Under the Pay-for-Success model, taxpayers only pay for services if providers deliver improved results
Washington, D.C. - Ahead of a Senate Finance Committee hearing on evidence-based practices that can improve the social well-being for children and families across the country, Colorado U.S. Senator Michael Bennet is calling on the U.S. Senate to approve the bipartisan Social Impact Partnership Act. The bill, introduced by Bennet and Finance Committee Chairman Orrin Hatch (R-UT), aims to achieve better outcomes in social and public health programs while saving local and federal taxpayer money.
"Social impact partnerships empower state and local government officials to think outside the box to better deliver crucial services and save taxpayer dollars," Bennet said. "These agreements can help shift the current social services model to one where results matter and our already cash-strapped local governments are only paying for proven results. The Senate should pass our bipartisan bill to support investments in evidence-based programs that will help to improve outcomes in health care, education, job training, child care, homelessness, and a range of other government services."
The Social Impact Partnership Act directs resources to states and local communities to support innovative public-private partnerships in an effort to tackle social and public health challenges and establishes a new system for a smarter and more effective use of tax dollars. Under the Hatch-Bennet bill, the federal government would establish desired outcomes to pressing social problems that, if achieved, would improve lives and save taxpayer dollars. If the results are not achieved, taxpayers do not pay for the services. These arrangements are also known as social impact bonds or pay-for-success contracts.
Under a pay-for-success model, a government enters into an agreement with a service intermediary working to deliver a set of services that will ultimately result in positive outcomes, while also producing long-term savings to local, state, and federal governments. The savings will often accrue to a combination of those three levels of government.
Earlier this year, the City and County of Denver launched the Denver Social Impact Bond program to help hundreds of homeless people in the community. The program is investing funding from lenders to provide housing and case management services to at least 250 homeless individuals who regularly use the city's emergency services.
Text of Bennet's bill can be found here.