The Pay for Success (PFS) model is continuously evolving and we learn something new from each community where it is being explored. Much remains to be seen, but it's worth noting an important milestone achieved by a PFS initiative in Massachusetts that aims to reduce chronic individual homelessness through the creation of supportive housing. The PFS partnership there has successfully placed over 250 individuals in stable, supportive housing, exceeding the minimum goal set for its first year and paving the way for cost savings in emergency rooms and inpatient care.
This PFS initiative is being implemented by the Massachusetts Alliance for Supportive Housing (MASH) for the Commonwealth of Massachusetts and it is providing supportive housing to long-term homeless individuals who would otherwise rely on costly crisis-care resources, enabling them instead to focus on their often complex health issues more effectively than would be the case if they are on the streets or in shelters. MASH is a partnership of the Massachusetts Housing & Shelter Alliance, United Way of Massachusetts Bay and Merrimack Valley, and CSH.
Under our partnership, supportive housing (affordable units + access to vital services) is being created through the PFS approach. PFS is a unique financing and contracting method that ties payment for service delivery to measurable results. In Massachusetts, the private and philanthropic sectors are partnering with government to cover the costs of the service. The initiative leverages a mix of philanthropic funding and private investor capital from United Way, Santander Bank and CSH to cover the upfront funding for social services. If the goals of the PFS initiative are met, the government compensates the investors for undertaking the investment risk. If the goals are not met, the government is not obligated to repay the investors one dime. An independent evaluator, Root Cause, will determine if the PFS initiative has achieved its goals.
According to Joe Finn, President & Executive Director of the Massachusetts Housing & Shelter Alliance, the preliminary data is suggesting housing chronically homeless individuals who are high utilizers of emergency care will have a significant impact. A comprehensive assessment of the individuals placed in permanent supportive housing this year through the PFS initiative found that in the six months prior to entering housing, the 250 individuals housed as of June 1, 2016, had accumulated:
• 18,917 nights in shelter
• 1,816 days in the hospital
• 541 emergency room visits
• 690 nights in detox treatment
The affordable housing itself should significantly reduce the rate of shelter use, and access to regular and preventive healthcare will decrease costly emergency room, hospital and detox visits. To that end, 200 of the 250 tenants in supportive housing have been enrolled in the MassHealth Pay for Success Community Support Program for People Experiencing Chronic Homelessness (CSPECH), an innovation of the Massachusetts Behavioral Health Partnership and the Massachusetts Housing & Shelter Alliance that is recognized nationally as a model for funding support services with Medicaid dollars. CSPECH has been expanded beyond the Massachusetts Behavioral Health Partnership to health plan providers across the Commonwealth showing the potential for Managed Care to play a critical role in scaling supportive housing to meet critical needs.
What is most impressive is the scope of providers the PFS initiative has attracted to the table, especially from the healthcare and managed care arenas. They have a stake in its success because they recognize we can reduce costs and improve the health of vulnerable people through the stability that comes with supportive housing.
Jeffery Hayward, Chief of External Affairs at United Way of Massachusetts Bay and Merrimack Valley, points out that this PFS initiative is creating supportive housing faster than would have been possible without the upfront private capital and philanthropic investment of the partnership.
Over six years, this PFS effort plans to provide at least 500 units of supportive housing for up to 800 individuals, which represents about half of the number of people currently experiencing chronic homelessness in the Commonwealth. That's really good news for those who want and need a place to call home and the services to keep them housed.
Other states and communities should closely follow the progress of this PFS initiative and consider replicating this public-private-philanthropic partnership committed to achieving meaningful results as quickly and efficiently as possible.