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The Bipartisan Budget Act of 2018 provides new authority for MIECHV awardees “to fund evidence-based home visiting on a pay for outcome basis.”1. Generally speaking, pay for outcomes (PFO) can refer to a range of strategies and financing methods that link government payments to improved outcomes and reduced costs. For example, in “pay for success” or “social impact bonds,” which are financing mechanisms that leverage private funding for the up-front costs of government services, nearly 100 percent of payments are contingent on those services achieving predetermined outcomes as demonstrated by rigorous evaluation.
To learn from past and current PFO projects in home visiting, the Administration for Children and Families (ACF), in partnership with the Health Resources & Services Administration (HRSA), contracted with the Urban Institute and ICF International to convene a group of about 50 home visiting and pay for outcomes stakeholders in a full-day roundtable event on January 10, 2019. This report presents major takeaways from that convening.
1 Bipartisan Budget Act of 2018, Pub. L. No. 115-123, 132 Stat. 64 (2018).
The five roundtable discussions followed the steps of a typical PFO project, centering on feasibility, structuring, implementation, funding, and evaluation. The report is structured similarly, but key insights on evaluation are integrated throughout. Further, because roundtable participants frequently discussed the importance of considering stakeholders’ motivations for initiating PFO projects, the report begins with a summary of key reasons that government agencies and other stakeholders might engage in PFO. The insights described here are drawn primarily from stakeholders’ remarks; additional context is provided as needed to explain PFO concepts.
Key Findings and Highlights
Given the PFO authority in MIECHV requires a feasibility assessment, which is typically the first step in a PFO project, roundtable participants discussed at length what a feasibility phase might look like for awardees. Participants said the feasibility phase is an opportunity to engage a range of key stakeholders, such as service providers, other government entities, evaluators, intermediary organizations, experts with data capacity, and families who receive home visiting services, to uncover potential barriers to project success.
If a PFO project is found feasible, the next step is usually structuring the project. This report outlines the two components of project structuring that were most commonly discussed during the roundtable—outcome selection and data systems assessment—and then reviews takeaways from attendees’ reflections on pilot phases and developing project contracts.
Finally, PFO projects can use a variety of funding models and sources, depending on factors such as the project’s goals, the end payor’s needs, political will, and government appropriations. A government entity might fund a PFO project on its own, or projects might braid government funding streams, such as MIECHV or Medicaid, with private funding sources such as foundation grants. The final section of the report summarizes key lessons and considerations for different funding models as discussed at the roundtable.
The report highlights major takeaways from a January 2019 convening of about 50 home visiting and pay for outcomes stakeholders. Participants included federal agency leaders and staff, state agency administrators, service providers, intermediaries, and evaluators.
Fudge, Keith, Katrina Ballard, and Madeline Brown. 2019. Funding Home Visiting with a Pay for Outcomes Approach. OPRE report #2019-70. Washington, DC: Office of Planning, Research, and Evaluation, Administration for Children and Families, US Department of Health and Human Services.
- Administration for Children and Families
- End Payor:
- The entity, usually a government agency, that repays the investors if a PFO project is successful.
- In the PFO context, an assessment of whether and to what degree the intervention in a PFO project has caused changes in population outcomes. Evaluations typically determine whether investors will be repaid.
- The person or firm charged with assessing whether and to what degree a project has had the desired impact.
- A formal inquiry regarding the prospective use of PFO that reviews several factors to decide whether and how to proceed with a PFO project.
- Health Resources & Services Administration
- Third parties that help stakeholders understand the research behind their target population or chosen intervention and translate that evidence into rigorous evaluations.
- A project phase that allows PFO project stakeholders to test out recommendations and assumptions from the feasibility stage to determine if stakeholders want to move forward with a project.
- Service Provider:
- The organization providing the intervention in a PFO project