Health care spending in the United States is high, and nearly half is paid by the federal government and by state and local governments. Given these costs, public and private stakeholders have led several different efforts to reduce health care spending. However, many social programs that can improve health outcomes are not typically covered by health insurance. This has recently led several states, local governments, and nonprofit organizations to explore the pay for success (PFS) model as a potential financing solution. Despite this interest, the existing health care system presents several unique challenges that have created obstacles to launching PFS projects. This brief explores these challenges and provides recommendations on the path forward for organizations interested in pursuing health care-related PFS projects.
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