Pay For Success (PFS) : Validating Your Program's Cashable Benefits To Secure Private Sector Investor Funding by Michael McKnight

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
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
www.ghhi.org
Basic PFS Model
www.ghhi.org
Basic PFS Model
www.ghhi.org
Basic PFS Model
www.ghhi.org
Basic PFS Model
www.ghhi.org
Basic PFS Model

If outcomes not
achieved,
government/payor
makes no payments
to investors. Potential
project cessation.
Outcomes not
achieved
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
www.ghhi.org
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
www.ghhi.org
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
www.ghhi.org
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
www.ghhi.org
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
HHSs Community Preventive
Surgeon
Services Task Force found
Generals 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
Address Root Causes at

Home
Unhealt
hy Home
Treatme
nt/
Inhaler
Asthma
Episode
Hospital
Visit
www.ghhi.org
Common Home Asthma

Triggers
Dust Mites
VOCs
Cockroaches
Tobacco Smoke
Pests
Animal
Allergens
Mold
Smoke/Gas
www.ghhi.org
Healing a Fractured
Delivery System
www.ghhi.org
The GHHI No Wrong

Door Model
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 doctors 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
Environmental Justice, Vol. 7, Number 6, 2014
www.ghhi.org
88% increase in participants reporting
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
Service Providers
Home
remediation and
education
Asthma High
Utilizers
7
Intermedia
ry
Collective Goal:
IMPROVE HEALTH
AND SOCIAL
OUTCOMES
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
Make success
payments from cost
savings
Healthcare Payor
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
Home
remediation and
education
Repay principal and

return
6
Collective Goal:
IMPROVE HEALTH
AND SOCIAL
OUTCOMES
Asthma High
Utilizers
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

Funds 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
Spectrum
Health
Health Net,
Healthy
Homes
Coalition, &
Asthma
Network of W.
Michigan
Plan
Community
Foundation
for Greater
Buffalo
Le Bonheur
Childrens
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
Data
Request
Payment
Mechanism
Assess SP
Capacity
Financial
Model
Finalize
Intervention
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
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
www.ghhi.org
Questions?
Michael McKnight
Vice President of Policy and Innovation
mmcknight@ghhi.org
Follow us on Twitter @HealthyHousing

Like us on Facebook GHHINational
Learn more on YouTube GHHI Videos
www.ghhi.org
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What is Pay For

2015 Green & Healthy Homes Initiative. All rights

Basic PFS Model

Basic PFS Model

Basic PFS Model

Basic PFS Model

Basic PFS Model

Basic PFS Model

PFS Activity in the U.S.

80+ other PFS

The PFS Opportunity

14M missed school days due to asthma

62% participants with 0

Sources: Center for Disease Control and Prevention (http://www.cdc.gov/nchs/fastats/asthma.htm)

Evidence Base for

NAEPP Guidelines-based care calls

Address Root Causes at

Common Home Asthma

2015 Green & Healthy Homes Initiative. All rights

2015 Green & Healthy Homes Initiative. All rights

The GHHI No Wrong

2015 Green & Healthy Homes Initiative. All rights

Environmental Justice, Vol. 7, Number 6, 2014

2015 Green & Healthy Homes Initiative. All rights

Reduced Costs = Cashable

Asthma PFS Model

Repay principal and

Validate savings and

GHHI Baltimore PFS

Repay principal and

Validate savings and

GHHI selected to participate in Social Innovation

2015 Green & Healthy Homes Initiative. All rights

Asthma PFS Feasibility

Engage national & local

Policy End Goals

Follow us on Twitter @HealthyHousing

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