Lantz, Iovan, et al published in The Milbank Quarterly on using “Pay for Success” to finance childhood asthma interventions

June 22, 2018

“Pay for Success” (PFS) financing could help scale implementation of evidence-based childhood asthma interventions in the Medicaid population if legal and regulatory barriers can be overcome, write Paula Lantz, Samantha Iovan, and co-authors in the June 4 edition of The Milbank Quarterly, an academic journal for population health and health policy.

The article, titled “‘Pay for Success’ Financing and Home-Based Multicomponent Childhood Asthma Interventions: Modeling Results From the Detroit Medicaid Population,” examines the efficacy and cost savings associated with using PFS to deliver evidence-based services in this high-need population. In PFS, interventions are initially “implemented with financing from private investors who will receive a future payout from the government only if the metrics identified in a performance-based contract are met.”

The study included a benefit-cost analysis and seven-year simulation of the intensive intervention in the Detroit Medicaid population across three groups of children with varying asthma severity. Authors found that using PFS to deliver an expensive home-based asthma intervention is most cost effective if targeted to the most severe asthma patients. However, a key hurdle to broader implementation of the PFS model comes in capturing the federal Medicaid savings and applying them to payouts for private investors who funded the preventive care intervention.

Paula Lantz is the Associate Dean for Academic Affairs at the Gerald R. Ford School of Public Policy, where she is also a Professor of Public Policy. She is an expert on health policy, and much of her recent research focuses on the use of social impact bonds to reduce Medicaid expenditures. This research was conducted as part of the Robert Wood Johnson Foundation Policies for Action Program.