Braiding and blending: managing multiple funds to improve health

This blog series “Uniting funding streams for health and social innovation” is a collaboration between the Urban Institute’s Pay for Success Initiative (PFSI) and The Brookings Institution-hosted Braiding and Blending Working Group. Though not every post is focused on pay for success, the working group and this blog series aligns with the PFSI mission of researching and supporting innovative financing solutions to today’s most pressing challenges. This series highlights the research of experts in healthcare financing focused on creative approaches.

As health care spending in the US grows to keep pace with increasing costs and as health problems become more complex, innovations in health care finance must not only promote efficiency and expand access but also address social factors that negatively impact individuals’ health. As with the opioid crisis, potential solutions not only call for increased funding for effective addiction treatment but also require other supportive services like housing and mental health counseling to be effective and efficient.

Like pay for success (PFS), blending and braiding are finance strategies that facilitate coordination of health care and social services and aim to improve outcomes, promote efficiency, and encourage sustainability. To further explore the braiding and blending models, Pay for Success Perspectives will host a series of guest blogs from policy experts over the next few weeks. This series will also provide guidance for policymakers to use braiding and blending at the local, state, and federal levels.

Braiding and blending funding streams both aim to support a unified set of services or benefits to a group of people:

• Braiding coordinates two or more funding streams but maintains each funding stream’s connection back to its original source and therefore maintains any constraints on those funds. Expenses, management data, performance measures, and demographic and other reporting requirements can be tracked and attributed to the original funding streams.

• Blending, on the other hand, refers to the pooling of two or more funding sources into one funding stream. The funds become more flexible because they do not have to be tracked to the original source and generally do not have specific reporting requirements or constraints on how to use them. Blending is not as common as braiding because of restrictions around some government funding streams.

Education and early childcare organizations have been using blending and braiding at the local, state, and federal levels throughout the past decade to sustain or increase funding. This strategy allows providers to expand their programs—reaching more children and offering full-day programs—and improve the quality of their services. For example, the U.S. Department of Education Promise Neighborhoods program awards grants to local organizations to implement a place-based continuum of services, from cradle to career, supporting their academic achievement. The grantees are required to obtain matching funds from state or local governments and the private sector, creating braided funding streams to implement the program.

Similar to pay for success, braiding and blending can also address the wrong pockets problem—a situation in which one agency bears the cost of a program that results in less need or demand for services provided by another agency or service system—plus increase funding sustainability and scale up programs. In Colorado, Colorado’s Trauma Informed System of Care (COACT Colorado) blends revenue from several sources to fund a state and local data system across departments that promotes sustainable, comprehensive services for children and families with complex needs. Unlike pay for success, however, there is no evaluation requirement. Braiding and blending instead present challenges in administering different funding streams because of reporting requirements, which will be addressed later in this series.

What’s next in the series

• Later this week, Vinu Ilakkuvan and Anne De Biasi from Trust for America’s Health will outline methods that federal agencies can use to facilitate braiding of funding streams to improve health and social outcomes.
• Next week, Len Nichols of George Mason University and Lauren Taylor of Harvard Business School will share a new model with similar goals to pay for success, through which local stakeholders can contribute to collaborative solutions for social determinants of health deficits in their communities.
• Kathy Stack, former advisor at US Office of Management and Budget, and Matt Eldridge of the Urban Institute will explore federal funding streams that can be combined to support a comprehensive solution to the opioid epidemic.
• For state and local organizations who are interested in using flexible government funding, Vinu Ilakkuvan and Anne De Biasi will also summarize a new toolkit with concrete examples for what can be achieved on the state and local level with braiding and blending.
• Ann Flagg and Christina Becker from the American Public Human Services Association will explore federal strategies for using administrative data across the US Department of Health and Human Services, Administration for Children and Families, the Supplemental Nutrition Assistance Program, and Medicaid.
• Stuart Butler and Marcela Cabello of The Brookings Institution will analyze the wrong pockets problem to address challenges facing those looking to braid and blend.

Have a Pay for Success question? Ask our experts here!

The views expressed in the series are those of the authors; as an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research. Photo via Shutterstock.