Using Pay-For-Success to Increase Investment in the Nonmedical Determinants of Health

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The combination of fee-for-service payments and the US health care system’s standing commitment to treating existing illness discourages spending on the behavioral, social, and environmental (that is, the nonmedical) conditions that contribute most to long-term health. Pay-for-success, alternatively known as social impact bonds (SIBs), offers a possible solution. The pay-for-success model relies on an investor that is willing to fund a nonmedical intervention up front while bearing the risk that the intervention may fail to prevent disease in the future. Should the intervention succeed, however, the investor is repaid in full by a predetermined payer, such as a public health agency, and receives an additional return on its investment as a reward for taking on the risk. These efforts, supported by key policy reforms such as public agency data sharing and coordinated care, promise to increase the number of evidence-based nonmedical service providers and seed a new market that values health, not just health care.

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Date: Nov 2014
Author: Health Affairs