Collaborative Approach To Public Goods Investments (CAPGI): Lessons Learned From A Feasibility Study

Extensive research has demonstrated that people living in communities with deficits in the social determinants of health (SDOH) face poorer health and social outcomes. The disparate health and economic impacts of the COVID-19 pandemic, along with glaring examples of racial injustice in law enforcement, have brought clarity and resolve to address structural inequities at their sources.

We published a Health Affairs paper in 2018 that explained how the economic “free rider” problem is partly responsible for the chronic underinvestment in desperately-needed social supports that lie upstream from the health care system. That paper also outlined a potential solution, based on an economic model we have since adapted further for the SDOH context. The model and processes, which we call “Collaborative Approach to Public Goods Investments” (CAPGI), would channel local stakeholder self-interest (using confidential bidding) into a sustainable financing mechanism for mutually beneficial upstream investments. Benefits may be financial or non-financial, depending on the intervention and stakeholder. CAPGI is predicated on a level of trust and collaboration that is achievable but by no means universal in US communities.

This post briefly describes the results of a one-year feasibility project (June 2019-May 2020) to establish whether CAPGI would be interesting and feasible enough for real communities to implement and test. The simple answer is yes, but most communities need more technical assistance (TA) and time than we could provide in the spring of COVID-19. However, stakeholders in Cleveland voted on July 29, 2020 to use CAPGI to provide medically tailored meals to food-insecure and socially isolated older adults with common chronic conditions in 2021.

What Is The CAPGI Model?

Given the evidence that upstream interventions in addressing social determinants in targeted ways can lower costs and improve outcomes and equity, why have we underinvested in such interventions? In our paper, we argued that upstream spending on SDOH has the properties of a public good:

In contrast to private goods such as tennis racquets or ice cream, public goods deliver benefits to different people and sectors simultaneously … and those benefits cannot be efficiently limited to those who pay directly for them. … The theory of and experience with public goods such as national defense and transportation infrastructure suggest that public goods will be undersupplied by self-interested actors in a free market, even in cases where the market is dominated by nonprofit health care provider organizations, nonprofit health plans, and governments at every level.

This undersupply, the free-rider problem, reflects the fact that payers cannot easily prevent nonpayers from benefiting and thereby capturing some of the return on their investment.

We proposed to address the free rider problem with a novel community financing mechanism, CAPGI. The linchpin of the mechanism is a financially neutral “trusted broker”—typically, but not necessarily, , a nonprofit or philanthropy—that can convene local health system stakeholders such as health plans, hospital systems, employers, community health centers, community based organizations, and county health and social service departments. The full details are laid out in our article and the webinars we prepared for our feasibility study, but the trusted broker would convene all health care stakeholders who bear financial responsibility for, or who have a mission-driven interest in, the welfare of targeted local populations. The group would choose one or more social determinant deficits to target; with the help of technical advisors, the trusted broker would then help the stakeholders predict the impact of one or more social determinant interventions on their organization’s goals.

Armed with this information, stakeholders, both financial and mission-driven, would then submit confidential “bids” reflecting what they are willing to pay to reduce the social determinant deficit. If the sum of the bids exceeds the cost of the project, the project is economically viable. That viability is based on the “surplus” between the aggregate bids and the cost of the project. The trusted broker would then assign prices, which would be uniformly discounted from each bid by the percentage of the surplus. This discount, the gap between value expected and price assigned, can be understood as a kind of return on investment (ROI) and creates the incentive for self-interested actors to continue to participate in the future. The model and process as a whole would create a sustainable funding stream for implementation of the interventions by facilitating informed, self-interested investments by stakeholders, rather than sporadic charitable donations.

The Feasibility Study

The details of how we conducted the feasibility study are summarized in the appendix below and are available here. The overarching question of this study was: Is a collaborative approach to financing social determinants of health interventions feasible in actual communities in the US?

Our answer is a qualified “yes,” and we organize elaborations on our answer into three categories:

• Is there sufficient will?
• Is there a clear way?
• Do enough local stakeholders believe in the potential of CAPGI?

On The Will

Even before COVID-19, broad interest in collaborative financing mechanisms for SDOH was manifested in two ways. First, stakeholders showed considerable interest in our paper and webinars, and multiple sectors—health care, social service, local governments—joined in the coalitions and working groups that met with us. This interest was born at least partly from a joint recognition of the free rider problem: most organizations, and even sectors, are unlikely to single-handedly finance projects that have public good-like qualities, as most SDOH interventions do.

Second, stakeholders in the 10 communities we visited demonstrated their interest through the considerable effort they put towards arranging meetings and preparing materials. Many spent time fleshing out what intervention(s) they wanted to use CAPGI to fund and who might play what role in implementing the model, and strategizing about how past collaborations’ histories affected local attitudes about new opportunities. The range of organizations willing and able to play the trusted broker roles was particularly impressive to us, from United Ways to county governments to local foundations. We were intentional in requiring that the trusted broker organization could not be a bidding organization, which explains why we have no health care delivery organizations or payers in the trusted broker role.

On The Way

By the time we arrived, communities were generally familiar with the model and how it was designed to solve the free rider problem. Many participants still want government to do more upstream investing; after COVID-19 and George Floyd, political leaders should be moved to act. Our model is intended to complement, rather than replace, government action on social determinants of heath. Recognizing that government is not likely to have the means to meet all upstream needs alone anytime soon, we believe there to be a role for CAPGI and other creative financing solutions in the short and perhaps medium term.

The CAPGI model can use mostly private stakeholder money but will need government cooperation. Early on, this may take the form of relaxing regulations or providing access to data. Even if neither of these functions is required, responsibility for the project may ultimately be strategically transitioned to government, so involving government officials early on is prudent. We convened experts who helped us identify a set of pathways for the state to play such a role in each community.

We observed considerable interest in getting non-financial valuations into the model and investment process. Government, local philanthropy, or civic groups may be stakeholders with interest in improving health status and well-being of community members per se, not related to health care savings. Most participants saw a successful CAPGI project as a pathway to more ambitious collaborations once the proof of collaboration’s feasibility is established in their community.

On Believing In The Potential Of CAPGI To Work

Stakeholders’ need to address the pandemic limited our ability to test the degree of confidence in the CAPGI model and processes this spring. Health insurers appeared to be the stakeholders most reluctant to join the initial local CAPGI groups, though plans in five of the communities either met with us directly or otherwise indicated strong interest in the project (e.g., by funding a pilot of the would-be CAPGI intervention). Still, some plans prefer to “wait and see” what active groups “come up with” before committing to participate.

We developed business case templates to support stakeholders in determining the value of various interventions and found they were well received, particularly by insurers. Pandemic-related time constraints prevented more of those business case conversations from taking place, which we anticipate will be necessary in all sites. Even so, we were able to discuss business cases in detail with each stakeholder in Cleveland late this spring and early this summer after the feasibility study ended, and the stakeholder coalition in that city (Accountable Communities for Health Greater Cleveland Consortium) voted on July 29, 2020 to use CAPGI to provide medically tailored meals to food-insecure and socially isolated older adults in 2021. Participant organizations will bid to determine what portion of the cost each will bear over the next few months.  

Next Steps

We were heartened to see how CAPGI was received and we were energized by the commitment and talent in a wide range of community contexts: cities large and small, states that did and did not expand Medicaid; majority white and majority non-white communities alike. We will soon make available our longer report and implementation tools to inform future efforts that may be undertaken by others. We intend to seek technical assistance and evaluation funding to continue supporting these communities and hopefully others in their journey to collaborative and sustainable financing of investments in SDOH. We will follow the experience of our pioneer implementation site in Cleveland closely and continue to refine the model as necessary in future publications.

CAPGI will not be a panacea for our upstream deficits, but it can be a useful tool to simultaneously improve some aspects of community life and some stakeholders’ bottom lines. We hope that by demonstrating the power and efficacy of collaborative efforts, CAPGI may encourage more ambitious collective strategies in the long run.

Authors’ Note

The work discussed in this post was funded by the Commonwealth Fund, the Missouri Foundation for Health, the Episcopal Health Foundation, and the California Health Care Foundation.

Appendix

We conducted four 90-minute webinars in July and September of 2019 to teach the CAPGI model and necessary processes at no charge to all interested in collaborative financing of SDOH. For an idea originating in an obscure economic model, a surprising number of participants attended: on average about 240 from 80-plus unique counties, from Alaska to Massachusetts. After the last webinar, 23 communities submitted our required survey of their stakeholder coalition’s maturity and breadth, a de facto application to be considered for a site visit. We supplemented these results with public data on SDOH environments and demography.

Our funders and Advisory Council met with us in October to discuss criteria for ranking sites by likelihood of succeeding with a collaborative funding project. We selected 11 communities to visit from January – April 2020. The SDOH interventions under consideration therein include:

• supportive housing
• medically-tailored meals
• a reduction in hospital readmissions
• post-natal home visiting
• behavioral health crisis support

We completed five 2-day and one 1-day assessment visits before COVID-19 stopped travel and diverted front-line organizations to focus on immediate concerns rather than novel SDOH financing mechanisms. We then engaged four other sites virtually and conducted numerous follow-up conversations in all 10 communities (one site went on a hiatus). Site visits, physical or not, were mutual assessment exercises.

The CAPGI Team aimed to determine if the community coalition was willing and able to execute a collaborative financing project for SDOH, and the community coalition tried to determine if the CAPGI model and process were right for their needs and capacities. All 10 sites have maintained their interest in pushing forward with implementation, as circumstances permit. These sites are Spokane, WA; Grand Junction, CO; Waco, TX; Kansas City, MO/KS; Springfield, MO; Cleveland, OH; Hartford, CT; the District of Columbia; Anne Arundel County, MD; and Eastern Virginia.

We assessed each community’s ability to undertake a CAPGI funding process in these domains:

• clarity about and readiness to perform trusted broker (TB) roles
• precision of intervention definition
• range of stakeholders involved
• credibility of proposed vendors
• local data management capacity
• local philanthropy interest

Based on our assessment, we categorized our 10 communities into three buckets: six that are close to ready with stakeholder time being the rate-limiting constraint this spring; two that are not far away but need specific stakeholders to show more commitment than they have to date; and two that need considerable time to work out implementation details and/or stakeholder responsibilities. These judgments were based on our interviews as well as two surveys—of all site visit participants and all catalysts (local hosts) of our site visits, respectively. We found that communities are most in need of support for data management capacity and engaging stakeholders to work through clear business cases for their investment. We are hopeful we can continue this work in the near term.

We developed three sets of tools (available upon request) during our feasibility evaluations:

• business case templates tailored for health plans, hospitals, local government, employers, and philanthropy to calculate potential ROIs under different scenarios
• data flow mappings that highlight which organizations must share which data elements with whom to verify performance and impacts
• a bibliography of all SDOH interventions being considered by our sites, which can help stakeholders estimate impacts on metrics of interest (utilization, cost, health status, etc.).