Embed Size (px)
Citation preview
B11: Payment by results – making it work
Speakers: Fiona Kirkman
Prevention and Inclusions Manager London Borough of Lewisham Andy Meakin
Senior Manager Cheshire West and Chester Council
Lara Newson
Economic Advisor, Social Investment Department for Work and Pensions Chair: Jake Eliot
Policy Lead for Care and Support National Housing Federation
Payments by Results – Making it Work
Housing Care and Support Conference
2 - 3 July 2012
Fiona Kirkman
Prevention and Inclusion Manager
Lewisham Council
Payment by Results – Making it work
Payment By Results What we will cover:
• Financial incentive models in the public
sector
• Lewisham experience
• PBR in Supported Housing
• Questions and discussion
Payment by results – Making it work
• ‘Open Public Services’ White Paper – Commitment to
increase the use of financial incentive models in public
services.
• Why PBR? Mechanism to incentivise system to focus on
desired output/outcome rather than process
• In future, they will become an increasingly important part of
the funding landscape.
• Terminology. Move away from FIM to PbR. Definition
depends on type of result to be achieved/measured and
transfer of risk and possible reward associated with
delivery.
Payment by Results – Making it work
Background and context
• National PBR contracts being run in various areas:
• Work Programme
• Drug rehabilitation pilots
• Reducing offending pilots
• Long-term health conditions pilots
• SP pilots
• Complex families pilots
• Looked After Children pilots
Payment by Results
• In Lewisham, incorporating financial incentives into contact design is a relatively well established practice and predates use of term Payment by Results.
• Example: Drug Treatment contract where a proportion of the contract is held back to reward quality and performance.
• Example: Pilots based on outcome measures and family budgets. Provider has greater flexibility in how to deliver the service and opportunity for increased financial reward.
Payment by Results in SP
What do we mean by “results”?
Cabinet Office suggest following criteria for
defining results:
1. Measurable
2. Accurate
3. Simple
4. Relevant
5. Avoids perverse incentives
6. Linked to cashable benefits
Justice Reinvestment Model
Justice reinvestment model – Lewisham 2010/11
The proposed model has four components:
• Reduce re-offending by addressing offender behaviour
• Improve compliance with court orders (community orders,
suspended sentences and payment of fines)
• Divert people from the court system where appropriate to
do so
• Introduce design/physical features that help to prevent
crime
Justice Reinvestment Model
Local application of Justice Reinvestment Model
Commissioning of Third Sector reducing re-offending service:
• Purpose is to “disrupt” the current system
• Service is tasked to deliver reduced re-offending by concentrating on offenders motivated to change behaviour:
– Through the Gate service for ex-prisoners
– Range of housing, substance misuse, ETE solutions as needed for range of offenders
– Capacity to offer bespoke and personalised solutions
• Looking for flexibility, innovation and fresh ideas from service
• Mixture of up-front payment and payment by results
Payment by Results in SP
National context:
• SP Pilot being run by DCLG
• 10 LAs involved in pilot
• Variety of approaches being used: “results” metrics include
outcomes stars, ECM outcomes, QAF scores
• DCLG keen to test different approaches
• Evaluation by Ekosgen – in depth evaluation and progress
assessment
Payment by Results in SP
Supporting People Pilots
• LB Lewisham interested in PBR contracts in range of areas
• LB Lewisham one of 10 SP pilots
• Interested in using PBR in commissioning new services
• Interested in applying PBR to current contracts by agreement with
providers
• In Lewisham we wanted to apply lessons learnt from previous
PBR contracts:
• Where PBR used focus on small number of strategic outcomes
• Use Cabinet Office tests to set results metrics
• PBR not appropriate for all services e.g.. if meaningful metrics do not
exist
Lewisham SP PbR Pilots
3 Pilot SP schemes
• Hostel Diversion Project
• A&E Diversion Project
• Young Persons’ Assessment Centre
Payment By Results SP Assessment Centre
Young Persons’ Assessment Centre
• Service to provide short-term assessment function for
young people. Delivered by Centrepoint.
• New Service is remodelling of 3 existing services
• These services are currently based at 3 sites providing an
overall capacity of 30 assessment units.
• Payment based on young people moving into the centre,
successfully resettled at two thresholds.
Payment by Results in SP
PBR model for Assessment Centre 1. Contract price split between fixed and PbR
2. Fixed price to be hourly rate x no of hours required
3. PbR to be based on three metrics
a. Nos of young people accepted by the assessment centre
b. Nos of young people successfully resettled by the assessment
centre (based on reports by landlords 6 months post resettlement)
c. Nos of young people successfully resettled by the assessment
centre into lower support accommodation than predicted
4. Tenderers to give unit price per metric
5. Tenders to be assessed both on total price and % that is
PbR based
Payment by Results – A&E Diversion
A&E Diversion Project
• An innovative response to engage and improve
the health and wellbeing of repeat frequent and
persistent users of emergency services.
• A cohort of patients identified who are over
utilising emergency services and A&E.
• Referrals into the short term intensive support
service delivered by Thamesreach will be received
via the GP surgery.
• Metrics measured through PCT/A&E.
Payment by Results – Hostel Diversion Project
Hostel Diversion Project – Pilot
• This client group would normally meet criteria for referral into the hostel system, but hostel may not the most appropriate solution.
• The project offers alternative accommodation in the Private Rented Sector. The project also acts as move on for individuals living in supported housing properties.
• A target group has been identified from people placed from April 1st 2011 onwards. This will be an initial cohort of about 30 placements to be evaluated at “Go Live Plus 6 months”.
• Every quarter all groups will be evaluated and payments will be made based on the percentage of people still retaining their tenancy for the relevant periods.
• Key to the financial success of the project is that Landlords are paid two months rent in advance. For clients receiving full benefit, once LHA is awarded, the first two months payment is then ‘re-cycled’ back into a float. This means that for a given rate of sign-ups, there is always money available to keep the scheme operational.
• The Pilot to be fully reviewed 6 months into the project and targets/objectives to be adjusted if appropriate.
Learning so far
Lessons
• PBR will not be appropriate for every service area.
Need to establish measures that are as close to
the service objectives as possible.
• Principles of sound commissioning remain the
same, whether contracting on a PbR basis or not.
• Market development.
• Commissioning considerations.
• Provider considerations.
Payment by Results Making it Work
in Supported Housing
Andy Meakin Senior Manager
Supplier Management
Cheshire West and Chester Council
01244 973317
07789 922670
Contents
• Shifting commissioning emphasis
• Local context for Cheshire West project
• Identifying performance indicators
• Lessons from the PBR pilot
Payment by results
• Cheshire West and Chester Council
• A pilot Local Authority
• Payment by results in Supporting People
• 1 of 10
Shifting emphasis
• Input based commissioning
• Specification defines inputs and process
• Monitoring emphasises inputs and process; e.g.
– staffing, utilisation, availability, quality
• Performance is defined in terms of compliance
• Payments not directly related to performance
• Assumes inputs necessarily deliver desired outcomes
• Assumes that this is resilient to changes in the environment
Shifting emphasis
• Results based commissioning • Specification defines outcomes and constraints
– Outcomes defined in numerical terms
– Constraints include financial, legal (e.g. statutory duty), geographical,
or regulatory considerations (e.g. quality standards)
• Supplier designs the service inputs within the constraints
• Performance is defined in terms of outcomes
• Payment directly related to performance
• Assumes flexibility of inputs and process key to maximising
outcomes
• Assumes performance can be measured numerically
Local context for PBR pilot
• Services for acutely homeless people
– Street outreach
– Night shelter
– Hostel
– Move-on accommodation
– Resettlement floating support
– Male only and female only services
Local context for PBR pilot
• Strategic review identified
– Barriers to accessing service • High needs, couples, people with pets, etc
– Small number of hard to engage entrenched rough sleepers
– Service users felt that they stayed too long in services and there were too many stages to their journey
– Service users aspired to improved accommodation (e.g. en suite facilities)
– Service users emphasised their aspirations for education, training, employment, and volunteering as well as permanent accommodation
Traditional linear model
ROUGH
SLEEPING
NIGHT
SHELTER
HOSTEL MOVE-ON
ACCOMMO
DATION
RESETTLE
MENT
FLOATING
SUPPORT
KPI KPI KPI KPI KPI
Positive outcome
Negative outcome
Performance measurement point
Entrenched rough sleeping
Results-based model
ROUGH
SLEEPING
£KPI
Positive outcome
Negative outcome
Performance payments relative to impact
Entrenched rough sleeping
£KPI
Performance payments relative to progress
INDEPENDENCE +’ve £ -‘ve £
OTHER POSITIVE SOLUTIONS
OTHER NEGATIVE OUTCOMES £KPI
ACCOMMODATION-BASED
FLOATING SUPPORT
Identifying performance indicators
• Considerations
– Ensuring a realistic target
– Avoidance of gaming behaviour
– Avoidance of perverse incentives
– A basis on measurable indicators
– A basis on auditable indicators
– Promotion of outcomes valued by customers
Identifying performance indicators
• Direct measures
– Measured and reported directly by the supplier
– Audited periodically by the commissioning organisation
– E.g. people moving-on in a planned way
• Proxy measures
– Measured indirectly and reported by the commissioning organisation
– E.g. people sustaining independence as measured by client not
re-presenting to the commissioning organisation for services
Identifying performance indicators
• Impacts (long-term effect of service)
– Move-on (measured directly)
– Sustaining move-on (measured by proxy)
– Sustaining re-connection (measured by proxy)
– Sustaining education, training, employment, volunteering (measured directly)
• Outcomes and results (shorter-term effect of service)
– Using the Outcomes StarTM
– Average progress of all customers in a period (measured directly)
Outcomes StarTM
• Ladder of change
– Clients entering service at the lower end of the
ladder have the greatest potential to influence
average progress
– Clients towards the top of the ladder
have the least potential to influence
average progress
– Combats cherry picking
– Promotes move-on
Identifying performance indicators
• Involving providers is essential
• We used a competitive dialogue procedure
Identifying performance indicators
• We did this by
– Initially using a critical friend as a proxy provider
– Developing an initial outline model
– Developing the model further through dialogue sessions
– Finalising the model, measures, and audit evidence
– Limiting the number of measures
Lessons learned
• Involving stakeholders is invaluable
• Involving suppliers is invaluable
• Carefully consider the balance between
– Activity based vs. results-based payments
– Share the risk don’t off-load it
Lessons learned
• Set out the inputs and resources as constraints
– Finances, quality standards, etc
• Be prepared to change the initial model
• Involve legal, finance, and procurement
• Don’t underestimate the time needed
So far…
• Preferred supplier selected
• Mobilisation underway
• Premises identified
• Consultation with residents
• Refurbishment of premises (c. £400k)
• Savings against current arrangements
