Threshold-based integrated funding pilots are used where fixed or baseline funding is insufficient to manage unpredictable spikes in need. These models introduce defined triggers—such as activity levels, clinical complexity, or risk indicators—at which additional funding becomes available. This allows providers to respond to increased demand without compromising care quality or financial stability. However, threshold models also introduce risk if triggers are poorly defined or weakly governed. As explored across the Impact Insights Hub’s integrated funding pilots and its wider focus on new service models, the success of threshold-based funding depends on clear operational rules, robust monitoring, and strong safeguards against unintended consequences.
Why threshold-based models are used
In many integrated care settings, demand is not evenly distributed. Certain individuals or periods may require significantly more resource due to crisis, deterioration, or complex need. Threshold-based funding allows systems to accommodate these variations without overfunding baseline capacity.
This approach is particularly useful in pilots where demand patterns are still being understood. It provides flexibility while maintaining overall budget control.
What makes a threshold model credible
A credible model defines thresholds clearly and ensures they are based on meaningful indicators. It must also include controls to prevent unnecessary escalation and ensure that additional funding is used appropriately.
Operational example 1: Crisis escalation threshold in behavioral health pilot
In day-to-day delivery, a pilot provides baseline funding for community behavioral health services, with additional funding triggered when individuals reach defined crisis thresholds. Teams monitor risk indicators and activate additional support when thresholds are met.
This practice exists because crisis demand can exceed baseline capacity and requires rapid response.
If absent, providers may be unable to respond effectively to crises, leading to increased hospital use.
The observable outcome includes improved crisis response and reduced acute admissions.
Operational example 2: High-utilization threshold in integrated care pilot
In routine delivery, a pilot triggers additional funding when individuals exceed defined utilization thresholds, such as repeated emergency visits. Providers use this funding to intensify support and coordination.
This practice exists to address the needs of high-utilization populations.
If absent, these individuals may continue to generate high costs without targeted intervention.
The observable outcome includes reduced utilization and improved outcomes.
Operational example 3: Housing instability threshold pilot
In day-to-day practice, a pilot triggers additional funding when individuals experience housing instability. Providers use the funding to provide targeted support.
This practice exists because housing instability significantly impacts health outcomes.
If absent, individuals may experience worsening instability and increased service use.
The observable outcome includes improved housing stability and reduced service demand.
Governance and funder expectations
Funders expect threshold models to include clear definitions, monitoring, and controls. Providers must demonstrate appropriate use of additional funding.
Oversight bodies require evidence that thresholds are not being manipulated.
Why this model matters now
Threshold-based integrated funding pilots provide flexibility in managing variable demand. When designed well, they support responsive care. When poorly designed, they risk overuse and cost escalation. Strong governance is essential.