Funded for early childhood services from 2019-2024
Social Finance partnered with First Steps Kent, a nonprofit in Kent County, Michigan, to build outcomes-based financing for early childhood services in home visiting and environmental health as part of the county’s “Ready by Five Early Childhood Millage” initiative. The program is using net-new dollars from property taxes to fund around $34 million in services from 2019 to 2024, of which $6M was used in outcomes-based contracts.
Goals
Decrease disparities along racial and socioeconomic lines for all young children receiving referrals for developmental concerns and testing for high blood lead levels.
Incentivize the measurement of provider performance.
Increase access to lead poisoning tests and early childhood programs.
The Work
Social Finance developed two outcomes rate cards (ORCs) funded by Kent County’s “Ready by Five Early Childhood Millage” initiative. The ORCs directed property tax dollars to support early childhood services. An ORC is a menu of outcomes that defines how much a government is willing to pay each time that a positive outcome is achieved. Social Finance assisted in the following processes:
Needs analysis: Conducted secondary research and service provider interviews to understand early childhood services in Kent County.
ORC development for RFPs: Created an outcomes-based structure in which service providers could receive payments, in addition to fee-for-service contracts, if metrics were achieved in year one. In year two, service providers could either maintain that structure or opt for another structure to receive additional funding if outcomes were achieved.
Embedded outcomes-based structure into two RFPs: Two RFPs, home visiting and healthy development and healthy and safe home programming, included ORC metrics, such as engagement of families with low income, developmental screening, and environmental screening.
Final ORC pricing: Priced each metric based on value and expected performance for awarded contracts.
Early implementation support: Developed a preliminary data collection and analysis plan for First Steps Kent to validate outcome achievement.
The outcomes rate card has offered us the opportunity to identify meaningful performance metrics as we build data use capacity in our service provider network.
Heather Boswell
Vice President, First Steps Kent
The Results
Piloted and supported the implementation of an outcomes-based contracting approach in Michigan using a flexible funding source; created a low-risk, optional structure with only a small percentage of fee-for-service funding contingent on outcomes.
10+Supported First Steps Kent in selecting 10+ home visiting and environmental health providers for 22-month contracts
$6MDeveloped two outcomes-based contracts for the Ready by Five Initiative, totaling $4.6 million for home visiting providers and $1.4 million for environmental health providers
![Toddler sits on the ground and holds baby sitting in toddler's lap.](https://socialfinance.org/wp-content/uploads/2021/10/chayene-rafaela-nGwkIZFelko-unsplash-scaled-1-1000x667.jpg")
