Nonprofit Finance Fund spoke with Green & Healthy Homes Initiative, the University of Utah Health Plans, and Salt Lake County Office of Regional Development about the Salt Lake Asthma Pay for Success Project. This blog is part of an interview series with selected project partners from our Social Innovation Fund transaction structuring competition.
Tell us about the genesis of this PFS project. What was the impetus? How were the stakeholders who have been moving the project forward brought together originally?
GHHI: Effective asthma interventions require the identification and removal of asthma triggers-such as mold and pests-from the home of the asthma sufferer, in addition to medication and education. However, it is difficult to get Medicaid reimbursement for this in-home remediation, so families in low-income communities struggle to find solutions to the root causes of their asthma attacks. We viewed PFS financing as a tremendous opportunity to provide comprehensive preventive services to those who suffer from asthma and to build the evidence base for this intervention.
We received an award from the Social Innovation Fund to lead PFS feasibility studies in five jurisdictions around the country. University of Utah Health Plans and Salt Lake County Office of Regional Development were accepted to our cohort because they had a strong relationship and had already piloted their combined asthma services with impressive results. After the feasibility study was completed in 2016, the team decided to move forward to the transaction structuring phase.
Salt Lake County:
In late 2012, we became part of the national GHHI network and began implementing the GHHI healthy housing model, which involves aligning and bringing together resources to address health, safety, and energy efficiency issues in homes across low-income communities. We started working with medical providers to improve health outcomes and saw immediate and often amazing results. Some people told us after the work was completed that they got their lives back and could breathe for the first time in years. When we began to work with University of Utah Health Plans, we realized right away what a tremendous partnership it was. Salt Lake County has been a national leader in the development of Pay for Success projects and this has created an innovative environment that is supportive of this effort.
University of Utah Health Plans (UUHP): We contracted with the State of Utah to manage the population health and costs of its Medicaid members in January 2013. It was apparent that we would need to build community partnerships to meet the ongoing demands related to the environmental issues facing some of our members who experience negative health impacts from living in substandard housing.
In collaboration with Salt Lake County, we decided to implement a pilot serving ten families of children with severe asthma in 2014. Our care management team provided education and medication to the families and referred them to partners at Salt Lake County, who provided full home environmental assessments and remediation of asthma triggers. We were enthusiastic to see the results Salt Lake County had witnessed in implementing GHHI’s healthy housing model continue. The intervention provided substantial relief to these families in need and on top of that yielded average savings of over $600 per member per month. These promising results were an important starting point for the development of the PFS project. This first pilot phase and subsequent iterations enabled us to refine processes to better serve our members.
An innovative element of this project is that, if successful, it will be the first project involving a private back-end payor utilizing Medicaid funds for success payments. Please tell us more about this proposed partnership.
University of Utah Health Plans: We are excited to participate in a first-of-its-kind PFS model with the hopes that it will open doors to other similar projects. As a health plan serving a Medicaid population, we focus on the “Triple Aim” of improving population health, improving experience of care, and reducing per-capita costs. PFS and its focus on outcomes aligns extremely well with these goals, so it makes sense for private health plans that administer Medicaid funds to be back-end payors in PFS transactions. Expected outcomes from this intervention are reductions in inpatient and emergency department visits, and lower costs for high-need asthmatic children and adults. We also plan to study metrics that will not be tied to success payments in order to examine whether the intervention improves medication compliance, reduces absenteeism from school and work, and improves the health of other family members in the household.
The use of Medicaid funds carries additional complexities for the PFS payment mechanism because it involves state and matched federal dollars. We are encouraged by the progress we have made so far and are looking forward to paving the path for private insurance plans to utilize PFS financing as another tool to improve outcomes for their members.
GHHI: UUHP has proven its willingness to innovate and overcome challenges throughout our engagement on this project. In addition to being the back-end payor, UUHP will provide critical services with its managed care team. We are optimistic that its leadership will establish a precedent that will unlock Medicaid back-end funding for numerous other health-related PFS projects. Helping tie Medicaid spending, which totals $550 billion, to outcomes would be a significant step forward for the field. While the healthcare field has an increasing focus on value, which is encouraging, no federal or state Medicaid agencies have formally authorized a PFS contract as a value-based payment arrangement. Through several discussions with Medicaid officials, we have identified short-term and long-term solutions that would allow a health plan to participate as a PFS back-end payor and utilize resulting cost savings to repay investors.
Another unique aspect of the project is the use of in-depth actuarial analysis, which involved an actuarial firm analyzing UUHP’s data to provide detailed cost savings projections. Adding the element of actuarial certification to the project’s cost-benefit analysis helps establish credibility in the healthcare field and has enabled GHHI and partners to make significant progress building support for PFS with state and federal Medicaid agencies.
As you know, the road to launching a PFS project is a long one! Can you share with us what the biggest challenge to date has been? How are you and your partners approaching this challenge?
University of Utah Health Plans: One of the challenges has been bringing together agencies that don’t normally partner and integrating processes into one program. In the two small pilots that we have completed with Salt Lake County, we have been able to continually improve processes and reporting. Effective and efficient enrollment of families to the program, in particular, is a big focus in each pilot. We just launched a third pilot and continue to revise processes to better address the needs and expectations of the program.
Salt Lake County: The process has taken longer than hoped, but we have gained a lot in working on pilot projects throughout the project. This has given us time to learn and improve what we do.
GHHI: While the local partners have focused primarily on streamlining operations, we have been tackling the challenge of navigating the complex world of Medicaid payment reform. We are working on similar projects in several other states and each state’s Medicaid program is different. While there is some general uncertainty around the healthcare field currently, we are encouraged by meetings we have had with Medicaid leaders that a focus on outcomes and value will continue to grow. We hope this project will help accelerate that growth in the field.