Testimony Travis County Texas on Pay for Success 2016

Good morning, judge, commissioners, sherri fleming, health and human services and veterans service and i'll give a brief tee up while we're getting all our technology going here. In the fall of 2014, the commissioners court after receiving a presentation from the united way agreed to partner wit united way, mission capital, which was formerly green lights, the city of austin, and central health to seek out a -- or submit a grant proposal to their sector to participate in what we hoped would be a feasibility study around pay for success in austin travis county and so over -- and that request included $25,000 in financial resources as well as a commitment of staff participation in this process. So the court approved that, and over this last year staff from our department as well as many other departments in the county at different times, criminal justice planning, the auditor's office, the legal folks, many different partners within travis county, as we called upon them to look at this process have participated alongside our partners out in the community. So what we have for you today and we'll have the third sector folks introduce themselves, but what we'd like to do is have you hear the report of the work that has been done on the -- on looking atfeasibility for pay for success in austin and travis county. 10:23 AM Thank you, sherri. good morning, Judge Eckhardt and commissioners. I am rick edwards, partner at third sector capital partners, inc. , at of boston, and shh llbe intrusion herself shortly. Thank you for adding us to your agenda today, in this case about teen pregnancy pr vention in austin/travis county. For those of you who do not know third sector is a leading intermyriad advisory firm, a nonprofit. We are throughout the united states, we work with state, counuy and city governments to measurably change people's lives around outcome based contracting, outcome based services. You'll hear about the process when over 39 different national applicants applied for this development grant we chose austin, travis county, and what really impressed us honestly is that we not only saw an immense passion in this community around what sherri talks about pay for success, which is really at the way you're currently providing urgently needed social services and performance measures and outward based contracting but also in our experience in the last 11 months we've had a huge involvement in the community itself and we would not be where we are to be positively looking forwawd about in this particular case teenepregnancy prevention advancing without having support of the support of sherri, lawrence and many other members of thee community, rolling up their sleeves and literally getting involved in this process we've had this year. A quick note we are dropping you to today, to show you the passion in the community we are about t -- there's many issues this county is passionate about as well as the city, and so we're very excited to be participating about you. And I can tell you i've been around many c unties, other pl ces in this country and I would single out austin/travis county as being particularly innovative and desiring solutions. So we're very proud to be here today to give ou some results. There's many lessons -- we don't have time to go through the final report today but what we want to urge you to think positively forward is -- our development grant has run out. Do more research around the feasibility of advancing teen pregnancy presentation in austin ??? travis county. There's good data, there's good solutions out there. You're going tohear facts about our opportunity assessment. We met with shannon jones yesterday and at a minimum we can be talking about minimum based contracting with contractors in this community and as a goal of our program we could also be talking in another phase of taking you towards what we call a best intervention, teen pregnancy intervention project, a scaled project that brings in other outside funders and outside capital but can deliver even more impact in some of the programs that are going on right now. There's a spectrum, there's been good innovation done so far we urge to you continue with that. We want to leave team for questions, ask questions any time in this short time and channel your questions for how we can move forward and we'll try to be able to share some ideas with you. 10:27 AM Great. good morning, judge, commissioners. So before we get into the findings of our feasibility assessment, we've thought it would be valuable for you to hear how we got here today. So really travis county and the community more broadly has been interested in this pay for success concept as of 2013. And both mission capital and united way for greater austin, they took the leadership role in 2014 and built a task force, which included travis county, included central healing, mission capital, and leaders from local foundations. And one of the opportunities that came up bass third sector social innovation competition funded by the federal government via gradientn for the corporation from national and comounity service. So what -- because of that grant third sector launched a competition nationally to say, hey, we're interested in providing advisory services across communities in the united states who are interested in the fruition of this pay for success concept. And so as rick mentioned, because of the strong collaboration, the pay for success task force selected the city of austin health and human services department to be a lead applicant for this competition. And so [indiscernible] was that lead applicant with travis county mission capital, central health and united way as supporters and we were really impressed because of the strong collaboration and ended up providing them with -- and y'all with a developmental assistance award. Now what's important to say is that the health and human services department from the city identified teen pregnancy presentation as the social issue area for us to focus on so a lot of the findings are focused on that. But we're also going to be talking about lessons learned that could be expanded more broadly beyond the social issue area as the county and others explore workforce development and other -- in other areas of the community. % and something that's a current development is that the federal government is actively interested in having further grants to potentially build u from these feasibility assessments that are being completed and potentially help to construct projects. Great. So we're going to -- i'm going to talk about the findings from our feasibility assessment. So there were eight major areas that we looked at. In the interest of time here, i'm going to focus on those that we found to be the most promising and those that had the most challenged as we have pay for success here in travis county. So one of the most promising areas in the feasibility assessment was the outcome assessment. The goal here was to identify what are teen pregnancy prevention outcomes that travis county, central health, the city of austin, mission capital and united way are interested in prioritizing and would like us to explore further in this feasibility study? So the third sector conducted research in national teen pregnancy presentation, intervention, had conversations with the health and human services department and natural campaign to prevent teen and unplanned pregnancy and put together a list of about 12 outcomes related to the social issue area. And to talk more specifically about that, we characterized it based on how long does it take for a provider to achieve these outcomes, how can these outcomes be evaluated in terms of an evaluation design, and we then presented that forward to sherry, laurence and other community leaders. And we've had a robust voting discussion where we said which outcomes you do philosophically approve of and would like us to move forward with? And so there were five that were prioritized and our evaluation partner, which is a national evaluation firm, they prioritized three of them, which i'll go through, based on, okay, which outcomes can we find data sources around here in travis county? And so ultimately we found that we could move forward with a potential project around three outcomes, one being reductions of teen births. The second outcome being the postponement and delay of births and subsequent births and then the third outcome being high school completion and attendance. Something that I didn't mention earlier is that the target population that w 're looking at for the feasibility assessment that was prioritized from the city of austin was latino women aged 13-19. So when we're looking at the outcomes and the rest of our feasibility it was focused around that population here. % and something else that we should note is that travis county, our work that we did in this outcomes assessment, is being looked at in other communities who are exploring pay for success because we were able to get the teen to collaborate and to decide on these outcomes early on, where in other communities they might have had issues doing that. And so the other communiti s are picking up on lessons learned that we've done here. So we were able to prioritize these three outcomes and i'm going to skip to another area that was promising. So a lot of -- i'm going to talk about the intervention assessment. Here a lot of the community members provided a lot of time, i'd say over 50 hours or so of huge community support to help third sector explore what are teen pregnancy prevention/interventions achieving the outcomes that we've prioritized. And so we built from the research that we've done -- that we have done around the outcomes, we then held interviews with 16 providers in texas, nationally, and locally here in travis countn, and had assessed thehm according to pay for success criteria, such as what r they using to track outcomes, what is their scaling plan, and are they currently in travis county or not, along with other criteria. And so from that assessment we found there were a couple of providers that are viable for a pay for success project and presented this to the leadership team, which included travis county. What we came away with is that leadership team wanting us to do further research n the wyman center and to provide some color on that intervention, the teen outreach program is a youth development curriculum which has different components, including sexual health education. It also includes goal setting and decision-making, how to hold healthy relationships, and it's provided -- the% training for this intervention is provided by a national provider called the wyman center and they're in over 30 states including other cities here in texas. And they had actually come close to being the provider for another pay for success project in washington, d. C. And so we -- the leadership team wanted us to explore the economics of what it would take to do a project here in travis county with the teen outreach program and with the [indiscernible]. Another important thing that i'd lii to note from this is that -- well, travis county, the city of austin, and local funders who were involved in this assessment of providers told us that they were able t leverage lessons learned in terms of how do we provide our -- they said they could leverage this for other outside of teen pregnancy prevention and as part of their bro der funding method. So we thought that's a lesson learned that could be taken away regardless of what happens here. So now I want to get to the economics assessment. The le dership team wanted us to explore and do further research in terms of what could a potential pay for success project look like if we use the teen outreach program with long acting universal contraception so we built an initial economic model, which laid out key assumptions around the costs of this, as well as if we were to do a project witht these interventions, what would be the impact? So based on the three outcomes we prioritized, how could this provider achieve those outcomes, and at what level? I think what's important to say is that as part of the feasibility assessment this is an initial model, not a final economic model and it would be somethina that would need to be worked on should travis county or another what we're calling an end payer decide to proceed with a project beyond this feasibility assessment. So one of the things that we found is based on literatur reviews of the teen outreach programs and of long acting reversal contraception a potential project could achieve a 30% reduction in teen births, 30% high school completion attendance and 40% reduction in the postponement and delay of subsequent births. What's important to note here is that let's not -- I would encourage us to not focus on the economics because there are a couple of other things that travis county should focus on in terms of advancing pay for success before we focus on this area. I think rick, i'm going to turn it to you so that you can talk about whattsome of those areas are. 10:38 AM I think moving forward just two yours with that I think are important and then you're free to a sk questions. The decisions it takes every government entity or potential end payer is how far do they wawt to take pay for success. We take projects -- we take studies like we've done right through to full projects, which means that it is -- we go through what we call the government is an end payer, potential end payer. They have the present contracts. In this case we had central health, travis county, hhsd, all potential end payers, innovation in itself around this country, there might be potential multiple end payars. As a challenge we are challenging then all of the entities to say who would be the government champion to take this forward. It's very normal in all of our other workraround the country that a government champion steps forward. What does that mean? It means the day to day project manager, day to day person that makes the decisions around determining the final economic value. Why is that snore because you as the -- why is that important? You as the government entity want to know obviously your cost and savings and will you save money from this intervention scaling to a project. That's one of our goals around the country, is that we bring budgetary savings versus current spending for the government entity. That's a very normal role of ours, and it works very well with projectc. The second thing we do is we bring in external funders. As a whole market, as a whole liquidity market as you well know, it's high net worth individuals, institutions, banks, it's insurance companies, et cetera. What we do with our projects,% we did the massachusetts juvenile justice project, for example, at $29 million -- $39 million there andn hat we ended up doing is bringing in wall street, we brought in foundations, national foundations, we brought in local funders, independent high worth net worth individuals to fund the project. That's very, very important because then it allows obviously the government to say, wait a minute, I can ale a meaningfully impactful social service urgently needed in the community but I don't have to use all my own government funding streams. It's very, very important. This is very important I think for the whole process of pay for success as it grows around the country. There's a lot of other alternative investors who want to work with the governments and work with us as we sew these projects together. What's happening with this particular endeavor but would be reflective of anything you do, is our development grant is over but we want to help show you pathways you can begin -- and you come in a little on the outcome strategy, what we look at for options and then please ask questions. What we're looking at at a minimum right now we are at a stage where someone is going to have to step in and say I want to at the government level, I want to do more due diligence. I want to interact with third sector or other experts. I want to bring in more data. This is an important issue area for us and then you begin an entire new phase, feasibility, determine the final economic and take it % toward t project. That's important. Funders, I will say one quick comment, we've been doing a continuous funder check in this community. There's liquidity out there, strong therefore in this nationally in this issue area as people have called me and said where are you going to progress to in austin/travis county around teen pregnancy prevention and there's tremendous philanthropic interest in it. Suffice to says that something we would develop over time as well in this or any issue we would d around pay for success. I'm encouraged by the market's receptivity to helping markets. You want to quickly go lieu the -- 10:42 AM Yeah. so we're going to talk about what are the options that travis county can take beyond this feasibility assessment. I would start this outt by saying over the past months travis county and other community members have made tremendous progress in terms of exploring t s concec and so we think that there are two potential options that travis county can take and we'll talk about this. So the first one is travis county deciding to move towards a pay for success project related to teen pregnancy presentation. So what this -- prevention. What this would entail is travis county identifying what we c ll a government champion. So someone witi n travis county that says, hey, i'm interested in this social issue area and in this concept and will be that lead on behalf of travis county to ensure that a projejt is constructed. So in addition to identifying the government champion, what would also need to be done is that a project manager within travis county would work alongside that champion and with advisor on third s ctor on a day-to-day basis making sure the operations and development progress towards this project. In addition to having identified a government champion and identified a project manager we would also need to close a couple of the key gaps on the feasibility assessment and so what those are are, a, obtaining data around the free out-- three outcomes we've identified. What we didn't discuss is that associates and third sec 2 we were able to identify what are the pathways for obtaining data for each of the three outcomes. Another gap would be what ould we -- working on illegal and contracting assessment, where we identify what are the current funding streams and contracts that travis county has towards teen pregnancy prevention and what are the potential savings a d the up front -- sorry, not upfront but the total amount that travis county is willing to pay for should a pay for success project be successful. The reason why this is not part of this feasibility assessment is because the leadership team wanted us to prioritize on the other eight assessment areas that are discussed in the report and in this handout. So the l gal assessment is another key piece that would need to be worked on. And then something else, too, is that we strongly recomoend that whoever is the end payer, whether it's travis county or others, that they hold an open -- they design and hold open proccrement process to select that teen pregnancy prevention provider and evaluator. The reasoning for this is that we would design a procurement that's according to pay for success criteria. And this would be used to attract funder interest later on as we're developing the project. And it's very important for them to see that it was a transparent process, it was based on outcomes-based contracting versus just selecting a provider because we think that they will achieve the outcome. So that's the first option. Travis county deciding to pursue a pay for success project around the social issue area. The secretary option is that travis county can move forward with pay for success and with outcome -based contracting but not necessarily around teen pregnancy prevention. What travis county can do is to enter into a separate consulting or another type of relationship with an advisor to help them think about and to assess broadly beyond teen pregnancy prevention, how can we be rewriting our programs and be procuring based on outcome. There's a whole other set of services that could be provided with that, whether it's education with members who live in travis county abouo what is this pay for success concept as well. We're seeing a bigger shift here not just in travis county but nationally, where governments are, rather than focusing on one specific social issue area, they want to think about how can we enter into these outcome -based contracting so that we can, a, enter into contracts that achieve outcomes and, b, potentially receive savings on these contracts by investing in what works. 10:47 AM We wanted to stop there. I know there's questions. I know we've been trying to give you quick highlights of all we've done for the past seven months. So any questions we can help you with? Questions? Commissioner Shea. On the backup, I think it's page 2, there's an item that says an analysis of the legality of outcomes-based contracting, procurement and end payer ttp funding streams and mechanisms would help provide information to assess cost savings and final economic value. Do we know if this is allowed in the state of texas? Is it legal for governmental entities to do this kind of pay for performance contracting? When we started down this path back in 2014 we asked t e question. The basic answer was yes. The devil is in the detail in terms of exactly what kind of contract you're t lking about. Thtre's a lot of different ways this can play out and so as always we would have to look at with the county attorney's office the specifics of any given deal. But conceptually, the answer, again, the answer, it did start off, in general, yeah, we could. We'd have to figure out a way -- the specifics of the contract work, always the question is the deal we want to make. But it is, as we're told at the time it is doable. 10:48 AM So why put the questions in e itets in the backup? It sounded like the legality was not certain. Maybe i'm misreading this but I read you the language from the questions in the findings. So from my perspective, I think it continues to be a question because it will depend on how it is. So if travis county were to be an end payer, how we would structure, where those funds would be kept. So would you set up a reserve? Would there be some different kind of funding mechanism? Which is whyhwe have representatives from the auditor's office to attend some of these meetings, to talk about what, you know, might be the options should travis county need to figure out how to put funding aside for some future payoff, what would that look like? I agree with lawrence. It continues to be an open question because each deal, as we were to structure that deal and determine what contributions travis county would be making toward that end payment, we would have to run it by the auditor to say, yes, this is appropriate, and this is the b st mechanism to set aside those funds, if that's the appropriate way to describe it, and then the legality of it. So we would look at how much money we're talking about, where we're going to put I , and answer that question. So we think it's important for that question to remain open. 10:49 AM Yeah. 10:50 AM Because each contract will be different. Commissioner Shea, real quickly, it's a great question. It's just not the assessment area we went through in this phase of the development grant. It is a very important phase that we go through when every other -- on every other% project that gets developed. To sherri's point, honestly it does vary by county or by government agency. You just have to be specific. What is a pay for success contract what is a funding contract? Some of our transactions have as many as 30 plus contracts. There's very important legal aspects of this,s of what we call the value of pay for success that get explored as we move forward toward construction. So the answer to your question here for tpp or any issue area that is a very valid next phase step. There's so many things where state law prohibits us from doing things. I just thought if that was a deal breaker we should know about it sooner rather than later. Do I have another question based on -- 10:51 AM The question was asked at the beginning to see if -- the question at the beginning, is it prohibited and if it was answered yes, that would have been -- so it was not prohibited in the initial assessment so what we then decided, we're now in a position ofthe specifics of the particular deal, if wee want to go in that particular direction, would a particular deal be doable versus is the concept d ble? We've been in no state yet, no state that's not actually set at -- it won't be done in some way once the government champion decides to move forward with the idea of pay for success. And I get the concept of what seems to me the difficulty is in how certain you can be of the outcomes and what you're measuring, like did your program actually prevent the teen pregnancy or was it some other factor? And I noticed in here on the keyquestions and findings, it said can the stakeholders agree on specific outcomes to be measured and it said leadership team narrowed to three due to data issues and that seems to me to be the data is -- is the way you prove this up. So -- 10:52 AM You're absolutely right, commissioner, and I think this is an appropriate time at your estion to say it is also -- is the area that we are pursuing, the area that we as travis county are most interested in. Sosit's important for staff to note that there are multiple other feasibility projects being looked at in different ways in the county rirht n w. And so one of the options that you might like to pursue from this discussion is to maybe have -- direct health and human services to structure a work session for you so that you can get some flavor of the other projects. Because a critical question r us, espscially as an end payer, is, is there a project that we are willing to pursue under this concept that we are willing to pay money for outcomes? And there are a variety of other projects. There's one in permanent supportivehousing, for example, central health is looking at a project around their family partnerships. So the first question for us is what would be -- what would it take for us to be excited and interested about pursuing this funding model for a particular issue area that we are concerned about advancing in the community? That is a critical question for us. Nd it May be the issue around teen pregnancy or it May be something else. 10:53 AM I think that is a key point. I think that the pay for success model is something very intriguing to us,but as I look down at the findings, I would be looking for our first project out of the chute to have more -- more assessments of trong in that second columnm 10:54 AM Yes. And I think that's what we're looking for, is that first -- at first pay for success contract having a far higher probability of success @ because it is assessed at the outset as having a much stronger -- a stronger probabilities in the success te. Above all else, you are the champion that has to make that decision right up front. We are mow in communities where they have gone beyond, theyesimply say, look, we wish to now take a look at the broader outcomes-based contracting model around multiple issues that are facing their community. But all of them have at least begun the prosecutorrization mentally of saying, in our community over the next five to ten years we want these three issue areas, these t pe of outcomes. So one way you can look at it, we should look at your projects but i'm going to encourage you to look beyond that because there are cities and counties many this country rirht now thinking that way and we want to help -- I think austin wants to do this. We really want to move that way with you. Thank you. 10:55 AM Commissioner Davis, dodyou have a question? I didn't want to interrupt Commissioner Shea. She was asking very pertinent questions there and I think very relevant. And i'm not going to -- i'm not ready to vote on this today. I'm just letting you mow that now. I just think that -- as sherri said, we May need to look at other projects as far as what we determine what we want to fund. Right now we're not there. Right. And I know i'm not. maybe other court members -- maybe i'm just speaking for ron davis but I think as we further look at this and see what we want to fund and what we don't, I mean,it just -- i'm not ready to vote at all today. 10:56 AM This is just for receiving update. It's not for action. Yeah. until we hear this further. We don't recommend this project by the way right now as a project p. M. We're not here to tell you that. I understand. I just wanted you to know I -- I just think as you stated earlier the devil is in the detail on some things and you're right, it really is. Yeah. So i'm looking forward to whenever you bring it back to the court, I guess, as far as additional information, as far as what travis county is going to do for pay for success. It's a pretty big deal. Thank you. Anyway, we'll look at that. Do we have other questions? Commissioner Gomez? I had one. I think we've identified this issue before with the [indiscernible] and I wondered if we have data that shows how we have progressed? I know i've statted out with ka mm-hmm n when it was reoriginalling in 1995 and looking at all the different issues this community was interested in. I believe this was one of them and I sure would like to know how we have progressed on that issue as time has gone by and see what we have done to address it. The other thing is I think in order to be successful with this kind of project,t especially in the hispanic community, you have to have a real -- the involvement of the parents. And if you don't, it's not going to be very successful. And the young women May want to do something or not, but they're greatly influene d by their parents. So that would be one major concern that I would have. As well as sometimes the community, that they live in has a tremendous impact on what they do or do not do. And then the other thing would be, what is our current spending for teen pregnancy in our hhs department? Have we had spending as a result of this issue being there? 10:58 AM Yes, ma'am. we have investments that are part of our interlocal with the city of austin and so we can get you the specific detail of what investments around teen pregnancy are made but right now it is a part of our public health interlocal. Okay. I would like to see specific -- you know, the hispanic community in terms of the teen pregnancy and I think that would tell us if we w nt this route, then what kind of savings would we have, if any. And so -- but it is an issue of tremendous concern to me. It's just that it takes -- it takes some people who know that culture and know that community in order to make I a success. And that really concerns me. Yes, ma'am. and I think you have identified some of the reasons why the recommendation for this particular project probably is not as strong as all of us would like it to be. And so, yes, it is -- there are many questions I think remaining as there are answers that we've found thus far. 10:59 AM And I think some of it is in the training of the adults who influence those young women, and you have a 14-year-old granddaughter, we have some very serious discussions about these issues. And believe it or not, 14-year-olds do understand issues, but I think that sometimes there's -- there's a concern with adults that, well, we're going to put ideas into their heads, you know, the idea isn't there and if you start talking about it, you know, they'll start thinking about it. And that's not so it it's just like any other education issue. You have to educate young women about the issues that are involved in everyday life. And this is a way that they come to understand the issue, and thehy understand, you know -- they understand the issue and the ramifications. So it's -- there's a lot of stuff involvev here. Not just the young people. It's the families, the adults who are influencing them, the community. [one moment, please, for a change in captioners] to take into account some of the trends we're seeing. And part of the reason for the decrease in these rates is partially due to some existing local efforts, including the tandem prenatal program in the community that has done a lot of work around long acting contraception and that's being led by people's community clinic and other organizations. So I think you bringg p a good point. It is the hispanic woman population has higher teen birth rates in comparison to the broader population in travis county, but rate is decreasing annually. 11:02 AM So it sounds like we will have a work session for -- to look at the pay for success model as well as the solutions we May want to fund using this model, including teen pregnancies, but also looking at some of our other issue areas where we do see solutions that we think if scaled would really move the needle for us. Are they actively involved in helping to identify the areas? I think they've got a really interesting model to kind of work backyard and identify root causes of problems that become much more difficult and much more expensive for public entities. And are they very involved in the selection effort? 11:03 AM So the selection process on the front end, I would y yes, they were involved in the selection because we were -- there was a collaboration that with the city as the lead to apply for the the grant that we received. But clearly the city of austin was the lead applicant and had high interest in looking at this particular issue area. And the group looked at multiple issue areas and so there was a broad agreement that this would be one that we would move forward to the grant, you know, for the purposes of the grant. I do help him on n- But we can further delve into the process around pay for success and the apparatus that we need in the work session because we do have some other items to reach this morning. But thank you so, so m uch for being here. Thank you. he. 11:04 AM The next agenda item is nunber 4, consider and take appropriate action on appointment to the boards of strategic housing finance corporatio and housing authority of travis county. Morning, judge, commissioners, julie wheeler @ with the intergovernmental relations office. We are back today to bring you the recommendations of the subcommittee. Initially w had seven candidates in the subcommittee and narrowed it down to two applicants to be interviewed this Thursday at the work session. Those two candidates are henry flores and robbie miyer. So first we would ask you for you would approve those nominees. We have a motion by Commissioner Shea. Do I have a second? Second. Second by Commissioner Daugherty. All those in favor? That passes unanimously on a 4-0 vote with one abstention.