Another Tool in the Toolbox: Pay for Success

Published Thursday, December 29, 2016 | by Katherine Klem

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Government leaders at all levels have the responsibility to ensure taxpayer dollars are spent wisely – that they get results for the American people.  

This is particularly important for public health and public safety issues, such as the ongoing opioid epidemic affecting communities across the country. In 2015, an average of 91 people per day died from overdoses involving opioids. 

It’s critical that we make sure we use our resources as effectively as possible to prevent opioid use disorders and to help people with this disease find recovery and live healthier lives. The Office of National Drug Control Policy is working with agencies across the Administration and with communities to move our country from crisis to recovery. 

Earlier this month, President Obama signed into law the 21st Century Cures Act, which provides $1 billion in new funding to states to address the opioid epidemic. This will help communities across the country, but we’ll need more resources to end this public health crisis. 

An Administration priority called Pay for Success can help close this gap. Pay for Success (PFS) is another tool for communities to use for addressing the epidemic. Today, ONDCP is releasing a Resource Guide to help states, cities, counties, and their partners learn about PFS as another tool in their toolbox. 

The PFS model allows government to only pay for success, such as a decrease in the rate of opioid overdoses in a county.  

Meanwhile, private investors – banks, charitable foundations, or even individuals – can provide any needed upfront funds for an organization to deliver services. In this way, government does not have to fund services upfront – a helpful advantage particularly in times of tight budgets. 

An independent evaluator then measures how well the services worked to achieve certain outcomes set out as goals by the community at the outset. And if the services achieved these goals, then government pays.  In cases where investors have provided upfront funds, the government repays the investors and provides a modest return.   However, if the services fall short of their goals, then taxpayer dollars are preserved.

Communities all across the country have used Pay for Success as a way of ensuring better value for taxpayers while expanding services where there is unmet need. The Obama Administration has provided support to communities as they have developed Pay for Success programs and even helped pay for outcomes.  ONDCP’s new Pay for Success Resource Guide:

•    provides an overview of the opioid epidemic;

•    offers a detailed explanation of PFS, its benefits, and its different forms;

•    describes the existing PFS projects and highlights the Obama Administration’s PFS efforts;

•    includes two case studies of how PFS is currently being used to help address substance use disorders, including opioid use disorders; and

•    suggests next steps for communities that are interested in pursuing the PFS model.

Through Pay for Success and other models, communities are gaining the tools they need to effectively address this issue. The Office of National Drug Control Policy is committed to ending the opioid epidemic and is a resource for communities working to move our country from crisis to recovery.