Pay For Success Research Articles

The impact of social impact bond financing

AbstractSocial impact bonds (SIBs), also known as Pay for Success, are an innovation in Payment by Results contracting. Investors finance programs and are repaid based on the “SIB effect,” which includes changes in outcomes attributable to financing. We generate a quantitative estimate of this part of the SIB effect for two active labor market programs in the Netherlands and Switzerland. Comparing program impacts within providers using SIB and non‐SIB contracts suggests financing has positive impacts on public benefit receipt, employment, and income. Qualitative research suggests this is because SIB contracts increased pressure for all involved parties, leading to the institutionalization of selection and greater resources for SIB‐financed services. Contracts with high pressure, like SIBs, may compromise both performance requirements and the potential to measure performance. We examine the implications of these findings in relation to agency and stewardship theories and highlight the significance of SIBs as multilateral as opposed to bilateral contracts.

Facilitators and barriers to reunification among housing unstable families

Housing unstable families with child welfare system involvement face multiple challenges to successfully reunifying with their families. This explanatory qualitative study followed up on findings from a county-sponsored Pay for Success (PFS) RCT. The study focused on understanding the facilitators and barriers to reunification, bringing together the perspectives of a random sample of 16 housing-unstable caregivers whose children were in foster care, their PFS program workers, and their child welfare caseworkers. We conducted in-depth, in-person interviews with 52 participants. Major facilitators of reunification included strong client motivation, PFS program workers empowering and advocating for clients, the program’s ability to meet clients’ basic needs, and PFS program worker/child welfare worker collaboration. The barriers participants identified included the clients’ complex and continuing challenges and crises, limited and/or toxic social support systems, and systemic issues within the court and child welfare systems, including evaluations of worthiness and a failure to collaborate. We explore findings regarding their contribution to the literature on housing unstable families involved with child welfare and implications for practice, policy, and research.

Are Social Impact Bonds an Innovation in Finance or Do They Help Finance Social Innovation?

AbstractOutcomes Based Commissioning (OBC) – for example, Pay for Success (in the US) or Payment by Results (in the UK) – has been suggested as a way to provide ‘more’ social services for ‘less’ public resources. Such commissioning is often linked with an innovative financing tool called a Social Impact Bond (SIB). Using data from the Social Finance UK Database and focusing on SIBs in the US and UK, we evaluate whether the SIB approach aligns with the theoretical predictions of social innovation. The results provide limited evidence that SIBs facilitate capital injections from the private sector into the production of social goods as well as facilitate parts of the process of social innovation – namely, piloting and scaling. We conclude that there is significant variation, both between the US and UK and within the US, in social innovation ecosystems and the role played by SIBs.

Does It Pay to Pay for Success? Stakeholder Perceptions of Costs and Benefits of PFS Feasibility Studies*

Pay For Success (PFS) is a financial transaction model used by public entities to access private sector dollars to fund preventative programs for at-risk populations. If predetermined outcomes are met, government agencies pay private investors back with interest. Generally, a PFS feasibility study is conducted that investigates the issue, the target population, and potential evidence-based programs and their outcomes. If a positive return on investment is determined, partners can make a business case for entering into a PFS deal. Through interviews with thirteen stakeholders involved in feasibility studies in Colorado, the costs and benefits of participating in a PFS feasibility studies and barriers to why projects don’t move beyond feasibility are examined. Major benefits include increased collaboration between stakeholders, intense focus on a target population and their needs, increased opportunities for funding and data networks, and a focus on paying for outcomes and an opportunity for programmatic self-assessment.

Implementation Drivers of Pay-for-Success Projects: The U.S. Experience

ABSTRACT Despite mounting worldwide use of Pay-for-Success (PFS) projects to deliver social services, available research consists largely of commentary with scant details on the actual implementation of these projects. This study offers an exploratory analysis of PFS projects in the U.S. from an implementation science perspective to elucidate the challenges to its success. Using inductive and deductive strategies to analyze data obtained from semi-structured interviews with government officials, the study examines factors associated with successful PFS project implementation and concludes that strong organizational commitment and a significant investment of personnel time and energy are required. Recommendations are made for governments interested in such projects to invest in organizational capacity building and PFS training to ensure smooth project implementation.

PCN199 Testing the Potential of Performance Based Financing As a Strategy for Sustainable Health Systems in Latin America: The Case of Colombia

Performance Based Financing (PBF) is a form of incentive where health providers are, at least partially, funded based on their performance to meet targets, being defined as fee-for-service-conditional-on-quality. Some PBF types include: Results Based Financing, Pay for Success or Health Impact Bonds. There have been some case studies in healthcare reported in developed and developing countries but none in Colombia. We conducted a rapid literature review in MEDLINE and grey literature, using a snowball technique. Our search query used PBF and its types limiting results to the last decade. Articles were selected and analyzed by 2 independent reviewers. In addition, a feasibility PBF study was conducted in Colombia to establish an operational, financial and legal framework aiming at benefiting vulnerable population by providing access to innovative oncology treatments. In total 89 articles were found in MEDLINE, identifying country case studies in all continents with predominance in Africa. PBF schemes were mainly related to public health interventions to reduce maternal mortality, increase immunization rates or address some prevalent non-communicable-diseases (e.g. Diabetes, CVD, Mental Health). The feasibility study involved 25 stakeholders from national and state governments, industry, insurers, providers, investors and civil society. The study concluded that there is willingness to invest, operating viability and a legal and regulatory pathway for implementation. Despite challenges associated with PBF, there is stakeholders’ receptivity to explore this funding option to ensure access to innovation in underserved populations, while maintaining healthcare sustainability. During the feasibility study diverse stakeholders’ interests were aligned, opening a window of opportunity to generate trust and operational synergies. A second phase is currently being deployed to detail and fully structure the mechanism, stakeholders’ roles, operation governance, metrics and funding.

Protocol for a randomized controlled trial evaluating the impact of the Nurse-Family Partnership\u2019s home visiting program in South Carolina on maternal and child health outcomes

BackgroundPolicy-makers are increasingly seeking rigorous evidence on the impact of programs that go beyond typical health care settings to improve outcomes for low-income families during the critical period around the transition to parenthood and through early childhood.MethodsThis study is a randomized controlled trial evaluating the impact of the Nurse-Family Partnership’s expansion in South Carolina. The scientific trial was made possible by a “Pay for Success” program embedded within a 1915(b) Waiver from Medicaid secured by the South Carolina Department of Health and Human Services. This protocol describes study procedures and defines primary and secondary health-related outcomes that can be observed during the intervention period (including pregnancy through the child’s first 2 years of life). Primary study outcomes include (1) a composite indicator for adverse birth outcomes including being born small for gestational age, low birth weight (less than 2500 g), preterm birth (less than 37 weeks’ gestation), or perinatal mortality (fetal death at or after 20 weeks of gestation or mortality in the first 7 days of life), (2) a composite outcome indicating health care utilization or mortality associated with major injury or concern for abuse or neglect occurring during the child’s first 24 months of life, and (3) an indicator for an inter-birth interval of < 21 months. Secondary outcomes are defined similarly in three domains: (1) improving pregnancy and birth outcomes, (2) improving child health and development, and (3) altering the maternal life course through changes in family planning.DiscussionEvidence from this trial on the impact of home visiting services delivered at scale as part of a Medicaid benefit can provide policy-makers and stakeholders with crucial information about the effectiveness of home visiting programs in improving health and well-being for low-income mothers and children and about novel financing mechanisms for cross-silo interventions.Trial registrationThe trial was registered prospectively on the American Economic Association Trial Registry (the primary registry for academic economists doing policy trials) on 16 February 2016 (AEARCTR-0001039). ClinicalTrials.gov NCT03360539. Registered on 28 November 2017.

Towards a Theoretical Framework for Social Impact Bonds

Abstract Governments in some of the world’s richest nations appear to be caught in a double challenge of declining social budgets even as social needs are increasing. In this context, Outcomes Based Commissioning (OBC), has been suggested as one way in which ‘more’ social services can be provided for ‘less’ public resources. This form of commissioning is often linked with a new financing tool for social services, referred to in the US as ‘Pay for Success and Payment by Results in the UK or as a ‘Social Impact Bond’ (SIB). However, to date, this approach is under-theorised and this is a limiting factor both for shaping a research and evaluation agenda around SIBs and in understanding how such instruments might develop in future. Without a theoretical rationale for SIBs, it is not straightforward to assess whether, and how well, they have achieved their goals, and how they might be developed further. In this paper we consider two broad approaches to theorising SIBs. One draws on public administration theories, the other on innovation theories. To date, SIBs have often been theorised as the logical next step in the New Public Management (NPM). But NPM itself is a contested theory and recent theoretical innovations in public administration, particularly the concept of New Public Governance might provide a more useful theoretical framework. A second broad approach through which to understand SIBs is their potential to improve the rate and dissemination of innovation. There are many different innovation models that might be applied to better understanding of SIBs. We look first at the concept of Open Innovation with its focus on distributed innovation processes in which knowledge flows across organisational boundaries and more recent articulations – Open Innovation 2.0 – which place greater emphasis on mixed economy collabarations involving: industry; government; universities; and communities and users (the so-called ‘quadruple helix’) to solve societal challenges. We go on to consider social innovation, with its clearer focus on using social means to deliver social outcomes and whether SIBs can be theorised through this lens. No one model is entirely satisfactory as an explanatory framework for SIBs and we conclude by suggesting that a supporting theory combining NPG with elements of Open Innovation 2.0 and social innovation might be a productive approach for shaping future research and, in addition, might suggest some future directions for the next generation of SIBs.

Pay‐for‐Success Development in the United States: Feasible or Failing to Launch?

AbstractSocial impact bonds, known as pay‐for‐success (PFS) initiatives in the United States, have attracted attention as a novel strategy for financing and providing preventive services to the most vulnerable populations. This article provides an exploratory qualitative analysis of the Preschool PFS Feasibility Pilot grant applications and projects initiated by the U.S. Department of Education to encourage state and local exploration of PFS for implementing high‐quality preschool programs. Drawing on the public administration evidence base that informs PFS design, the authors examine the feasibility pilots’ features and investigate why grant applicants saw PFS as a promising strategy for achieving their preschool program goals. The challenges encountered, lessons learned, and perceived viability of fully executed PFS preschool programs are also discussed. Findings show that few projects are advancing toward formal PFS arrangements, with many struggling to overcome constrained capacities, structural and political barriers, and inherent incentives to minimize risk and loss.

Pay for Success: Diffusion of Policy Innovation for Social and Economic Stability

AbstractAcross the United States, communities struggle with numerous social and environmental issues, while the funding to address these issues continues to diminish. Therefore, actors inside and outside of government are seeking new policy solutions to persistent social problems. Significant hurdles to new policies exist, however, including a lack of funding and a reluctance to take on the risks inherent in implementing new programs. A recent innovation in the policy sphere, pay‐for‐success (PFS) financing, has been able to overcome these hurdles. Policy innovation does not come easily, though, and change within government is often slow and methodical. What catalyzes jurisdictions to engage with PFS? By developing an understanding of the mechanisms and processes of PFS, diffusion scholars and practitioners can facilitate innovation within jurisdictions. Such innovation, which the federal government has an opportunity to facilitate, is necessary to shift business‐as‐usual service provision and enable greater social, environmental, and economic stability.

Funding project meets early goals to support consumers, produce cost savings

A little more than a year into its six‐year operation, a mental health Pay for Success (PFS) program designed to deliver publicly funded services to consumers with serious mental illness in Santa Clara County in California is reaping benefits in cost savings by helping its targeted population reduce usage of psychiatric emergency visits and state hospital days. The PFS program, the ninth used in the United States, is the first to work in the mental health arena.

Using Integrated Data to Design and Support Pay For Success Interventions

Pay for Success (PFS) interventions are increasingly being implemented in the U.S. and worldwide to assess social programs under a risk-sharing financial agreement between the public and private sectors. They seek to mitigate risk for the public sector and promote wider experimentation of programs to improve social outcomes. PFS contracts encourage coordination and alignment of goals, outcomes, and metrics across all agents involved - government, service providers, service recipients, funders and investors. Accordingly, these interventions rely heavily on access to high quality data and analysis, making integrated data systems (IDS) valuable assets to support the design, implementation, and evaluation phases of these projects. &#x0D; The ChildHood Integrated Longitudinal Data (CHILD) System, one of the most comprehensive county-level IDS in the nation, has been used to support and inform two Pay for Success projects in Cuyahoga County (Cleveland). Partnering for Family Success is a county-level intervention in the areas of child welfare and housing instability, now into its fourth year of operation. While the intervention was implemented under a randomized controlled trial, analysis with CHILD proved instrumental to inform the project design and address challenges in program implementation. CHILD has also been used to study the feasibility of PFS as a model to expand high quality preschool, under a grant awarded to eight communities nationally. A case study of both initiatives will be presented, highlighting the role of integrated data in supporting and facilitating PFS design and analysis of outcomes, challenges encountered and lessons learned.

"Pay for Success" Projects: Financing Interventions That Address Social Determinants of Health in 20 Countries.

Over the past eight years, there has been an increase in the use of pay for success (PFS) as a financing tool whereby private investors provide initial funding for preventive health and human service interventions. If an independent evaluator deems the interventions successful, investors are repaid by the government. To better understand how PFS is used, we created a global landscape surveillance system to track and analyze data on all PFS projects that have launched through 2017. We focus on the potential for PFS to improve population health by funding interventions that target the social determinants of health. Our findings show that all launched projects to date have implemented interventions aimed at improving the structural and intermediary social determinants of health, primarily in socioeconomically disadvantaged populations. Although there are some challenges associated with PFS, we believe it is a promising tool for financing interventions aimed at social determinants of health in underserved and marginalized populations.

Pay for Success Is Quietly Undergoing a Radical Simplification

Recent changes to rules that dictate the permissible use of large social spending streams are ushering in a radical simplification of pay for success (PFS). These changes greatly reduce the amount of political effort required to secure PFS-enabled sources of spending for any given project; they make it easier to avoid the complexity of social impact bond financing arrangements; and they lead to PFS structures that work systemically across many providers at once, rather than with just one or two at a time.

"Pay for Success" Financing and Home-Based Multicomponent Childhood Asthma Interventions: Modeling Results From the Detroit Medicaid Population.

Pay for Success has emerged as a potential financing mechanism for innovative and cost-effective prevention programs. In the PFS model, interventions that provide value to the public sector are implemented with financing from private investors who receive a payout from the government only if the metrics identified in a performance-based contract are met. In this nascent field, little has been written about the potential for and challenges of PFS initiatives that produce savings and/or value for Medicaid. In order to elucidate the basic economics of a PFS intervention in a Medicaid population, we modeled the potential impact of an evidence-based multicomponent childhood asthma intervention among low-income children enrolled in Medicaid in Detroit. We modeled outcomes and a comparative benefit-cost analysis in 3 risk-based target groups: (1) all children with an asthma diagnosis; (2) children with an asthma-related emergency department visit in the past year; and (3) children with an asthma-related hospitalization in the past year. Modeling scenarios for each group produced estimates of potential state and federal Medicaid savings for different types or levels of investment, the time frames for savings, and some overarching challenges. The PFS economics of a home-based asthma intervention are most viable if it targets children who have already experienced an expensive episode of asthma-related care. In a 7-year demonstration, the overall (undiscounted) modeled potential savings for Group 2 were $1.4 million for the federal Medicaid and $634,000 for the state Medicaid programs, respectively. Targeting children with at least 1 hospitalization in the past year (Group 3) produced estimated potential savings of $2.8 million to federal Medicaid and $1.3 million to state Medicaid. However, current Medicaid rules and regulations pose significant challenges for capturing federal Medicaid savings for PFS payouts. A multicomponent intervention that provides home remediation and medical case management to high-risk children with asthma has significant potential for PFS financing in urban Medicaid populations. However, there are significant administrative and payment challenges, including the limited ability to capture federal Medicaid savings and to use them as a source of investor repayment. Without some policy reform and clear guidance from the federal government, the financing burden of PFS outcome payments will be on the state Medicaid program or some other state-level funding source.

The University of Virginia Pay-for-Success Lab: Jump-Starting University-Based Pay-for-Success Research Labs

This case study gives an overview of the creation of the Pay-for-Success (PFS) Lab at the University of Virginia (UVA). It promotes discussion of how other university institutions can scale up their own research labs with a limited budget, and also introduces students to the PFS concept and the role university research institutions can play in the social impact process. It highlights the key opportunities and challenges of launching such research labs and concludes with several key decision questions that should be considered. Excerpt UVA-ENT-0222 Sept. 4, 2018 The University of Virginia Pay-for-Success Lab: Jumpstarting University-Based Pay-for-Success Research Labs Pay for Success is a powerful strategy for encouraging systemic change in how cities and states address critical local problems. The Pay-for-Success Lab educates leaders about the Pay-for-Success model, assists them with developing a project outline, and provides connections to advisory firms that can guide future project development. In essence, we aim to be the catalyst for initiatives that will improve the lives of at-risk community members in a real and measurable way. —Joshua Ogburn, Director, University of Virginia (UVA) Pay-for-Success (PFS) Lab . . .

Data Use and Challenges in Using Pay for Success to Implement Permanent Supportive Housing: Lessons From the HUD-DOJ Demonstration

Data Use and Challenges in Using Pay for Success to Implement Permanent Supportive Housing: Lessons From the HUD-DOJ Demonstration

DC Water Green Infrastructure Financing: Pay for Success Can Help Water Utilities Pursue Innovative Solutions

The DC Water program illustrates the potential of using the pay‐for‐success model to fund water authority initiatives.

Scaling and Sustaining Effective Early Childhood Programs Through School-Family-University Collaboration.

We describe the development, implementation, and evaluation of a comprehensive preschool to third grade prevention program for the goals of sustaining services at a large scale. The Midwest Child–Parent Center (CPC) Expansion is a multilevel collaborative school reform model designed to improve school achievement and parental involvement from ages 3 to 9. By increasing the dosage, coordination, and comprehensiveness of services, the program is expected to enhance the transition to school and promote more enduring effects on well‐being in multiple domains. We review and evaluate evidence from two longitudinal studies (Midwest CPC, 2012 to present; Chicago Longitudinal Study, 1983 to present) and four implementation examples of how the guiding principles of shared ownership, committed resources, and progress monitoring for improvement can promote effectiveness. The implementation system of partners and further expansion using “Pay for Success” financing shows the feasibility of scaling the program while continuing to improve effectiveness.

Pay for Success as a Policy Tool

Pay for Success as a Policy Tool