Payment by Results - A change of focus
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Transcript of Payment by Results - A change of focus
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Payment by Results:
a change of focus
15th February 2013
Fiona Sheil
NCVO Public Services Team
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VCS Grants and Contract Income 2000/1 - 2009/10
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Grants
Block Contracts
Preferred Provider Frameworks
Spot purchasing (eg Individual service Funds)
Payment by Results (inc Bonds)
Prime / sub models (often private VCS)
Consortia (SPV, hub and spoke)
http://www.ncvo-
vol.org.uk/commissioning/procurement_approach
es
Contract and Grant structures
http://www.ncvo-vol.org.uk/commissioning/procurement_approacheshttp://www.ncvo-vol.org.uk/commissioning/procurement_approacheshttp://www.ncvo-vol.org.uk/commissioning/procurement_approacheshttp://www.ncvo-vol.org.uk/commissioning/procurement_approacheshttp://www.ncvo-vol.org.uk/commissioning/procurement_approacheshttp://www.ncvo-vol.org.uk/commissioning/procurement_approacheshttp://www.ncvo-vol.org.uk/commissioning/procurement_approaches -
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PBR so Far
Health / mental health
DWP
MoJ Local Authorities
Social Impact Bonds
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The Theory
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Payment by Results Trajectory
Input
Output
Outcome
Traditional funding
assures only activity
Payment by impact
Payments made at specified points
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Purpose of PBR
1. Innovation / outcomes
2. Transparency
3. Risk
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The Models
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Payment Structures
Binary models:The provider has to achieve an absolute target. The model isbinary in the sense that there is an absolute yes/no distinction towhether they receive payment payment is not graded forachieving lesser results.
Frequency scheme:As opposed to the binary model. Rewards are staggered alongagreed frequency of results, with payments increasing as resultsincrease.
Hybrid grants / PbR model:This is a mixed model, where the cost of delivering a service isfunded, but additional payments are rewarded as bonuses ifadditional impacts are demonstrated at the end of a programme.
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a. smoking cessation
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Aims and Outcomes
Two aims Increase supply
Reduce health inequalities
Good: 23% increase in quit rates Innovation Diversity
Better data
Bad
Uncapped payments Lack of VCSE
Monitoring and data
Difficult and expensive
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Does it work for innovation?
What does the VCSE need for innovation?
Punitive or reward? Options to enter?
Does it encourage new behaviours: or using
evidenced-based practice?
Are commissioners really willing to allow you
to do what you want?
Regulatory pre-determination?
What about grants?
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b. troubled families
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Who and why?
a. Involved in crime or anti-social behaviour Eg 1+ 28yr old with proven offence in last 12 mths
b. Children not at school Eg 15% unauthorised absences across last 3 terms
c. Adult on out of work benefitsAll families meeting a-c should be included
d. Causing high cost to the public purse Local discretion filter
Eg Child on Child Protection Plan
Eg subject to frequent police call outs
Eg health problems
Eg under 18yrs old conceptions
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Funding Structure
40% of the cost to be awarded (primarily) on
PbR
Average interventions known to work are
estimated at 10k (inc based on FIPs) so 4k
is available per family
Attachment Fee (80% reducing to 40%)
So
PbR (20% rising to 60%) over 3 years
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Domains
are the outcomes on which payment is targeted
Variations in aggregations, populations, output or
outcome
Aggregations / Populations
- National or local
- Individual, family, community impact- Cohort or individual track
- Personal outcomes or specific interventions
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Domain Absolutes
Overarching outcome measured by:
1. What factors (domain absolutes) are key to
the overarching outcome?
2. Relevant distanced travelled measures?
3. What weighting is given to each domain?
4. Which provider is attributed?
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c. Peterborough Prison Social Impact Bond
P t b h P i S i l I t
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Peterborough Prison Social Impact
Bond
0
'Frequency' nature
of outcome metric
incentivises focus
on most prolific
offenders
'Cliff edge' payout
if minimum
performance
improvement
achieved
Baseline
performance
determined using
matched cohort
Maximum payout
capped
Reduction in
conviction events
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d. Work Programme, DWP
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The Work Programme
% population achieving Job Outcome payment
80 1000 4020 60
Attachment fee
Job Outcome
Sustainment
Incentive
Baseline
performance
debateable
Slope of line in
zone of expectedperformance
unlikely to be steep
enough
Outcomes
difficult to
attribute
Curve made up of
four different
payments quite
difficult to
understand
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Challenges
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Questions remaining
Gaming and perverse incentives
Risk arbitrage?
VCS business issues + social investment
Financial modelling: tariff models
Will it enable integrated commissioning?
Will it replace commissioning?
Scale?
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Issues for the VCS (1)
What is a result?
Who decides?
Do we know what an outcome is?
Impact on non-results?
Focus on the end, not the incremental support?
How is it measured? What is the impact of monitoring on the
provider?
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Issues for the VCS (2)
Impact on service users?
Creaming and parking?
Modifiable tariff systems?
Advocacy and empowerment?
Applicability to personalisation?
who should commission?
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Issues for the VCS (3)
Fair risk and reward?
Enough understanding of costs?
How do you understand your risks?
What happens to surplus and deficits?
Do commissioners understand the market?
Are there skills to support the market?
Understanding of social value?
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Resources
NCVO Public Services Team
Fiona Sheil [email protected]
0207 520 2411
www.ncvo-vol.org.uk/psdnetwork
http://www.ncvo-
vol.org.uk/commissioning/paymentbyresults
mailto:[email protected]://www.ncvo-vol.org.uk/psdnetworkhttp://www.ncvo-vol.org.uk/commissioning/paymentbyresultshttp://www.ncvo-vol.org.uk/commissioning/paymentbyresultshttp://www.ncvo-vol.org.uk/commissioning/paymentbyresultshttp://www.ncvo-vol.org.uk/commissioning/paymentbyresultshttp://www.ncvo-vol.org.uk/commissioning/paymentbyresultshttp://www.ncvo-vol.org.uk/commissioning/paymentbyresultshttp://www.ncvo-vol.org.uk/psdnetworkhttp://www.ncvo-vol.org.uk/psdnetworkhttp://www.ncvo-vol.org.uk/psdnetworkmailto:[email protected]:[email protected]:[email protected]
