Advancing Child Health in Michigan

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.