November 02, 2018
3 min read

Pay for Success ‘promising tool’ to finance social determinants of health interventions

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The Pay for Success tool — private sector investments that could possibly provide both financial return and develop a social or public benefit — had challenges but still was a “promising tool” to cover the costs of social determinants of health-related interventions in underserved and marginalized populations, according to an article appearing in the American Journal of Public Health.

“To date, there has been little research or commentary regarding the potential for and challenges of [Pay for Success] financing from a public health perspective,” Samantha Iovan, MPH, a project manager at the Gerald R. Ford School of Public Policy of the University of Michigan and colleagues wrote.

Iovan and colleagues conducted a weekly global landscape surveillance that encompassed project funder and government reports and websites, project contracts, third-party organization documents, media sources and legislative databases.

The 82 projects found all started before the end of 2017. Most were based in the U.S. and U.K., but 18 other countries’ projects were evaluated. Projects addressed topics such as behavioral and mental health, homelessness, unemployment and youth education.

Iovan and colleagues found that though Pay for Success funding sometimes covered interventions that were cost-effective, the funding tool was more likely to finance interventions that benefitted the public sector and yielded cost savings.

“Because of growing interest in the Pay for Success financing model and its ability to garner private capital to provide upfront funding to address the social determinants of health, we believe that Pay for Success has great potential to improve population health and reduce health disparities across the globe. Pay for Success financing allows governments to implement and expand evidence-based interventions focused on prevention and upstream determinants of health without raising additional public revenue,” Iovan and colleagues wrote.

They also identified some challenges that suggest not everyone will benefit from the financed interventions.

“Because private investors typically do not want to wait a long time to receive a return on investment, Pay for Success prioritizes interventions that achieve outcomes relatively quickly. ... Pay for Success projects are incentivized to target interventions in high-risk subgroups rather than broader populations, sometimes to the detriment of primary or secondary prevention goals. Finally, there are a number of administrative, legal and regulatory issues associated with the Pay for Success financing model,” Iovan and colleagues wrote.

Researchers also suggested potential project funders “learn from the successes and failures of all projects” as they implement future interventions that address the social determinants of health. – by Janel Miller

Disclosures: Healio Family Medicine was unable to determine the authors' relevant financial disclosures prior to publication.