Innovation in government to achieve results

With a new year comes new opportunities. When the 114th Congress is sworn in next month, policymakers will have a huge opportunity to demonstrate how government can be more innovative and achieve real results for all Americans. It is time to move beyond partisan debate to a shared conversation on new ideas that can have impact at scale. 

To be a truly effective steward of taxpayer resources, Congress should change the way government does business. Currently, the U.S. spends billions of dollars on social programs focused on compliance and administration rather than the attainment of measurable results. What if we paid for the outcomes we wanted to accomplish rather than the number of people served? 

{mosads}Today, the nation’s high school dropout rate for 18-to-24 year olds is at 7 percent—the lowest we have seen since 2000; imagine if we were to eliminate it altogether? Similarly, what if we could decrease rates of recidivism? What if we could lower the number of childhood asthma-related emergency room visits, or dramatically reduce the rate of diabetes growth? Governments are applying this approach to produce real results, and these models offer some important lessons on how to design policy for impact. 

Georgetown University’s Beeck Center for Social Impact and Innovation recently released a report entitled Funding for Results: A Review of Government Outcomes-Based Agreements. This report explores how government can create programs and award funding to pay for desired outcomes. What does this mean? It means paying providers for placing job seekers in sustainable employment, not for job training. It means rewarding providers that deliver improved health outcomes for the whole patient, not for individual units of service. Paying for results ensures public funds are managed properly without losing sight of the primary goal of improving society. 

At state and local levels here in the U.S. and around the world, outcomes-based agreements are redefining government funding. Under these programs, governments pay for the realization of measurable outcomes rather than for services rendered. By paying for results, these governments have increased efficiency and significantly lowered costs, creating more fiscally sustainable models for delivering essential social services. 

The Beeck Center’s report is a vital resource for government leaders seeking to create innovative social service programs with maximum impact. Funding for Results details five case studies from within the U.S. and around the world, drawing common lessons on HOW governments can pay for outcomes, and providing recommendations and guidelines for designing these types of programs. Two of the examples have already found success in the United States: 

• The Tennessee Department of Children’s Services uses Performance Based Contracts to reach one clear goal: moving children into permanent homes more quickly. Evidence shows that children who remain in the foster care system until adulthood have higher rates of homelessness, unemployment, and poverty. Tennessee rewarded providers that improved performance and penalized those that performed below the baseline. As a result, the state has nearly cut in half the average time a child spends in temporary care, from over 22 months to just 14. 

• Three states—Colorado, Oregon, and Minnesota—have reduced costs and enhanced quality of care for Medicaid beneficiaries by implementing Accountable Care Organizations (ACOs). ACOs are networks of doctors and hospitals that share financial and medical responsibility for providing coordinated care to patients. These states limit unnecessary spending by creating incentives that pay ACOs for the quality of healthcare outcomes, rather than for the number of services provided or people served. Early results show that Medicaid ACOs in these states are helping control costs and vastly improving care delivery. 

If government wants to successfully reform programs to achieve better outcomes, it will need to do at least three things differently: (1) negotiate with funding recipients and manage stakeholder relationships; (2) develop clear outcomes and incentives; and (3) measure and evaluate provider performance. There is no single approach for designing these types of systems. Instead, the report provides a framework and a set of design choices policymakers need to consider when implementing these results-oriented programs. 

There is a fundamental shift taking places in communities, cities, and states across the country and around the world. Governments are looking to drive impact and harness the energy around paying for what works. There are many new models that are already being tested, including the Innovation Funds, Pay for Success Pilots, Performance Partnership Pilots, and Pay for Performance measures in the Workforce Innovation and Opportunity Act. 

The new Congress has an opportunity to transform government and shift how we think about solving our nation’s greatest challenges. The urgency is clear: continued government funding via traditional approaches is not only poor stewardship of taxpayer dollars, but also socially irresponsible. Budget cuts driven by inefficiency disproportionately affect the most vulnerable members of our society and further add to the burden those populations face. Congress can seize this critical moment to implement a roadmap for change. There is a long way to go toward solving the problems in our country, but with the right tools we can achieve real, tangible results. 

Shah is the executive director of Georgetown University’s Beeck Center for Social Impact & Innovation. She previously served as director of the White House’s Office of Social Innovation and Civic Participation before joining the faculty of Georgetown University. Urquilla is the deputy director of Georgetown University’s Beeck Center for Social Impact & Innovation. She previously served as senior policy adviser in of the White House’s Office of Social Innovation and Civic Participation. The full report is available at http://www.driveimpact.org/report/