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Pay For Success

Assisted by one of the world leaders in pay for success (PFS) funding, nonprofit Social Finance, we began bringing together a group of social impact and health sector investors, including UnitedHealthcare and Aetna Mercy Care, to sustainably fund our evidence-based K-12 strategies to improve child health and reduce their short- & long-term health costs.

The Pay For Success “self-funding” model was formerly termed Social Impact Bonds. More than 35 Pay For Success projects had been developed in the US over the previous 10 years. This would be the first PFS project implemented in Arizona. It would also be the first whole-population and first K-12 PFS project in the country.

Social Finance is one of the global leaders in developing PFS projects, with a substantial track record in this area. Social Finance works with a number of “Social Impact” Investors, who Social Finance believed would provide the upfront funding to implement this Project. UnitedHealthcare’s headquarters-based social impact fund had expressed strong interest in participating, which was later reinforced by regional senior management.

Arizona AHCCCS Medicaid Plans would not need to spend any money upfront. Instead, the Plans would agree to pay back investment in future years, contingent on the PFS Project achieving verified health cost savings & other goals. These goals would be mutually defined & agreed, before the Project was launched.

Healthy Future US would lead implementation of school-based services in low-income schools, in coordination with Social Finance, schools, AHCCCS/Medicaid Plans & other health organizations, and others. We would utilize the Plan-Develop-Evaluate K-12 systemic program model as a foundation. Participating schools would typically continue to use existing health-related programs and community partnerships, as well as adding new ones such as Playworks, as part of implementing their school wellness policy (LWP) plan.

An independent third-party Evaluator agreed to with the Social Impact Investors and the AHCCCS Plans would evaluate, if the Project is achieving agreed health cost savings & other health-related goals. Assuming those goals were achieved, as certified by the Evaluator, then AHCCCS Plans would be the “Back-end Payors” reimbursing the Social Impact Investors.

One of the ultimate goals would be for CMS (the federal Medicaid agency) to provide a waiver, allowing Arizona AHCCCS Medicaid Plans to use federal funds, in order to operate and expand this work in Arizona Title 1 schools with large AHCCCS Medicaid populations—conditioned on demonstrating health improvements and an adequate ROI.

For more information on Pay For Success, please visit PayForSuccess.org.

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