Veronica Gaitan
Urban Institute
Digital Communications Specialist

Why pay for success projects can take so long (and why they’re worth it)

October 26, 2017 - 2:49pm

Typically, pay for success (PFS) projects take a year or more just to launch, and another four to seven years for implementation and evaluation.

Once a site has identified a clear problem and decided that PFS is an appropriate tool, they can begin the planning phase, which includes problem identification, stakeholder engagement, examination of the evidence base, and project design. These first three stages of PFS often occur simultaneously; in a successful project, stakeholders work together from the outset. Groundwork for rigorous evaluations of project impact, one of the most critical elements in PFS, is laid in these early phases. Evaluation activities continue through the life of the project. 

  1. Problem identification:  Think through the largest problems your community faces, and where there are clear inefficiencies or gaps in services. Consider how PFS can address these challenges.
  2. Stakeholder engagement: Secure public, private, and nonprofit sector partners. Think about who the project aims to help, who will be paying for the services, who will be providing the services directly to the target population, and who will be evaluating the project. Involving evaluators from the beginning strengthens PFS projects and ensures a more streamlined evaluation process once the project has ended. 
  3. Examination of the evidence base: Analyze existing data on the identified problem and target population to assess the project’s scope and lay the groundwork for incorporating evidence throughout the lifetime of a project.
  4. Project design: Select an intervention with a strong evidence base, modify it for your target population, and select outcomes to measure project performance. 
  5. Implementation: Deliver services.
  6. Evaluation: Assess how well the intervention met your predetermined outcomes.

Each stage of a PFS project varies widely in length and between projects—with some taking nearly a decade to complete from start to finish. Why do they often last this long?

In other words, PFS projects should last at least long enough to deliver services and measure impact—requirements that can vary widely from project to project. For example, South Carolina’s Nurse-Family Partnership Pay for Success Program, which expands an existing program that serves first-time mothers on Medicaid, took two and a half years to set up, has a four-year service delivery period, a five-year repayment term, and a seven-year evaluation period. Though the program was already providing the intervention and had a strong evidence base upon inception, its complex Medicaid waiver is partially responsible for driving its long lifespan. Meanwhile, the Massachusetts Pathways to Economic Advancement project, which provides vocational English-language classes to immigrants and refugees, serves a smaller population and its service provider has been running similar training program for the past 15 years. This program is only expected to last about three years.

Is it worth it?

Pay for success is about reorienting government toward systems change in how services are procured and delivered—a process that is no small feat, and is the reason why it can take years. It addresses complex social problems and is about spurring lasting change. Benefits of this systems change include:

PFS projects address one of the most important and pressing public policy issues: government knows what it spends, not what it buys. If executed strategically, the outcomes and benefits of this investment model can be well worth the amount of time that goes into planning and implementation.   

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