Meg Massey
Urban Institute
Outreach Manager, Pay for Success

Using hypothetical projects to talk about evidence

February 16, 2017 - 11:04am

How does evidence shape how stakeholders perceive the risks and benefits of pay for success (PFS) projects? Last Friday, the centrality of evidence to each stakeholder perspective was on display at “Pay for Success and Social Impact Finance 2.0,” a day long convening of students and experts hosted by the University of Virginia’s Pay for Success Lab.

Following foundational sessions on the risks and benefits of the model, attendees considered a hypothetical PFS project developed by MBA students at UVA’s Darden School of Business, which proposed conditional cash transfers (CCTs) as a PFS-financed intervention for low-income HIV-positive patients in D.C., where HIV/AIDS rates remain higher than the national average.

Research has shown that consistent antiretroviral treatment for at least a year significantly reduces the likelihood that an HIV-positive person will transmit the virus to others. In the example created by the students, a highly marginalized HIV-positive population in D.C. continued to have  low rates of viral suppression and higher rates of HIV transmission, largely because of behavioral and social barriers to coming to the clinic regularly for treatment. In this hypothetical project, the project stakeholders theorized that offering patients a substantial cash payment would incentivize them to visit the clinic for treatment because it would cover lost wages from time off work and/or associated transportation and child care costs.

Attendees were assigned a stakeholder role—service provider, intermediary, investor, and local government—and asked to consider the risks and benefits of the hypothetical project from that perspective.

The discussion that unfolded focused on the evidence underlying the chosen intervention:

  • Are CCTs the most effective way to incentivize patients living with HIV/AIDS to consistently visit the clinic for treatment?
  • Are there evidence-based interventions to more directly address either the challenges patients had in maintaining regular clinic visits, such as stable and affordable transportation, or the underlying causes of HIV transmission that may be prevalent in the community, such as substance abuse?
  • Are there enough caseworkers at the clinic who had been trained in the care model to ensure fidelity?
  • Is there enough evidence underlying this intervention that the D.C. government should fund it through traditional channels?
  • How would a rigorous evaluation integrate into a clinic setting?

These questions about the evidence base led to others about financial and reputational risk. In a panel discussion with Eric Letsinger of Quantified Ventures and Third Sector Capital senior fellow Jerry Croan after the case study, Urban’s Kelly Walsh expanded on the importance of evaluation in PFS projects—the building block of evidence—including the risk that an intervention with little evidence could pose to investors and how evidence can factor into pricing outcomes and other cost decisions made in PFS projects.

PFS is often described conceptually in terms of its focus on paying for outcomes and its ability to generate potential cost savings for government. Although those are certainly defining features of the model, the conference was able to use this hypothetical project to go deeper and illustrate how our understanding of those outcomes relies on rigorous evidence. 


Have a Pay for Success question? Ask our experts at PFSsupport@urban.org!

As an organization, the Urban Institute does not take positions on issues. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research. Photo via Shutterstock.