Santa Clara County unveils ‘Pay for Success’ mental health plan (Mercury News)

By ERIC KURHI | ekurhi@bayareanewsgroup.com

More than a year ago, Santa Clara County embarked on its first “Pay for Success” project — a partnership geared toward permanently sheltering chronically homeless people — and Tuesday officials approved a similar plan to help those with severe mental disorders.

“Partners in Wellness” is a plan aimed at getting 250 mentally ill people who use county services into more intensive outpatient care. The goal is to actually save money in the long-term by helping mentally ill people stay out of emergency rooms and jails. County officials said it’s the first such Pay for Success plan geared toward mental health issues in the nation.

“We are very pleased with the preliminary results seen in our first Pay for Success program,” said Greta Hansen of the county counsel’s office. “This builds on that great work to ensure that some of the neediest patients receive great services while improving the system for all.”

The six-year, $30 million plan — officials said $17 million will be reimbursed by Medi-Cal — will be monitored by a Stanford University specialist in mental health treatment. Dr. Keith Humphreys will evaluate the program based on whether the program results in a drop in emergency, inpatient, contracted psychiatric services and jail time, and compare the results with a control group of patients.

“People in the control group will receive all the services the county currently provides to severely mentally ill patients, while those enrolled in the new plan will get additional services,” said Hansen. “The evaluation will determine whether we see better outcomes than in existing care.”

Hansen said those expanded services will include housing, intensive case management, intensive mental health evaluations and a wide array of additional services and support.”

Humphreys said adding incentives to government-provided services can increase their quality.

“People want the government to provide care, but they’re also frustrated with the care that government provides,” he said.

While the August 2015 jail beating death of mentally ill inmate Michael Tyree brought the issue of how to best handle residents suffering such afflictions to the fore, the movement to create a Pay for Success program predates that push, going back to 2013.

The Pay for Success model related to homeless services — called “Project Welcome Home” had an initial goal of getting 80 people off the streets and into longterm housing in a partnership with Abode Services.

Louis Chicoine, director of Abode, said they have 112 people in the program right now, with 1,052 months of stable housing logged. He said most people who get in the program have stuck with it.

At the inception of the project in August 2015, the county’s stated goal was  to provide 6,900 months of stable tenancy over the six years. While that averages to 1,150 a year, the Pay for Success schedule takes into account the ramp-up process to get the project running, and Chicoine said they’re about 5 percent ahead of the benchmark at this point.

“We’ve got a very high success rate — 90 percent of our clients are staying in housing,” Chicoine said.

That plan partnered with private entities that invested an initial $6.9 million to meet those goals, which if met would be paid for by up to $8 million in taxpayer funds.

“That means that in a typical project, the investors, not the government bear the risk of under-performance by a service provider,” reads the county report on Partners in Wellness. But that inclusion of investors makes a plan more complicated to put together and a different model is being used for the county’s second Pay for Success plan.

The Partners in Wellness plan did not solicit private investment, but instead uses a system that puts risk on the service provider, which in this case is Telecare, a mental health care specialist involved in 90 programs across nine states. The staff report says the county has “negotiated aggressive success metrics that require Telecare to achieve a high level of success.” Tying payments to those benchmarks allows for the county to cut the contract if minimum standards are not met.

Humphreys said that in his “arms-length” evaluation he won’t be “cheerleading for it working or cheerleading for it failing.”

“I’m there to find out what the answer is, and don’t presume what the outcome will be,” he said. “As a person, I hope it results in better services but if it doesn’t work I’ll tell the county that it’s bad for patients or a waste of money.”