Most healthcare payment models reward volume. PACE doesn't. Under its capitated structure, a PACE organisation receives a fixed monthly payment per participant and is responsible for that person's full care, medical, social and everything in between. If a participant ends up in hospital, the program doesn't get paid more to cover it. The cost comes straight out of the same fixed payment.
That single design choice changes the incentive completely. A PACE program doesn't just want to avoid hospitalisations because it's better for the participant, though it is. It needs to avoid them because every avoidable admission is a direct hit to the program's ability to operate sustainably.
Who PACE Serves and How the Program Is Built
PACE eligibility is specific. Participants must be at least 55 years old, live within the program's service area, and be certified by their state as needing a nursing home level of care, while still being able to live safely in the community with support. Most participants qualify for both Medicare and Medicaid.
An interdisciplinary team runs the program: a primary care physician, nurse, social worker, physical therapist, dietitian and other specialists, all working from the same care plan. Most services centre on an adult day health centre, where participants attend for primary care, therapy, meals and social activities, supplemented by home visits and referral services as needed.
The financial structure matches that scope. A PACE organisation takes on full financial risk for every participant's care, with no cap on amount, duration or scope of services, and no separate deductibles or co-pays for participants. That's what makes the capitated model so unusual: nearly every other part of healthcare bills for what happens after the fact. PACE bills for who it's responsible for, then absorbs the cost of everything that happens to that person, whether or not anyone saw it coming. A hospital stay, a specialist visit, a piece of durable medical equipment, none of it generates additional revenue for the program. It all comes out of the same fixed monthly amount.
The Blind Spot Between Day Centre Visits
Most of a participant's life happens away from the day centre and outside scheduled visits. A fall on a Tuesday afternoon. A few days of skipped meals. A gradual, easy-to-miss shift in how someone's showing up: quieter, more confused, less steady on their feet. None of that shows up in a chart until it's already become a crisis serious enough for an ER visit.
That gap matters more here than almost anywhere else in healthcare, because a PACE organisation is on the hook for the outcome either way. The same fixed payment covers a quiet, stable month and a month that ends in a hospital admission. The only variable is whether the care team saw the shift coming.
Closing the Gap Without Adding More Visits
Closing that gap doesn't require replacing anything PACE teams already do well. It requires visibility into the parts of a participant's week that currently go unseen: family observations, changes in routine, early signs of decline, so care teams can act on a concerning pattern before it becomes an emergency room visit instead of finding out about it after the fact.
What Between-Visit Visibility Looks Like in Practice
Picture a participant who lives with her daughter and attends the day centre three days a week. On the days she's not there, her daughter notices she's eating less and seems unsteady getting up from a chair, small changes that wouldn't come up at the next scheduled visit, and that a busy family member might not think to call about on their own.
If that observation reaches the care team the same day, a nurse can follow up, check for a urinary tract infection or a medication issue, and adjust the plan before it becomes a fall or an ER visit. If it doesn't reach anyone until the next day centre visit, the team is reacting to whatever's already happened instead of catching it early.
The mechanism doesn't need to be complicated. It needs to be reliable: a way for what a family notices at home to reach the people who can act on it, consistently, without relying on someone remembering to make a phone call.
What to Track When Evaluating Between-Visit Visibility
Any PACE program considering how to close this gap should look at a few practical measures rather than waiting for the next avoidable admission to make the case. Worth tracking: how often family-reported concerns reach the care team the same day versus days later, how many changes in condition are caught before they escalate to a clinic or ER visit, and how much of the care team's time goes into chasing down information that a reliable reporting channel could have surfaced automatically. None of these require new clinical protocols. They require a consistent way for observations to reach the people who can act on them.
How Elli Cares Supports PACE Care Teams
That's the specific problem Elli Cares is built to solve. Families and caregivers log what they're noticing day to day. Elli's AI Evidence Engine turns that into a clear signal for the care team: something worth a call today, not something buried in next month's chart review. For a PACE program, that's not a nice-to-have feature. It's a direct lever on the thing the capitated model is asking every participating organisation to manage well: keeping people safe at home and out of the hospital.
Frequently Asked Questions
What is PACE's capitated payment model?
PACE organisations receive a fixed monthly payment per participant from Medicare and Medicaid, and take on full financial responsibility for that person's care, including any hospitalization, with no cap on cost.
Who is eligible for PACE?
Participants must be at least 55, live in the program's service area, and be certified as needing a nursing home level of care while still able to live safely in the community with support.
Why do avoidable hospitalizations matter more under PACE than under fee-for-service care?
Under fee-for-service, a hospitalization generates additional billing. Under PACE's capitated model, the cost of that same hospitalization comes out of the fixed monthly payment the program already receives, so avoidable admissions directly reduce program margin rather than adding revenue.
How can PACE programs get visibility between visits without hiring more staff?
By giving families and caregivers a reliable way to share what they're noticing day to day, and routing that information to the care team as a prioritised signal rather than relying on someone remembering to call in.
Does closing the between-visit gap mean replacing PACE's day centre model?
No. The day centre and interdisciplinary team remain the hub of care. Between-visit visibility supplements that model by carrying forward what happens on the days a participant isn't at the centre, so the team isn't working from a partial picture.
Beyond PACE: The Same Problem Across Value-Based Care
The broader lesson extends past PACE. Any value-based model, whether it's PACE, GUIDE, or an MSO managing risk-based contracts, shares the same structural truth: the provider bears the cost of what happens between visits, whether or not they can see it coming. Programs that build real visibility into that gap protect their margin. Programs that don't are carrying that risk without the information to manage it.
