Pay for Success is a new financial and contracting tool that pays investor-funded nonprofits for delivering measurable social outcomes. This approach, while still new, increases investment in evidence-based programs and creates investable opportunities for impact investors and potentially CRA-motivated banks as well. One particularly ripe opportunity for Pay for Success is in health improvement.
This article, authored by Ian Galloway of the Federal Reserve Bank of San Francisco, appeared in the November 2014 issue of Health Affairs. It explores how Pay for Success could be used to increase investment in illness prevention, save health care costs, improve patient outcomes, and create a market that values health, not just health care.