Using Pay for Success In Healthcare

Document Title: Authors: The Corporation for National and Community Service (CNCS) is a federal agency that improves lives, strengthens communities, and fosters civic engagement through service and volunteering. Each year, CNCS engages five million Americans of all ages and backgrounds through AmeriCorps, Senior Corps, the Social Innovation Fund, the Volunteer Generation Fund, and other programs, and leads the President's national call to service initiative, United We Serve. For more information, visit NationalService.gov. The Social Innovation Fund (SIF), a program of CNCS, combines public and private resources to grow the impact of innovative, community-based solutions that have compelling evidence of improving the lives of people in low-income communities throughout the United States. The SIF invests in three priority areas: economic opportunity, healthy futures, and youth development. Using Pay for Success in Health Care The following researchers at Abt Associates prepared this report for the Corporation for National and Community Service’s Process Evaluation of the Social Innovation Fund Pay for Success Program: Cristina Booker Marjorie Levin Rian Watt Kimberly Burnett Allan Porowski Katharine Witgert PublicationDate: October2016 Submittedto: LilyZandniapour,Ph.D.,OfficeofResearchandEvaluation,CorporationforNational and Community Service. For inquiries, please contact evaluation@cns.gov. Contract Information: This document was produced pursuant to a contract between the Corporation for National and Community Service and Abt Associates (Contract # CNSHQ14A0004). Name and Address of Contractor: Abt Associates, 55 Wheeler Street, Cambridge, MA 02138 Disclaimer: ThisreportwascommissionedasanindependentstudybytheCorporationforNational and Community Service. Views expressed in the document do not necessarily reflect the official viewpoints of the agency or its staff. This document is in the public domain. Authorization to reproduce it in whole or in part is granted. This document has been formatted to be readable by assistive technologies, in accordance with Section 508 regulations. Recommended Citation: Corporation for National and Community Service, Office of Research and Evaluation (2016). Using Pay for Success in Health Care. Washington, DC: Author. Prepared for the Corporation for National and Community Service, Office of Research and Evaluation. nationalservice.gov/SIF i Using Pay for Success in Health Care Corporation for National and Community Service CNCS Process Evaluation of the SIF Pay for Success Program Office of Research and Evaluation Acknowledgements: Abt Associates would like to thank the following individuals and organizations for their review and contributions to this brief: Lily Zandniapour, Evaluation Program Manager and Contracting Officer’s Representative, Corporation for National and Community Service; Mary Hyde, Director of Research and Evaluation, Corporation for National and Community Service; Lois Nembhard, Acting Director of the Social Innovation Fund, Corporation for National and Community Service; John Tambornino, Office of the Assistant Secretary for Planning and Evaluation (ASPE), U.S. Department of Health and Human Services (HHS); Kenneth Finegold, ASPE, HHS; Andy Schneider, Centers for Medicare and Medicaid Services, Center for Medicaid and CHIP Services; Katherine Klem, Office of Social Innovation and Civic Participation, Office of White House Policy, Executive Office of the President; and the Green and Healthy Homes Initiative; Meals on Wheels America; and Nurse-Family Partnership. nationalservice.gov/SIF ii Using Pay for Success in Health Care Corporation for National and Community Service CNCS Process Evaluation of the SIF Pay for Success Program Office of Research and Evaluation Contents 1. Introduction.................................................................................................................................................................. 1 2. The Promise of Pay for Success in Health Care ................................................................................................... 2 3. Medicaid and Pay for Success ................................................................................................................................. 4 4. Early Insights on PFS in Health Care...................................................................................................................... 6 Appendix A. Pay for Success Project Profiles................................................................................................9 Appendix B. Health Policy Glossary.............................................................................................................13 Appendix C. Pay for Success Glossary........................................................................................................15 Appendix D. Resources and References ..................................................................................................... 16 nationalservice.gov/SIF iii Using Pay for Success in Health Care Corporation for National and Community Service CNCS Process Evaluation of the SIF Pay for Success Program Office of Research and Evaluation 1. Introduction In many ways, health-related interventions and Pay for Success (PFS) are natural bedfellows. Since the 2010 passage of the Patient Protection and Affordable Care Act (Affordable Care Act), the federal government has increasingly emphasized cost-effectiveness, pay for performance measures, and policy innovation across all of its health programs and in policy. At the same time, PFS is emerging as an innovative approach to address social problems, and it addresses these elements of the Affordable Care Act (Exhibit 1). PFS ties funding for an intervention to achievement of its outcomes and impacts in the community, enabling government or other payors (for example, health insurance providers or hospitals) to pay only for what works. Interest in PFS models for health-related interventions has been increasing, and this brief is designed to address opportunities to initiate PFS projects in this arena. Other policy developments have fueled interest in PFS financing models as well, including long-standing efforts to reduce health care costs per capita and an increasing focus on prevention. Only one of the PFS projects that have launched in the United States (as of July 2016) has a health-related objective, but many more are in development. Exhibit 1. Parallels between the Affordable Care Act and PFS Role of CNCS The Corporation for National and Community Service’s (CNCS) Social Innovation Fund (SIF) PFS Grant Program is in the process of markedly changing the landscape of PFS in health care and disease prevention. This initiative has funded 11 grantees: eight in 2014, its inaugural year, and another three in 2016, to either provide feasibility assessment and capacity building assistance or to structure transactions for PFS projects. Healthy futures, which includes promoting healthy lifestyles and reducing the risk factors that can lead to illness, is one of the three key areas of focus designated by CNCS for the SIF PFS program, and two of the program’s 2014 grantees are focusing exclusively on supporting PFS projects related to healthy futures. Through their selected subrecipients, these 11 grantees are supporting the development of approximately 70 projects, and about 20 of these projects have a primary focus on healthy futures. Objective of the brief The brief is intended to assist stakeholders and government agencies considering using PFS in health-related interventions. It identifies the motivations for using PFS financing models to support health-related interventions, the challenges involved, and early insights about using PFS models with health-related interventions. To illustrate these points, we provide examples from in-depth discussions with service providers and intermediaries working on three different PFS projects being implemented or in late stages of development. These projects were selected based on the health issues they address, their different stages of development, and the role of Medicaid in each project. The observations from this brief were also drawn from a review of the PFS projects that have been launched to date in the United States and the health-related projects now in development under the SIF PFS program. Affordable Care Act Pay for Success Improving outcomes Improving outcomes Innovative policy Innovative approach Pay for performance Pay for outcomes Cost-effectiveness Cost effectiveness or cost savings nationalservice.gov/SIF 1 Using Pay for Success in Health Care Corporation for National and Community Service CNCS Process Evaluation of the SIF Pay for Success Program Office of Research and Evaluation Outline of the brief The next section of this brief introduces three specific health-related PFS projects and draws conclusions about how PFS can be used with health care initiatives. Because Medicaid is one of the largest payors of health care in the U.S. (about 16 percent of total health spending), and the Medicaid-eligible population is often similar to the populations targeted by PFS projects, there are potential synergies between Medicaid and PFS. These are described in Section 3. Section 4 describes the early insights and emerging themes from the body of health-related PFS projects reviewed in this brief. Profiles of the three health-related PFS projects are provided in Appendix A. Definitions of key terms related to relevant health policy are in Appendix B; a glossary of terms related to Pay for Success is in Appendix C; and resources and references are provided in Appendix D.