Public Sector Client

First Steps Kent

Years

2019-2020

The Challenge

Social Finance supported 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. They aim to:

  • 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;
  • And increase access to lead poisoning tests and early childhood programs.

“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 Work

Social Finance developed two outcomes rate cards (ORCs) funded by the 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 low-income families, 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 Results

  • Supported First Steps Kent in selecting 10+ home visiting and environmental health providers for 22-month contracts.
  • Developed 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.
  • 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.

Contact Us

If you are interested in learning more about our advisory work, contact Managing Director Jeff Shumway or Vice President Jake Segal.