Pima County to lead Arizona's First Pay for Success Program
Pima County is working to implement a Pay for Success (PFS) program in Arizona and will lead the way among Arizona jurisdictions by continuously looking for innovative approaches to address social problems without placing financial burden on the taxpayer.
Pima County in partnership with the University of Utah’s Sorenson Impact Center have teamed up with the academic research institution to design a PFS program to be utilized over the course of 5 years with an expected launch of June 2018. In June 2016 Pima County and the University of Utah’s Sorenson Impact Center received $1.3 million dollars from the Department of Housing and Urban Development and the Department of Justice, (HUD-DOJ), to address homeless recidivism in Pima County.
Pima County will also be seeking support from non-government investors and non-profit service providers to set distinct, predetermined goals to be reached.
What is Pay for Success
Pay for Success, also known as Social Impact Bonds, is a social funding mechanism that allows local government agencies to identify a social problem that cannot be comprehensively addressed by either, using in-house services, or budgetary constraints. The PFS model stimulates the local economy by bringing in investment money for local service delivery to local residents.
A Knowledge Intermediary operates the project and works with the local government to identify the social issue, raise funding via Investors, select a capable Service Provider, and engage an independent Evaluator.
An Investor, private or non-profit, can fund a piece or the entire project and receive an agreed upon return if the program is successful. If the project is not successful in addressing the social issue then no reimbursement is made.
A Service Provider will be contracted to delivery services to the target population using the investors funding.
Final success payments will be made if and when an independent third party Evaluator reviews the project and determines if agreed upon deliverables were met.
How can Pay for Success Help
Nationwide, persons who are homeless have higher rates of incarceration, substance abuse, mental health issues, and are frequent users of emergency healthcare services. According to the Bureau of Justice, 64 percent of persons held in jails nationwide have at least one mental health issue. The PFS program will encompass evidence-based practices proven to help stop the “revolving door” of incarceration and homelessness by:
- Target population: frequent users of jail, behavioral health, and other crisis services
- Aim to reduce use of costly crisis services
- Increase collaboration and build on existing programs
- Implement evidence-based solutions
Pay for Success in Pima County
The process of understanding the Pay for Success model in Pima County started in 2014 when attending a Federal Reserve conference and being introduced to the new social funding. From the initial introduction Pima County has engaged with the Kresge Foundation, Tucson Electric Power, University of Utah Sorenson Impact Center and many others to identify a PFS project. These efforts led to a partnership with The Sorenson Impact Center focusing on reducing Homeless Recidivism.
In 2015, Pima County in conjunction with the Sorenson Impact Center completed a landscape scan of the current homeless count, services provided for this population, shelter and housing access, and organizations that work in the field. This lead to the application submission in June 2016, in partnership with Sorenson, to the Housing and Urban Development grant Request for Proposal regarding homeless recidivist with mental health issues. In July 2016 the grant application was successful and $1.3 million was awarded to implement a pay for success program in Pima County.
The Sorenson Impact Center, located within the University of Utah’s David Eccles School of Business, is an academic institution dedicated to developing cutting-edge approaches to solve complex social problems. The Sorenson Impact Center specializes in facilitating data-driven approaches to social service provision, including Pay for Success initiatives, which direct public and private investments to high quality, evidence-based programs that measurably improve the health and well-being of at-risk individuals.
The Sorenson Impact Center serves as the Project Intermediary for Pima County’s HUD-DOJ Pay for Success project, providing expert guidance on project design and implementation.
Target Population
The identified target population set out by the grant is homeless recidivists who have mental health issues. This population has traditionally been neglected and difficult to address because of the inconsistency of living arrangements and disinterest of interacting law enforcement. Homeless individuals frequently interact with emergency services, county services, law enforcement and others. The societal cost related to services provided to this target population is a burden that is passed onto the both the organizations doing this work and the residents of the area by way of taxes related to the city and county services.
Plans for the future
The County PFS program will incorporate two evidence-based practices: “Housing First” Permanent Supportive Housing (HFPSH) with the Forensic Assertive Community Treatment (FACT), an intensive outpatient treatment model that improves health outcomes for people with severe mental illness who are most vulnerable to homelessness and hospitalizations.
The PFS program also builds on other innovations and successes within Pima County, including the following programs and services, Drug Treatment Alternative to Prison Program (DTAP) in 2009, the construction of the Crisis Response Center and Behavioral Health Pavilion in 2011, the MacArthur Foundation Safety and Justice Challenge Grant in 2015, the Justice Health Information Data Exchange; the Justice Coordinating Council; and a current initiative to coordinate and expand Pretrial Services.