Asthma and the Pay for Success Opportunity. November 17, 2016

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2 GHHI history GHHI overview Our mission Break the link between unhealthy housing and unhealthy families by creating and advocating for healthy, safe, and energy efficient homes. Founded as Parents Against Lead Expands to incorporate evidenced-based asthma reduction services

3 The GHHI Model GHHI aligns resources to provide a holistic healthy homes intervention Source(s): 3

4 Asthma guidelines GHHI supports a comprehensive guidelines-based approach to asthma. Four Components of Asthma Care Management: Assessment and monitoring of patients with asthma Education about asthma self-management Control of environmental exposures that affect asthma Medications to treat asthma Control of environmental exposures is under-covered by Medicaid MCOs. Why? 1. Lack of capital to scale 2. Risk aversion for uncertain investments 3. Many services not designated as medical costs NAEPP EPR-3 Guidelines for the Diagnosis and Management of Asthma

5 GHHI and PFS Environmental control is under-covered despite the evidence. GHHI asthma-related outcomes reported in Environmental Justice the Task Force recommends the use of home-based, multi-trigger, multicomponent interventions with an environmental focus for children and adolescents with asthma.. Cost-benefit studies show a return of $5.3 to $14.0 for each dollar invested. 66% reduction in asthma-related hospitalizations 28% reduction in asthma-related ED visits 50% increase in participants never having to visit the doctor for asthma 62% increase in participants reporting zero school absences due to asthma 88% increase in participants reporting zero work absences due to child s asthma gh_integrated_housing_intervention.pdf 5

6 PFS definition What is Pay for Success? Pay for Success (PFS) financing models are cross-sector partnerships in which private investors pay upfront for a social service and then government, healthcare, or other payers repay the investment if, and only if, agreed-upon outcomes are met. Outputs 6

7 PFS model How does Pay for Success work? Steps 2 Service Providers 1 Investors provide upfront capital for scaling evidence-based services Service Providers deliver services to defined target population Intermediary 3 Intervention results in a social impact, often cost savings, that the Payer values Investors 4 Payer 4 Payer repays Investors if, and only if, outcomes are verified by an independent Evaluator Evaluator 5 Intermediary provides coordination services throughout each step 7

8 PFS across the nation There are 12 active PFS transactions across a range of issues in the U.S., with dozens more in development. DC: water runoff CT: substance abuse & family stability SC: prenatal care Denver: homelessness Santa Clara Co.: homelessness Cuyahoga Co.: homelessness/child welfare MA: homelessness Chicago: early childhood education MA: criminal justice, employment NY: criminal justice, employment UT: early childhood education New York City: criminal justice Source(s): 8

9 The benefits of PFS PFS is a win-win-win for all partners. Back-end Payer Realize cost savings No financial risk - only pay for what works Learn what programs are effective Bridge timing gap between services and cost savings Beneficiaries Improved outcomes at greater scale Progress toward systemic change Service Providers Obtain new flexible funding Build program capacity Scale services Grow evidence base Strengthen partnerships $ Investors Catalyze and expand social impact Receive return on investment 9

GHHI s PFS work GHHI leads 11 asthma-focused PFS projects with healthcare and service provider partners across the country.

(Health Partners Plans) Rhode Island (State Medicaid) Funders of asthma PFS feasibility studies: Feasibility completed

(Baystate Health) Transaction structuring Baltimore* (Johns Hopkins Medicine) Salt Lake City (U.

10 GHHI s PFS work GHHI leads 11 asthma-focused PFS projects with healthcare and service provider partners across the country. Feasibility ongoing Chicago (Presence Health) Houston (UnitedHealthcare) New York City (Affinity Health Plan) Philadelphia (Health Partners Plans) Rhode Island (State Medicaid) Funders of asthma PFS feasibility studies: Feasibility completed Buffalo (YourCare Health Plan) Grand Rapids (Spectrum Health) Memphis (Le Bonheur Children s Hospital) Springfield (Baystate Health) Transaction structuring Baltimore* (Johns Hopkins Medicine) Salt Lake City (U. of Utah Health Plans) *GHHI is the service provider in the Baltimore PFS project. GHHI is a technical services provider on all other projects. 10

11 Comprehensive Asthma Intervention Model Identification of high-utilizer asthma patients In-home assessment of medical and environmental needs Asthma education + remediation of environmental triggers Evaluation of outcomes $ 11

12 GHHI s end goals GHHI and its PFS partners do not see PFS as a permanent solution, but have the ultimate goal of changing healthcare policy. End Goals Improved integration between healthcare and communities Increased emphasis on outcomes Prove the business case at scale, then achieve sustainable funding Healthy homes services designated as medical costs A healthcare system that sustainably addresses the social determinants of health, focusing on prevention rather than costly acute care 12

13 Medicaid issues Main concern If successful, Medicaid MCOs would see a reduction in capitation rates from state Medicaid agencies and not have funds available to repay investors What is needed Formal guidance memo from CMS and state Medicaid agencies on how PFS fits into current managed care regulations (value-based payments) Assurance that MCOs can equitably share in cost savings to repay investors How philanthropic funders can help Play a catalytic role Fund and get involved in feasibility and transaction structuring activities Provide letters of guarantee for MCOs to protect against potential losses due to capitation adjustments, so PFS projects do not stall Participate in GHHI s Pay For Success in Public Health coalition 13

14 Contact information Thank you! Trent Van Alfen Social Innovation Specialist Website: Facebook: GHHInational Instagram: healthy_housing 14

16 What we ve learned Asthma is expensive the average MCO spends between $7,500 and $20,000 per hospitalized patient per year across our sample. Subpopulation baseline average cost per annum $ thousands Data quality: $232million in medical expense 282 thousand member months 10 actuarial analyses 6 jurisdictions Insights: MCOs are spending between $7,500 and $20,000 per previously hospitalized person on average. The median annual cost of a previously hospitalized person is over $10,000 per year. Distributions are of the average cost for health plans not the individuals covered. The highest utilizing ED visitors exceed the average substantially. Note(s):Distributions are representative of the average cost for a health plan to cover a person having the utilization event listed in the given period in subsequent years, reversion to the mean was estimated at an 8% to 30%, any savings potential discussed is additional to that estimate.. Source: GHHI analysis of Milliman s findings from actuarial assessments. 16

17 Pay for Success cohort overview Post-feasibility cohort economic overview BUNY GRMI METN SLCo. SPMA Scenario names $ 3,102.1 K $1,164 K $ 8,377.3 K $ 4,708.4 K $ 5,753.0 K Program cost savings $ (1,740.0)K $(792.0)K $ (5,445.0)K $ (1,665.0)K $ 3,300.0 K Intervention costs $ 1,362.1 K $ K $ 2,932.3 K $ 3,043.4 K $ 2,453.0 K Program contribution $ (340.0)K ~$(330.0)K $ (650.0)K $ (650.0)K $ (650.0)K Transaction costs $ 1,022.1 K $ 42 K $ 2,282.3 K $ 2,393.4 K $ 1,803.0 K Net benefits 12.3 % 1.20% 9.4 % 26.6 % % Annual program Internal rate of return 145 (18%) 132 (23%) 330 (20%) 150 (36%) 200 (20%) Total persons per year (% target) 45 (67%) 78 (60%) 130 (68%) 28 (70%) 62 (61%) Inpatient (% target population served) 100 (65%) 54 (12%) 200 (65%) 122 (41%) 115 (18%) Emergency (% target population served) $(4,000) $(6,000) $(5,500) $(3,700.0) $(5,500) Average cost per home Key insights All projects have a viable path forward, Core services that are economically beneficial, and The key decision is how broadly services will be offered. Note(s): BUNY = Buffalo, NY; GRMI = Grand Rapids, MI; METN = Memphis, TN; Salt Lake County, UT; Springfield, MA. 17

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