Pay for Success Efforts Roll Forward in Congress, Administration

The still small, but growing, field of pay for success made significant strides this week, with Congress readying pay for success legislation and the Obama administration announcing a second round of grants through the Social Innovation Fund.

House Readies New Pay-for-Success Bill

On May 6, Reps. Todd Young (R-IN) and John Delaney (D-MD) introduced a new version of their Social Impact Partnership Act (H.R.5170). It will be one of several bills considered at a Ways and Means Committee hearing on May 11.

After the Republican Study Committee lent the bill its support in late April, it seems poised for swift passage. However, one unknown is whether the bill will move forward on its own or as part of an anti-poverty package that House Speaker Paul Ryan has been pushing.

The legislation’s prospects are also unknown in the Senate, but the new House bill appears to have incorporated some of the provisions in a similar bill introduced by Sens. Orrin Hatch (D-UT) and Michael Bennet (D-CO) last year.

The new House bill (bill text) reduces the price tag from $300 million to $100 million, switches the lead federal agency to the Treasury Department, and includes a federal interagency council and separate appointed commission of experts to assist the interagency council.

Update: On May 11, the House Ways and Means Committee approved the Young/Delaney bill by voice vote. Before approving the bill it rejected two amendments from Democrats. These included an amendment from Rep. Lloyd Doggett (D-TX) to require 50% of funds to be spent on children. Another Doggett amendment would have extended authorization for the TANF program, but it was rejected on a point of order that it was not germane to the broader legislation.

New Social Innovation Fund Intermediary Grants

The Social Innovation Fund (SIF) today announced $6.1 million in new grants to intermediaries under its pay-for-success program, which provides funding for technical assistance and feasibility studies. Intermediaries match this funding and provide subgrants through separate competitions, which are likely to be announced later this year.

SIF’s funding is divided among three intermediaries, two of which also received funding in the first round in late 2014. Eight intermediaries were selected in that first round and, according to SIF, they have provided subgrants to a total of 67 state and local governments and nonprofits involved in PFS projects.

According to SIF, the new grants announced today are:

  • Harvard University Government Performance Lab: With a $2.1 million grant, the Harvard Government Performance Lab will take projects from the feasibility phase to the implementation phase for up to five Pay for Success projects. Since its inception, Harvard GPL has been actively involved in the feasibility and transaction structuring of 26 PFS projects.  The GPL’s mission is to accelerate the pace of progress on tough social challenges by improving the way that governments procure and deliver social services.
  • Local Initiatives Support Corporation (LISC): With a $1.3 million grant, LISC will take projects from the feasibility phase to the implementation phase for three to four service recipients. LISC will identify high-performing service providers that have demonstrated the ability to develop and operate strong evidence-based programs for PFS investment; help standardize content-specific program design and systematize contracting for the social service program; and create a body of high-quality and routinely-collected data across content areas for PFS projects.  In addition to overall project coordination, LISC will raise investment capital for selected projects, undertake financial modeling for Service Recipients, coordinate negotiation of all transaction documents, develop ongoing monitoring and data collection requirements, and support ramp-up activities.
  • Sorenson Impact Center at the University of Utah’s David Eccles School, in partnership with Social Finance, Inc: With a grant of $2.6 million, the Sorenson Impact Center, in partnership with Social Finance, Inc., will provide advanced transaction structuring technical assistance for between four-five service recipients, bringing Pay for Success projects into development in the Western U.S. The partnership will take a proactive and comprehensive approach to help jurisdictions structure projects. This includes assisting organizations with the development of a communications and engagement strategy to support providers, funders and policymakers.

SIF has also been tracking the knowledge gained from its earlier grantees. Last month it released four new reports:


Posted in Social Impact Bonds / Pay for Success

Obama Administration’s New Performance Grade: Improved, But Work Remains

The Obama administration has made substantial progress in measuring federal program effectiveness, but more needs to be done to shift federal funding to programs that work, according to a scorecard released Monday by Results for America, a bipartisan advocacy organization that supports greater performance in government.

“This administration believes in the power of evidence,” said OMB Director Shaun Donovan at an event announcing the new ratings. “Evidence should drive policy decisions. We need to do what works and stop doing what doesn’t.”

The scorecard rated seven federal agencies, both domestic and international, including the Department of Education, HUD, Department of Labor, and USAID. It was assembled after consulting with more than 75 current and former federal officials and other experts earlier this year.

Most of the rated agencies have made significant progress in embedding the use of performance data and program evaluations in their decision-making, according to the report.  It commended the administration for strengthening federal evaluation offices, adopting agencywide evaluation policies and research agendas, and building out information clearinghouses like the Department of Education’s What Works Clearinghouse.

The agencies received lower scores on integrating performance information into the federal grantmaking process, however. The administration received its worst ratings on cutting or shifting funding away from programs, practices or policies that were not working.

Continue reading SIRC’s column at Government Executive.

Posted in Evidence, Government Performance

New Federal Commission’s Top Task May Be Setting a Truly Bipartisan Evidence Agenda

Efforts to broaden the use of data and research in federal policymaking may receive a substantial boost from a commission created by Congress last month.  The new Evidence-based Policymaking Commission, established by legislation signed by President Obama on March 30, is charged with identifying ways to increase the use of such information. Its most important task, however, may not be coming up with new ideas, but providing a bipartisan imprimatur for ideas that already exist.

Continue reading SIRC’s column at Government Executive.

Posted in Evidence

Medicare and Medicaid Continue Transition to Value-based Payments

Earlier this month, the Department of Health and Human Services (HHS) announced that 30 percent of Medicare payments are now tied to quality or value, nearly a year ahead of goals that it set for itself in early 2015.

According to HHS, over 10 million Medicare recipients are receiving care under alternatives to traditional fee-for-service arrangements. HHS credited most of its progress to the growth of Accountable Care Organizations (ACOs).  According to the department, there are now a total of 477 ACOs participating in its Shared Savings Program and the Pioneer ACO program.

The administration says that the transition to ACOs and value-based care will reduce costs and improve health-related outcomes for patients. It hopes to tie 50 percent of Medicare payments to these models by the end of 2018.

The ACO model is also increasingly being adopted within the Medicaid program. According to a recent report from the Center for Healthcare Strategies, eight states ─ Colorado, Illinois, Maine, Minnesota, New Jersey, Oregon, Utah, and Vermont ─ have launched Medicaid ACO or ACO-like programs, serving a total of more than 2.5 million beneficiaries.

“Value-based purchasing is quickly becoming the new paradigm in Medicaid,” said Tom Betlach,  president of the National Association of Medicaid Directors (NAMD), which released a study of alternative payment models in Medicaid in late March.

These developments suggest rapid advancement in the use of value-based payment systems, but there is enormous variation among them, including the size of their financial incentives and the performance measures that are being used, according to a recent analysis for Health Affairs.

Organizations like the National Quality Forum have been working to support improvements in performance measures. Progress will also depend heavily on advancements in electronic health record (EHR) systems, which are still being rolled out in many health systems and have experienced a number of usability, interoperability, and security problems.

Some provider groups remain skeptical. According to a study released by American Academy of Family Physicians in late 2015, 69 percent of its members said that value-based payments would not improve patient care. They cited a number of barriers, including lack of evidence that using performance measures improved such care, lack of standardized measures, and increased costs in terms of staff time and training.

HHS is working to address these problems through a number of initiatives, including technical assistance and a pilot program for testing new financial incentives, quality standards, and increases in coordinated care.


Posted in Health, Social Impact Bonds / Pay for Success

Social Innovation Directory Updated

SIRC’s directory has been updated!  The directory includes over 1,000 links to reports and other resources on social innovation and performance issues.  The directory is accessible below and also through links above and to the right.


Cross-cutting Topics

The directory is updated a few times per year.  For the latest news and resources, consider subscribing to SIRC’s email list (see the top right of this page).

Posted in Uncategorized

Congress Passes Evidence-based Policymaking Commission Bill

The House today approved legislation (H.R. 1831) that would create an Evidence-Based Policymaking Commission charged with making recommendations to Congress and the administration on the use of evaluations and administrative data for assessing federal programs and tax expenditures.

The bill, an amended version of which was passed by the Senate on March 16, now goes to President Obama who is expected to sign it into law.

The bill (text) creates a 15-member commission that is charged with developing recommendations. Appointments to the commission must be made within 45 days of the bill’s enactment. The commission is directed to issue a report within 15 months.

“We won’t be able to expand opportunity in this country until we figure out which policies actually work. That’s why we need to make use of all the data we already collect, and that’s exactly what the Evidence-Based Policymaking Commission would help us do,” said House Speaker Paul Ryan in a statement.

“I am proud that Speaker Ryan and I were once again able to break through the gridlock and work together to take this step toward improving federal programs and our tax code,” said Sen. Patty Murray in a statement after the bill passed in the Senate.

Among other responsibilities, the commission is directed to develop recommendations for creating a federal clearinghouse for program and survey data for researchers, officials, and institutions while simultaneously protecting individual privacy and confidentiality.

It is also directed to make recommendations on how best to incorporate outcomes measurement, randomized controlled trials, and rigorous impact analysis into federal program design.

Update: President Obama signed the legislation on March 30, 2016.


Posted in Evidence

Hidden In the Partisan Budget Divide: An Agreement on Evidence-based Policy

Presidential budgets are often greeted with little enthusiasm when Congress is controlled by the opposite party. This year’s Obama budget is no exception. But buried within the president’s $4.15 trillion budget are recommendations on evidence-based policymaking that may prove more influential than some expect.

Continue reading SIRC’s column at Government Executive.

Posted in Evidence

Senate Committee Passes Health IT Improvement Bill

The Senate Health, Education, Labor and Pensions (HELP) Committee passed legislation (S.2511) on February 9 that would address a number of shortcomings in federal law governing electronic health records (EHRs). The committee passed the bill unanimously by a vote of 22-0. It is awaiting action on the Senate floor.

Electronic health records are computer records that contain a patient’s medical history, including information on past physician visits, diagnoses, and medications. They can create a more comprehensive view of a patient’s health and reduce costs by avoiding unnecessary duplication of tests. A recent study funded by Agency for Healthcare Research and Quality suggests that EHRs have helped reduce adverse events such as hospital-acquired infections. Under optimal conditions, they can also be shared between health providers and improve care coordination.

The federal government has provided substantial financial subsidies to encourage the use of EHRs and they are being increasingly adopted by hospitals and other health providers.

Despite their potential benefits, however, their adoption has not been completely smooth. Some doctors complain that EHRs force them to spend too much time looking over and updating electronic health records and less time with their patients.

Their potential for coordinating care across multiple providers has been hampered by poor interoperability among competing systems. EHRs have also come under increasing attack from cyber criminals. Such records often include substantial personal and financial information, well beyond what might be found financial or credit card records. In some cases, such information has been used for insurance fraud. In other cases, hospitals have been threatened with data destruction and subjected to ransom demands.

The new Senate bill (summary) would address a number of these barriers, including promoting interoperability among EHR systems and allowing other health professionals to update records so that doctors can focus more on patients.

In late February, the Obama administration also announced an agreement among major hospital systems, leading vendors representing 90 percent of the EHR market, and health care systems in 46 states that would reduce barriers to information sharing and make it easier for patients to access their records.

Update: The House Oversight and Government Reform Subcommittee held a hearing on health IT issues on March 22.

Posted in Health

Building Performance Systems in Child Welfare

The Social Innovation Research Center has today released a new report:

Building Performance Systems in Child Welfare
Lessons from Performance-based Contracting, Performance Management, and the Emergence of Social Impact Bonds
(February 8, 2016)

The executive summary is below.

Executive Summary

Child welfare organizations work with one of the nation’s most vulnerable populations, children who have been abused or neglected and removed from their homes. While performance is important for all social services, the stakes are especially high for these children, where failure can mean futures marked by domestic violence, homelessness, teenage pregnancy, criminal involvement, and suicide.

Despite this hard reality, there are also reasons to be optimistic. Advances have been made in multiple performance-related systems, including evidence-based practices, performance management, data systems, performance-based contracting, and social impact bonds. Most of these have made individual contributions, but they are also substantially interconnected and mutually reinforcing.

These advances have not yet significantly changed all or even most child welfare systems, but there are glimmers of progress throughout the field. This paper reviews these overall national trends in the context of two promising cases studies – one of performance-based contracting in the state of Tennessee and the other of a high-performing national nonprofit provider based in the state, Youth Villages – before concluding with lessons learned from the recent emergence of social impact bonds.

Highlights are summarized below:

Performance-based Contracts:
  A central tenet of child welfare practice is that children fare better in stable, loving homes. Several policy changes have been instituted at the federal and state levels over the past two decades to divert more children from group homes to more permanent living arrangements with biological or adoptive families or legal guardians.

One policy change that has been instituted in several states is performance-based contracting. Such contracts establish financial incentives for providers to achieve faster placement of children in permanent homes and they appear to have produced results.  A 2011 study of performance-based contracting in three states found that they were associated with improved permanency-related outcomes for children. Tennessee’s system has followed this same pattern.

Unfortunately, because outcomes can be driven by many factors other than the work of providers, including the availability of foster homes or other policies adopted at the same time, it is difficult to be certain how much, if any, of the observed improvements are attributable to performance-based contracts. Indeed, the general history of performance-based contracting contains several examples of systems that appeared to be generating positive results only to see these results overturned when subjected to more rigorous impact studies.

A closer look at this overall history, however, also reveals a number of consistent design flaws. Reviewing Tennessee’s system in light of these flaws, which have largely been avoided, provides reason to be cautiously optimistic that it is actually contributing to improved permanency for the state’s foster children.

Service Provider Case Study:
  Federal and state policies can establish a supportive framework, but actual improvements must take place on the front lines. This paper explores how one nationally-recognized child welfare provider, Youth Villages, has implemented a best-in-class performance system within Tennessee’s broader system of performance-based contracting. It explores several major components, including the organization’s: (1) leadership and culture; (2) evidence-based program models; (3) performance management system; (4) use of follow-up evaluations; and (5) funding sources for its performance-related work

Social Impact Bonds:
While performance-based contracts have a longer track record, social impact bonds have also begun to draw interest in recent years, with several child welfare-related projects now underway both in the United States and abroad. This paper compares the strengths and weaknesses of these two approaches and concludes that while different, they are highly complementary. Although performance-based contracts are easier to scale, social impact bonds may help address some of the known shortcomings of performance-based contracts.

The paper concludes with recommendations to policymakers on how to further improve performance systems throughout the nation’s child welfare system.

Full Report


Posted in Children and Families