Blog

Every day social innovators and social innovation organizations across the country are measurably impacting communities and individuals. This Practice to Policy blog series lifts up the voices of the more than 70 organizations that make up the America Forward Coalition and our broader social innovation network by highlighting their outcomes-based solutions to our country’s most pressing social problems and why these solutions must be reflected in our federal policies. Today we will hear from America Forward Coalition member Social Finance about outcomes rate cards and a pilot project they have launched with their partners in Connecticut.

At its core, Pay for Success is about improving outcomes. At the heart of all its components—unique public-private partnerships, investor classes, cost-benefit analyses, access to administrative data, evaluator methodologies, legal structures, to name a few—is a shared focus on outcomes. Over the past seven years, this shared focus has caught the interest of impact investors, social sector practitioners, and policymakers from rural counties to the halls of Congress. With over $200M mobilized in the US, projects across a dozen states addressing issues from homelessness to child and family welfare, and recently passed enabling legislation at the federal level, there is little doubt about the demand for this shift in focus.

And yet, the pace of change has left something to be desired among the ambitious change-makers driving the field forward. The challenges we seek to address are larger, and the social issues more complex, than can be solved by one project—or even the 20 that have been launched to date.

The question is: how do we accelerate this move toward better outcomes?

Last year, Social Finance sought to do just that with the launch of our Outcomes Rate Card Development Competition. As we wrote for America Forward in June 2017, outcomes rate cards standardize the Pay for Success approach by establishing a menu of outcomes of interest to the government and the amount it is willing to pay each time a given outcome is achieved. With one outcomes rate card, governments can launch multiple projects, selecting multiple service providers to deliver on the same rate card.

Momentum for the idea is growing. Earlier this month, we announced four new partnerships to develop outcomes rate cards in jurisdictions from Alaska to Virginia. The sites plan to use the outcomes-based tool to reduce homelessness, improve maternal and child health, strengthen low-income families, and promote economic mobility for the un- and under-employed.

And in February of this year, we launched an outcomes rate card pilot with our Connecticut partners. Through the pilot, the Connecticut Office of Early Childhood will make bonus payments to Maternal, Infant, and Early Childhood Home Visiting (MEICHV) providers for each family that achieves critical outcomes for family stability and success. These include healthy births, safe children, family stability, and caregiver employment.

The MEICHV outcomes rate card is the first in a series of outcomes-based initiatives the Office of Early Childhood aims to implement across its portfolio. The pilot offers a creative way for the state to move toward outcome-based payments, by making adjustments to an existing set of service provider contracts. It creates opportunities to learn and serves as a catalyst to prepare providers and systems for an increasing focus on outcomes. Over the next twelve months of the pilot, we hope to learn:

• How providers can adjust in real-time the data they are collecting and reporting
• How to structure financial incentives to serve the hardest-to-reach populations
• How different programs perform across a set of standardized outcomes
• How to incorporate outcome and performance frameworks within state procurement procedures
• How reliably and accurately provider-reported data compares with administrative data
• How to strengthen links to administrative data sources across health, education, child welfare, and workforce systems

By answering these questions, the Office of Early Childhood can improve the implementation of the state’s home visiting programs and set itself up for continuous learning by improving the collection, reporting, and monitoring of data on key home visiting outcomes.

Social Finance and OEC have already taken important lessons from the pilot development process, which will support our continued efforts to build outcomes-based projects:

• Embrace a learning mindset: It’s important to embrace opportunities to learn—and encourage providers to adopt this mindset, too.
• Build on existing systems: The infrastructure of federal reporting requirements already associated with MIECHV-funded programs enabled a smooth transition to pilot.
• Involve all stakeholders (internal included!) early: Including the contracting and procurement team early in project development helped meet tight end-of-year contract deadlines.
• Celebrate incremental steps: Moving the system toward paying for outcomes can happen in steps—the bonus payments in the pilot help lay the groundwork for other outcomes-based payment structures.
• Be flexible at every stage: We have had to adapt to provider feedback both during development and during implementation—and this is part of the learning process.

We are excited about the growing momentum around outcomes rate cards. It is another tool in our toolkit for social innovation. It is another avenue for the pursuit of results for those experiencing homelessness, for job-seekers in search of meaningful, lasting employment, for families working to build the strongest foundations they can.