay for Success (PFS) Financing,” Social Finance. Found in “Pay for Success: A Primer for Social Innovators
,” Social Innovation Fund
©2015 Green & Healthy Homes Initiative. All rights

www.ghhi.org

Basic PFS Model

Graphic: “Pay for Success (PFS) Financing,” Social Finance. Found in “Pay for Success: A Primer for Social Innovators
,” Social Innovation Fund
©2015 Green & Healthy Homes Initiative. All rights

www.ghhi.org

Basic PFS Model

Graphic: “Pay for Success (PFS) Financing,” Social Finance. Found in “Pay for Success: A Primer for Social Innovators
,” Social Innovation Fund
©2015 Green & Healthy Homes Initiative. All rights

www.ghhi.org

Basic PFS Model
If outcomes not
achieved,
government/payor
makes no payments
to investors. Potential
project cessation.

Outcomes not
achieved

Graphic: “Pay for Success (PFS) Financing,” Social Finance. Found in “Pay for Success: A Primer for Social Innovators
,” Social Innovation Fund
©2015 Green & Healthy Homes Initiative. All rights

www.ghhi.org

PFS Activity in the U.S.
11 PFS projects
launched focus
on:
-

-

Criminal
justice/recidivis
m
Early Childhood
Education
Maternal/Child
Health
Homelessness

80+ other PFS
projects in
feasibility phase
PFS legislation
introduced at
federal level &
Updated November
passed in multiple
2015
states
©2015 Green
& Healthy Homes Initiative. All rights

10
Active
1
Inactive

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Benefits of PFS
Progress towards systemic change
Bridges timing gap between service
provision and cost savings
Pay for what works
Stable, flexible funding to service
providers
Shifts focus from remediation to
prevention
Rigorous program evaluation
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PFS Challenges
Lengthy feasibility and transaction
structuring
Cost savings can be difficult to
ascertain
Limited supply of appropriate
interventions
High transaction costs
Bureaucracies and silos
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Optimal PFS
Interventions
Evidence-based
Providers structured for evaluation
Generate cashable savings
Cost-effective (compared to savings)
Not currently well-funded or not
funded by proper source
Scalable and/or replicable
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The PFS Opportunity
for Asthma

SOCIAL
IMPACT
6.8M kids with asthma in U.S. (18.7M
adults)

14M missed school days due to asthma
9M families living in unhealthy homes
CASHABLE
$5k - $15k per
SAVINGS
hospitalization
$56B spent on asthma
$500 - $5K per ED visit
annually
Other Rx & urgent care
PROVEN
costs
INTERVENTION
40% of asthma episodes caused by home-based triggers
GHHI Healthy Homes Demonstration Project:
66% asthma hospitalizations
absences
28% asthma ED visits
0 missed work days

62% participants with 0
88% participants with

Sources: Center for Disease Control and Prevention (http://www.cdc.gov/nchs/fastats/asthma.htm)
“GHHI:
Improving
Health,
Economic,
and Social
©2015
Green
& Healthy
Homes
Initiative.
AllOutcomes
rights Through Integrated Housing Intervention,” Environmental
Justice, Vol. 7, Number 6, 2014

www.ghhi.org

Evidence Base for
Healthy
Homes

NAEPP Guidelines-based care calls
for
1) Assessment of disease
severity;
2) Medication;
3) Patient education; and
4) Environmental control
• HHS’s Community Preventive
Surgeon
Services Task Force found
General’s Call
“strong evidence of
to Action to
effectiveness of in-home
Promote
Healthy Homes
environmental
interventions”
• Cost benefit studies show a return of(2009)
$5 to
in improving asthma management
$14 per $1.
and overall quality of life for
www.ghhi.org
©2015 Green & Healthy Homes Initiative. All rights

Address Root Causes at
Home
Unhealt
hy Home

Treatme
nt/
Inhaler

Asthma
Episode

Hospital
Visit
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Common Home Asthma
Triggers
Dust Mites

VOCs

Cockroaches

Tobacco Smoke

Pests

Animal
Allergens

Mold

Smoke/Gas

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Healing a Fractured
Delivery System

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The GHHI “No Wrong
Door” Model

©2015 Green & Healthy Homes Initiative. All rights

 Lead Hazard
Reduction
 Asthma Trigger
Control
 Fall/Injury
Prevention
 Energy Efficiency
www.ghhi.org
 Weatherization

Impact: Building a
Business
Case
Green & Healthy Homes Initiative: Improving
Health, Economic and Social Outcomes Through
Integrated
Housing
• 66% reduction
inIntervention
asthma-related client

hospitalizations
• 28% reduction in asthma ED visits
• 50% increase in participants never having
to visit the doctor’s office due to asthma
episodes
• 62% increase in participants reporting
asthma-related perfect attendance for their
child (0 school absences due to asthma
episodes)
Peer-reviewed and published in Environmental
Justice journal

1

Environmental Justice, Vol. 7, Number 6, 2014

www.ghhi.org
• 88% increase in participants reporting

©2015 Green & Healthy Homes Initiative. All rights

Reduced Costs = Cashable
Savings
• 1 asthma-related hospitalization
on average costs $7506 in
Baltimore
• 1 asthma-related emergency
room visit on average costs $820
Asthma
in Baltimore
Cashab
hospitalizat
ions and ED
visits

[2009-10
©2015 Greendata]
& Healthy Homes Initiative. All rights

le
Saving
s
www.ghhi.org

Asthma PFS Model
Investors
Investment pays
for cost of
intervention
Draw down funds
to pay for
intervention

2

Service Providers
Home
remediation and
education

3

Asthma High
Utilizers

1

7
Intermedia
ry

Collective Goal:
IMPROVE HEALTH
AND SOCIAL
OUTCOMES

4

Evaluate
outcomes

Flow of funds
& Evaluation
Graphic
from:
“Pay for Success
Financing,”
Social Finance, in “
©2015altered
Green
& Healthy
Homes(PFS)
Initiative.
All by
rights
Pay for Success: A Primer for Social Innovators,” Social Innovation Fund

Repay principal and
return

6

Make success
payments from cost
savings

Healthcare Payor

5

Validate savings and
trigger success
payments

Independent
Evaluator

Services

www.ghhi.org

GHHI Baltimore PFS
Model
Philanthrop
ic
Guarantee

& other
investors
Investment pays
for cost of
intervention
Draw down
funds to pay for
intervention

2

Home
remediation and
education

3

1

7

Repay principal and
return

6
Collective Goal:
IMPROVE HEALTH
AND SOCIAL
OUTCOMES

5

Asthma High
Utilizers

4

Make success
payments from
cost savings

Validate savings and
trigger success
payments

Evaluate
outcomes

Flow of funds
Services & Evaluation
Graphic altered from: “Pay for Success (PFS) Financing,” by Social Finance, in “
Pay
for Success:
Primer
for Social
Innovators,”
Social
©2015
GreenA &
Healthy
Homes
Initiative.
AllInnovation
rights Fund

www.ghhi.org

GHHI selected to participate in Social Innovation
Fund’s first PFS cohort developing asthma PFS
feasibility studies in 5 locations. Monroe

University of
Utah Health
Plans
Salt Lake
County

Blue: Healthcare
organizations
Green: Service Providers

©2015 Green & Healthy Homes Initiative. All rights

Spectrum
Health
Health Net,
Healthy
Homes
Coalition, &
Asthma
Network of W.
Michigan

Plan
Community
Foundation
for Greater
Buffalo

Le Bonheur
Children’s
Hospital
Habitat for
Humanity of
Greater
Memphis &
Memphis CHiLD

Baystate
Health
Partners for
a Healthier
Community,
Springfield
Partners for
Community
Action,
Revitalize
CDC, & HAP
Housing

www.ghhi.org

Asthma PFS Feasibility
Studies TimelineSep

TA
Services
1

Project Plan

2

Data
Request

3

Payment
Mechanism

4

Assess SP
Capacity

5

Financial
Model

6

Finalize
Intervention

7

Evaluation
Model

Jun
201
5

Jul
201
5

Aug
201
5

t
201
5

Roles &
responsibili
ties
Define target population.
Pull cost data.

Nov
201
5

Dec
201
5

Link savings
projections to
success payments.
PFS budget.
Process flow and
scaling
expectations.
Evaluation

Stakeholder
Engagement

10 Transaction
Prep
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Feb
201
6

Mar
201
6

Apr
201
6

May
201
6

Jun
201
6

• Share learnings
and make
connections

Assess current
capacity and
identify needs.

Survey
Investors

Jan
201
6

Cohort model:

Determine source of
success payments.

8
9

Oct
201
5

• Cross-site
webinars
• All-site
convening in
November

method
Inventory
national &
local
investors

Engage national & local
stakeholders across public,
private, and social sectors
Finalize feasibility
reports and prepare
for transaction phase

Final
feasibility
reports &
transaction
decision

www.ghhi.org

Policy End Goals
CMS & other health payers covering healthy
homes services
Physicians writing prescriptions for healthy homes
services
Housing professionals being a new front line for
healthcare
Hospitals utilizing community benefits to keep
people healthier, rather than paying for
undercompensated care
Increased data around the broad impact of
healthy homes
©2015 Green & Healthy Homes Initiative. All rights

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Questions?
Michael McKnight
Vice President of Policy and Innovation
mmcknight@ghhi.org

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