By Joe Waters, Guest Columnist
When Gov. Nikki Haley launched a pay-for-success initiative focused on improving outcomes for mothers and children living in poverty, South Carolina joined a growing list of states using this new approach to solve their social problems.
Backed by $30 million in public and private funds, the pay-for-success effort expands the proven nurse-family partnership — which provides maternal-health training — to 3,200 first-time mothers and their babies.
This will make a sizable impact on improving life outcomes for some of the 280,000 low-income children in the state. It also gives South Carolina an opportunity to demonstrate what’s possible through the pay-for-success model, one of about a dozen in the country.
Through pay for success, private funders cover the upfront cost of a program, typically delivered by a nonprofit, that is designed to improve social outcomes. If the program yields positive results measured through rigorous third-party evaluations, government picks up part or all of the project cost. If the program doesn’t meet its benchmarks, the original investors shoulder the cost — allowing government to focus its investments on social-services efforts that prove their effectiveness.
The Department of Health and Human Services will lead the S.C. effort, which is supported by $13 million in Medicaid funding and $17 million from the Duke Endowment, BlueCross Blue Shield of South Carolina Foundation, Boeing and other foundations and philanthropists. External evaluators will measure the program’s performance against its promised results of reducing preterm births, cutting children’s hospitalization and emergency room use, increasing mothers’ time between births and growing the number of low-income mothers served. If the program achieves those goals, South Carolina will contribute 100 percent of the success payments to the nurse-family partnership to continue expanding the service to more families.
The nurse-family partnership was founded on brain research about the importance of early development. It pairs at-risk mothers with specially trained nurses who provide home visits and counsel on pre- and post-natal care. In randomized trials, it has proven to produce better pregnancy outcomes, better prepared students and mothers who are better equipped for self-sufficiency.
The Institute for Child Success has been a proponent of pay-for-success financing for years. With support from the Duke Endowment, the Doris Duke Charitable Foundation and the S.C. Department of Health and Human Services, we helped convene a statewide working group on early childhood pay for success in 2013 and analyzed the feasibility of expanding the nurse-family partnership using pay-for-success financing. This analysis helped pave the way for the program implementation and move South Carolina closer to our overall vision: the success of all young children.
In a presidential campaign cycle filled with heated discourse over what’s not working in Washington, cross-sector partnerships such as these remind us of what does work: supporting effective programs that measurably improve people’s lives, that increase government efficiency and that are based on measurable results.
South Carolina’s model, in particular, serves as a compelling example of how government can work well: by producing outcomes that benefit residents in need of support, thereby generating value for all taxpayers through greater return on public investment.
At a time of cash-strapped budgets and disputes over government’s effectiveness, this offers an inspiring example of policy solutions that work for building a better future.
Mr. Waters is vice-president of the Greenville-based Institute for Child Success; contact him at email@example.com.