How can we encourage greater investment in prevention?

Written by Jake Segal, vice president at Social Finance

Social Finance
Oct 23 · 13 min read

In a previous piece, “Why don’t we fund more prevention?,” we unpacked some of the biggest barriers to investing in prevention — including uncertainty, accountability, urgency, and the wrong pockets problem.

That said, trailblazers have been able to break through these barriers. Public and private health leaders’ embrace of value-based payment is slowly transforming which health services are delivered and when. States and counties are experimenting with outcomes-based contracting, focusing on everything from healthy birth outcomes to recidivism reduction and are leveraging strategies that cultivate measurable and sustainable prevention.

California is a leader in government effectiveness. But as we enter a new phase of progress — investing in social determinants of health; ensuring that equity is at the heart of our strategies; re-imagining pathways to economic mobility — there’s greater urgency to think long-term, break silos, and get the most out of taxpayer spending. While this is challenging, during our interviews with California policymakers, we heard dozens of ideas about how to make progress on the systemic drag slowing greater investment in prevention.

These ideas are summarized below; they focus on deepening inter-agency collaboration; strengthening goal-setting practices; accelerating data sharing for the public good; using clearer and more accurate messaging when describing prevention; strengthening leadership development and training; and investing more in tools and forums needed to support sophisticated applied policy research.

Mechanisms for inter-agency collaboration

The State of California employs more than 235,000 people across dozens of agencies. Each of these agencies makes independent decisions regarding its priorities and funding streams. While this approach makes sense for issues sequestered to specific policy silos, it fails to facilitate the kind of interagency collaboration needed to address expansive concerns that touch multiple departments and funding streams.

Amplifying cross-agency discussions and networking.Too often, employees working at different agencies tackle similar problems with comparable target populations, yet have no visibility into each other’s efforts. With modest adjustments, agency professionals from two or more departments could work together to address shared policy priorities.
Some platforms for this kind of cross-agency work already exist. The California Health in All Policies (HiAP) Task Force, for example, brings together governmental leaders around common public health issues.

However, many efforts like this lack the necessary staff, funding, or authority at the staff level to be as impactful as possible. We need more, and more empowered, groups to encourage collaboration.

“Having a table where everyone can come together helps us all speak the same language,” a California philanthropist told us.

After all, “language is part of the problem,” one county health official added. “We speak past each other.”

[1] Public and private partners in California should support, sustain, and expand intra-governmental platforms of collaboration and discussion like HiAP.

Silos aren’t only structural; they’re also cultural. Healthy informal employee relationships are key to cross-agency collaboration, as these social connections facilitate functional cooperation.

“Just getting people from different departments together for lunch to learn what everyone’s up to seems like a really good idea,” one mid-level state employee said.

[2] California foundations should build a joint philanthropic fund to support inter-agency lunches, briefings, and networking events that speed up the dissemination of operational best practices and ultimately break down persistent silos.

Building a library of cross-agency contracting tools. Cross-agency collaborations often lack the formality of contractual partnerships. As a result, few include deep financial partnership or joint accountability mechanisms. Formal partnerships, such as those defined by Memoranda of Understanding, interagency agreements, or contracts, can facilitate this brand of deep intradepartmental alignment.

For example, in our work building Pay for Success contracts, Social Finance has found that the process of creating legal documents that define key outcome metrics, evaluation plans, and funding partnerships sharpens the analysis and importance of each, resulting in more carefully derived partnerships. The Center for Health Care Strategies (CHCS) has likewise found formal partnership to be important to cross-agency success by supporting efficient data-sharing, decision-making, resource allocation, and project management.

[3]To support agencies in building more formal cross-agency financial partnerships centered on shared, long-term priorities, philanthropy can develop a compilation of contracting best practices, tools, and templates on which agencies can draw.

Funding cross-agency staff positions. Another strategy for breaking barriers between agencies involves cofunding staff members. For example, in 2018, Colorado created a Medicaid-funded public health liaison position as part of the Centers for Disease Control and Prevention’s (CDC) 6|18 Initiative. This role serves both the CDC and the Colorado Department of Health and Environment, helping each learn the other’s language, decision-making structure, and priorities, and navigating critical shared priorities.

[4]Where similar opportunities exist, California could jointly fund positions in areas with significant overlap, such as public health and health care, or even public health and transportation.

Exploring outcomes-based contracts. One of the central challenges hampering preventive programs is the notion that long-term preventative initiatives won’t pay off. Policymakers often don’t believe that proposed collaborations — those involving other agencies, jurisdictions, or nonprofit service providers — will produce the hoped-for result, and worry that they’ll be left with all of the costs and none of the benefits.

Outcomes-based contracts balance the collaborative equation by allowing governments to only pay for interventions if they work. This approach increases contract management sophistication, driving a more nuanced reading of evidence and risk, greater agility in using data for performance improvement, and carefully planned outcomes measurement and governance.

“What you pay for gets done,” one senior state health official explained. “If you pay for individual services, [vendors] will focus on those services. If you pay people for outcomes, they’re going to focus on achieving those outcomes.”

While dozens of states, including California, have begun pursuing this kind of contracting, it is still rare. In 2016, the state, working through the Board of State and Community Corrections, created one of the most effective Pay for Success incentive funds in the world, with a $5 million state match launching three county-level projects. This effort — and others like it — provides a blueprint for future efforts.

[5]Building on these initial successes, state agencies should proactively explore opportunities to build more outcomes-based contracts. As a first step, the state could develop a working group to support active efforts and sharing best practices.

Seeding the California Outcomes Fund. Agencies pursuing outcomes-based contracts often encounter challenges linked to value dispersion and the wrong-pockets problem.

Outcomes Funds are an important strategy to address these problems. Jurisdictions across the globe have begun to cultivate “Outcomes Funds” pools of funding specifically earmarked for outcomes-based contracts. The U.K. is home to four Outcomes Funds: the Innovation Fund (£30m) for youth workforce development; the Fair Chance Fund (£10m) for displaced youth; the Commissioning Better Outcomes Fund (£40m); and the Life Chances Fund (£80m) focused on upstream interventions outside the purview of a single jurisdiction.

Donor agencies are increasingly developing Outcomes Funds for global health and development, such as the $1 billion India Education Outcomes Fund, focusing on improving educational outcomes like school readiness and enrollment for children with special needs. Globally, at least five other Outcomes Funds are in development.

Here in the U.S., Congress recently passed the first federal-level Outcomes Fund: the Social Impact Partnerships to Pay for Results Act. Legislators enacted this bill as part of the Bipartisan Budget Act of 2018, allocating $100 million to launch state and local Pay for Success initiatives over a decade.

Outcomes Funds centralize expertise in results-based financing, leading to more effective and efficient contracting, outcomes-focused valuation, and negotiations, and better, faster vendor collaborations.

[6]California should build a pilot Outcomes Fund, beginning with $50 million, focused on a key state priority such as early childhood health and development, recidivism reduction, or homelessness.

The California Outcomes Fund would encourage cross-sector collaboration to tackle some of the state’s most ambitious goals — strengthening families, improving schools, building healthier communities — while embedding consistent feedback mechanisms into its funding allocations.

Multiyear, prospective goals

Defining goals is a central duty of executive leadership. Goals can act as guideposts, as statements of principle, or even inspiration. However, goals should do more: they should build accountability. To understand whether programs have succeeded, it’s important to set clear and thoughtful goals from the beginning, and a protocol by which their impact will be measured.

Matching goals against specific measurement plans and tools. Good organizational goals establish clear and measurable metrics. But measuring progress against those metrics can be challenging. Simple operational measures, such as the number of people engaged or the population-level outcomes achieved, often don’t reflect the performance of a given intervention or strategy. High-quality progress evaluation requires carefully segmented population targets, reasonable comparison groups, and even (at times) experimental or statistical controls.

[7] When agencies across California develop goals, they should ensure that there are clear measurement methodologies and thresholds identified to define success.

Using a multiyear approach. Though administrations changes, economic ups-and-downs influence governmental budgets, and priorities shift, California’s major social and economic challenges remain. Addressing climate change, chronic disease, poverty, and inequities are long-term challenges that require multi-year approaches and an understanding that outcomes may be achieved many years after interventions.

[8] While California agencies must remain flexible to changing political dynamics and public priorities, they could also employ more mechanisms for setting, communicating, and sticking to multiyear goals.

This strategy helps build consistency into decision making processes, and for service delivery partners, it helps to stabilize long-term planning and prioritization.

Creating incentives for success, scaled to ambition. Budgeting typically constrains goal-setting. But in the absence of accountability mechanisms, those goals may be either too ambitious (and therefore unrealistic) or too modest (and therefore un-inspirational).

[9] To encourage the right level of goal setting, California should consider developing agency-level incentive funds, where ambitious objectives could unlock greater potential prizes. Agencies would unlock additional funding by reaching their goals--and bolder goals would have correspondingly larger incentives.

Incentive pools could provide an additional push both to think realistically and to achieve major objectives.

Data-sharing

Widespread technological innovation has drastically increased data proliferation. There were 33 zettabytes of information, or enough data to fill more than 515 billion iPhones, circulating servers worldwide by the end of 2018.

Much of the information collected by governments is sensitive and requires thoughtful protection. Many data stewards feel as though they are sharing information to the best of their ability, given legal concerns and staff capacity. But we also heard frequent pain points.

Few resources exist to navigate data use agreements, and only the most skilled and persistent researchers are successful in accessing important public data sets. Most nonprofits learn to live without the administrative data needed to evaluate their own performance. Agencies that can see the value of greater data sharing are often caught, typically either by legal complexity or the time needed to iron out new agreements. To change this dynamic, new strategies are needed.

Building a data-sharing library. Some pathways toward lowering the barriers around appropriate data sharing are relatively straightforward. Few data owners publicize useful templates for sharing, or offer the resources needed to better understand dataset structures. Data sharing often feels like a game of Go Fish.

[10]Foundations interested in using technology to better serve the public could cultivate model data-sharing agreements for different kinds of protected information.[11] At the same time, state agencies could encourage transparency with the types and formats of data being collected by releasing data dictionaries, offering sample downloads for potential research partners, and defining clear access pathways and restrictions around data access.

Creating a national technical assistance hub for data sharing. Building data-use partnerships is partly a technical matter, but it’s largely about understanding and following the rules and best practices that govern protected data. For most protected data, these rules are byzantine, written in legalese, and widely misunderstood.

Dedicated technical assistance, in the model of the U.S. Department of Education’s Privacy Technical Assistance Center, can help researchers and operators learn more about the potential and limits of data sharing and help more of them take advantage of appropriate avenues to use those data for performance improvement.

[12] Philanthropists--perhaps in concert with research institutions--might consider joint efforts to help grantees and researchers take better advantage of data-sharing opportunities by funding a joint technical center of excellence, or simply by directly supporting state capacity to do this work.

Creating a national technical assistance hub for data sharing. Building data-use partnerships is partly a technical matter; but it’s largely about understanding and following the rules and best practices that govern protected data. For most protected data, these rules are byzantine, written in legalese, and widely misunderstood.

Dedicated technical assistance, in the model of the U.S. Department of Education’s Privacy Technical Assistance Center, can help researchers and operators learn more about the potential and limits of data sharing, and help more of them take advantage of appropriate avenues to use those data for performance improvement.

Messaging

As described above, prevention is hard to achieve for political, technical, and financial reasons. Another major barrier is that it’s difficult to talk about persuasively. Better, more timely messaging might strengthen the case for prevention.

Developing more compelling business cases. Prevention is often framed in grand terms that are not specific to a given decision maker. Wide-ranging social benefits can feel intangible, and so need to be narrowed to stakeholder-specific return-on-investment analyses.

[13] To build a better case for prevention, foundations and their grantees should work to frame their case more credibly in the priorities and values of specific agencies—finding ways for programs to help agencies do their jobs better, instead of asking agencies to change their priorities.

Identifying opportunities to shape the narrative. Policy and political science research suggest that strong communications strategies exploit “windows of opportunity,” moments in which advocates can shape the narrative by building on emotional reactions to current events. Many of these windows are unpredictable, but others — such as elections, or key moments on the legislative calendar — aren’t. Yet, nonprofits and advocates often miss critical windows of influence, often because they lack access to decision makers at the right moments.

[14] To facilitate stronger messaging, funders should attempt to identify key windows and create opportunities for their grantees to interact with policymakers during those times.

Leadership development

The social sector is changing rapidly. As the evidence-based policy movement continues to evolve, and novel forms of performance-focused contracting gain steam, public leaders need channels to learn about and test these ideas.

Creating new leadership training modules. An array of organizations have begun to fill gaps in the executive training landscape — highlighting compelling approaches from around the county; organizing covenings to bring together jurisdictions; creating webinars and podcasts focused on government effectiveness. But sizeable gaps remain, particularly in training public leaders on sophisticated new forms of contracting.

[15] To support such efforts, experts in the new tools of prevention, particularly practitioners of outcomes-based financing mechanisms, should build training modules to help spread those ideas.[16] California agencies should support executive- and manager level-leaders to attend trainings of this type to incorporate new best practices (such as Results-Based Accountability, Active Performance Management, and Pay for Success) into their strategies.

Applied policy research

The science and econometrics of prevention are complex. Making policy and spending decisions at the intersection of academic literature, cost-benefit modeling, and public contracting requires both experience and expertise.

Some states, notably Washington, have invested in centers of excellence to support their legislatures in making these complex decisions. California could build on those investments by cultivating an ecosystem that matches careful analysis with a governance system that engages agencies and legislators, and leverages national best practices.

The state could start working toward this reality by:

Establishing the California Applied Policy Research Center (CAPRC). The state could support its legislature by building academic partnerships to facilitate social program analysis. The CAPRC, modeled after the Washington State Institute for Public Policy, would work on a fee-for-service basis on behalf of the legislature and executive agencies, drawing on a wide set of state administrative data to identify effective interventions, conduct cost-benefit analyses, and guide state investments in prevention.

[17] State investment in analytic infrastructure would help maximize the value of public spending on social programs, tilting the balance toward smart prevention. [18] Philanthropy could provide the startup funding needed to coordinate data systems and build the infrastructure required to recruit top-tier staff for a research center.

Convening a California Inter-agency Valuation Forum. Investing in prevention presents a key technical challenge: valuing and pricing outcomes that are not inherently fiscal. Putting a price on social outcomes isn’t novel, yet it’s naturally complicated, rarely standardized, and often ignored.

[19]California could regularly bring together economists from across agencies to build an architecture of cross-departmental social outcomes and consensus price ranges that data agencies could use as they evaluate future policy.

Gathering a legislative forum on prevention. In-depth conversations about prevention require ongoing, reinforcing conversations about a diverse set of scientific and economic concepts, as well as innovations in care, contracting, and finance.

[20] To help California legislators with the latest thinking and best practices from the field, leading philanthropic organizations could support a working group—comprised of key legislators and supported by a rotating cast of experts—focused on prevention.

Devising a prevention analysis tool. It’s hard to know if investments in prevention will pay off. However, deep research, carefully defined assumptions, and thoughtful analysis improve the odds. Today, most analysis draws on past independent research, and occasionally external cost-benefit estimates; these analyses are rarely conducted on equal footing, instead relying on dissimilar assumptions and methods. It’s often hard to compare their results, meaning that they are of limited use to policymakers. Some web-based tools — like the Commonwealth Fund’s Return on Investment (ROI) Calculator for Partnerships to Address the Social Determinants of Health — have made inroads. But getting these tools right is an iterative, customer-oriented practice, that will require customizing the right level of inputs, so that the tools are detailed enough without setting up overwhelming barriers to use.

[21] To help simplify and standardize intervention assessments—and allow policymakers to compare potential investments and predict which will pay off—experts should develop an open-source prevention analysis tool. While just a starting point, an asset of this kind can add greater depth to legislative discussions on prevention investments.

While the barriers to funding prevention are imposing, they are not impassable. Innovations in contracting and delivery are demonstrating that we can achieve the value promised by prevention — that the right ounce today can still deliver a pound down the road. California is on the leading edge of sophisticated state policy-making. By doing more, to build formal cross-agency collaboration and experiment with paying for outcomes; to set forward-looking and measurable goals; to promote data sharing; to to train leaders in new tools of prevention; and to encourage sophisticated dialogue about prevention, California can accelerate further and faster in achieving the state’s ambitious policy goals.

Written by Jake Segal, a vice president at Social Finance, with support from associate director Annie Dear. This piece was developed through a grant from the Blue Shield of California Foundation, in partnership with the Public Health Institute and the Center for Health Care Strategies.

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