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Hospitals and Pay for Success

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By Green & Healthy Homes Initiative

Executive Summary

The purpose of this publication is to explain the ways in which nonprofit hospitals and hospital systems under a fee-for-service payment structure (hereafter referred to as “hospitals”) may participate in Pay for Success arrangements. We aim to shed light on how hospitals can use Pay for Success as a tool to achieve mission and economic goals, while addressing the public health needs of its community. This report is based on Green & Healthy Homes Initiative’s work to date developing asthma-focused Pay for Success projects across the country.

Healthcare delivery in the United States is constantly evolving. Healthcare organizations, experts, and policymakers are looking upstream at public health programs to address the physical and social determinants of health that contributed to costly medical utilization. Hospitals, as traditional medical providers, should consider how their economic and mission-related goals align with this shift in the healthcare paradigm. Pay for Success offers one option for hospitals to scale public-health related initiatives.

There are three roles that a hospital may play under Pay for Success projects: outcomes payer, service provider, and funder. To determine which roles are viable, a hospital can conduct an internal economic analysis to determine which subpopulations and public health programs to undertake as a means of achieving mission and economic goals. This analysis, coupled with an understanding of the hospital’s strategic goals, will provide guidance on how to move forward with Pay for Success.

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