With a $1.33 million grant to deploy the innovative Pay for Success model, LISC is helping scale promising programs that benefit communities in all kinds of ways. For starters, we’re working in Michigan to broaden the reach of the Diabetes Prevention Program, which has a national track record for reducing the onset of the disease and its debilitating impact on low-income communities of color.
The American health system is in the middle of its largest transformation since the introduction of Medicaid more than 50 years ago. Driven originally by the Affordable Care Act, the industry is shifting from a system based on acute care procedures to one that is beginning to focus on prevention largely through value-based payment mechanisms. This makes it a natural partner in the Pay for Success world.
Pay for Success (PFS) is an innovative way of directing public resources to programs and services that work and have long-term measurable outcomes. Under the PFS model, up-front private investors provide funding to scale up promising programs. They get repaid from public sources only if the program meets its goals. PFS allows government to provide services that have prevention goals – often a luxury in a world of annual appropriations and limited resources. And for insurers, it offers a way to pay for preventive services that actually move the needle on health outcomes.
LISC’s official PFS work began in 2016, when the Social Innovation Fund awarded LISC a $1.33 million grant to scale up three PFS programs. This new role in Pay for Success is a natural one for LISC because of our history as an intermediary working with non-profit, government and private sectors, to achieve lasting impact in low-income and distressed communities. It also reinforces LISC’s overarching commitment to closing the health gap in many of those communities. In addition, this would be the first Pay for Success project to use private insurance companies as the back-end payer.
Our PFS partners include the National Kidney Foundation of Michigan’s Diabetes Prevention Center. Diabetes is currently the leading cause of heart disease, kidney disease, stroke and blindness. In 2014, it affected 29 million Americans, and that number increases every year. Diabetes is especially prevalent in racial and ethnic minorities, contributing to large health disparities. People with diabetes incur about $13,700 in medical expenses each year - more than twice the average for people without diabetes. The indirect costs of diabetes – absenteeism, reduced productivity, inability to work and lost production capacity due to early mortality – cost the US $69 billion dollars in 2012, according the American Diabetes Association.
The Diabetes Prevention Center is a CDC-recognized provider of the Diabetes Prevention Program (DPP), a year-long, evidenced-based lifestyle change program aimed at people who have prediabetes or who are at high risk for developing Type 2 diabetes. Trained lifestyle coaches help participants work towards losing weight through healthy eating and participating in physical activity.
Extensive data show that the DPP saves money and improves health outcomes. Research has documented that the program reduces the risk for pre-diabetics of developing the disease by 58 percent, over a three-year period. In a 10-year follow-up study, the model is shown to reduce the incidence of diabetes by 34 percent. LISC is working to scale up the program, using Pay For Success as a funding mechanism. Once launched, the Michigan program will serve 3,500 Medicaid-eligible Black and Hispanic adults over three years.
LISC is currently assembling a team to help bring the project to fruition. In addition to the National Kidney Foundation of Michigan, we have brought in the University of Michigan to design a robust evaluation of the program. We are in conversations with insurance providers who will serve as the back-end payer for the project, as well as up-front investors and philanthropic partners who will provide the early funding to get the program off the ground.
ABOUT THE AUTHOR
Terry Gillen, Director, Pay For Success
Terry is responsible for coordinating the work of LISC’s Pay for Success team. Prior to joining LISC, Terry worked for the City of Philadelphia, as director of the Office of Federal Affairs and as executive director of the Redevelopment Authority. She also served as policy director for the Pennsylvania Department of Community and Economic Development.