title: Using pay-for-success to increase investment in the nonmedical determinants of health.
abstract: 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, or 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. Pay-for-success pilots are being developed to reduce asthma-related emergencies among children, poor birth outcomes, and the progression of prediabetes to diabetes, among other applications. 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.
authors.affiliation: Ian Galloway (ian.galloway@sf.frb.org) is a senior research associate in the Community Development Department of the Federal Reserve Bank of San Francisco, in California.
authors.forename: Ian
authors.initials: I
authors.lastname: Galloway
mesh_terms: D005381:Financing, Organized / Q000191:economics*; D017048:Health Care Costs / Q000639:trends*; D006293:Health Promotion / Q000191:economics*; D006801:Humans; D011634:Public Health / Q000191:economics*; D055818:Public-Private Sector Partnerships / Q000191:economics*; D012922:Social Change; D064890:Social Determinants of Health / Q000191:economics*; D014481:United States
keywords: Cost of Health Care; Determinants Of Health; Financing Health Care; Health Economics; Health Promotion/Disease Prevention