Wednesday, July 12, 2017

Social Impact Bonds are not a magic bullet, but they can be useful

On 6 July 2017, we delivered a webinar on the Life Chances Fund (LCF) and Social Impact Bonds (SIBs) timed to raise awareness of the latest LCF call-out. As an independent public interest organisation, we are not in the market to “sell SIBs”. Instead, our mission is squarely on working with public services to enhance social impact.

The presentation begins at 5:10
Dr Pete Welsh presents at 8:23
Dr Chih-Hoong Sin presents at 24:55

 

 

Despite SIBs having been around since 2010, there is still a relatively low level of awareness. I have written elsewhere about how myths and misunderstandings abound in the context of a lack of transparency and limited, albeit improving, learning and sharing. I have also argued elsewhere that an innovation, such as SIBs, may be abandoned because of dissatisfaction with early versions of it, which may not have fulfilled the creative potential that may be on offer.

We maintain that SIBs are not a magic bullet. Nonetheless, we believe they have value particularly when considered as part of a wider suite of responses to financing and delivering public services.

Those interested in the LCF should not start with the position of: “I want to do a SIB”. If all we have is a hammer, then everything looks like a nail that needs pounding. We should start with clarity over the problem we are trying to solve. Work is then needed to explore whether the potential solution is amenable to outcomes contracting. Where the issue at hand lends itself to being tackled through an outcomes-based commissioning approach, we then need to consider whether social investment adds value or whether there are other more appropriate ways of financing and delivering an outcomes contract.

While not exhaustive, we present three reasons for why and when SIBs may make sense for commissioners.

  1. The space to innovate – When budgets are tight, there can be aversion to taking risk. New, untested, interventions may be overlooked as the risk of failure is high. Commissioners do not want to be seen as ‘gambling’ on things that prove not to work. Under a SIB model, the financial risk of failure is transferred onto social investors. Commissioners only pay for outcomes, and not for failure. In this way, SIBs can be seen as one way of protecting the space to innovate.
  2. Driving efficiency – With established services, there may be less inclination to adopt a SIB approach. There is, however, emerging evidence from evaluations that SIBs can drive higher levels of outcomes even for proven interventions. Of course, it is still too early to conclude that SIBs always drive higher performance, and more evaluations are needed. Nonetheless, if this early finding is true, then SIBs can be said to drive greater efficiency in existing interventions. Process evaluations report consistently that the SIB model, by aligning incentives, encourages commissioners, providers and social investors to work together and ‘pull in the same direction’. Where they work best, SIBs have been shown to have helped join up the ‘different worlds’ by breaking down institutional and cultural barriers to effective partnership working.
  3. Availability of top-up funds – At this point in time, the £80million LCF represents a time-limited window of opportunity for commissioners to tap into additional funds to help pay for outcomes. With top-up contributions from the LCF typically around 20 per cent of the overall financial value of outcomes, commissioners stand to ‘keep more of what they save’. This top-up contribution is obviously meant as a ‘sweetener’ for more commissioners to engage with SIBs. However, just to portray it as such is to oversimplify things. SIB funds like the LCF, its predecessor the Commissioning Better Outcomes Fund, and others, perform a more important function of helping to break down commissioning silos. There is clear recognition that many of the social issues that SIBs have been deployed to help solve are entrenched and cross-cutting. For example, tackling alcohol dependency not only has implications for the use of health and social care services, but also for housing, criminal justice agencies, etc. Working out ‘who pays and who saves’ can be hugely challenging, and can stand in the way of effective co-commissioning. Many have argued, nonetheless, that top-up funds like the LCF are not sustainable over the longer term. In the meantime, they do provide the opportunity for at least testing out different models of co-commissioning. It is of interest to note that there are already efforts underway to develop SIBs that do not rely on top-up funds. It will be important for learning from these efforts to be shared more widely.

In conclusion, I reiterate the importance of being clear about the rationale for developing a SIB. For commissioners, this is especially pertinent as there are a range of alternatives for raising capital, some more cheaply than others. There needs to be a clear case for using public monies under a SIB model, with effective communication around how SIBs can add value.

Dr Chih Hoong Sin, Director, Innovation and Social Investment

 

Additional video and interactive content is available via the Webinar Webex site here.  Note – it is best to access using Chrome or Firefox.

 

Monday, March 20, 2017

Commissioning for Outcomes – The role of social finance

Can social finance help with the challenges that public commissioning faces?

This paper is intended as a provocation to government, commissioners, providers and investors to begin a richer conversation that doesn’t assume we already know the answers. OPM’s experts in commissioning for outcomes (Sue Goss) and in social finance (Chih Hoong) draw on their learning about systems leadership, experience of teaching commissioning programmes and our work in evaluating social investment experiments.

Monday, March 20, 2017

Commissioning for Outcomes – The role of social finance

Can social finance help with the challenges that public commissioning faces?

This paper is intended as a provocation to government, commissioners, providers and investors to begin a richer conversation that doesn’t assume we already know the answers. OPM’s experts in commissioning for outcomes (Sue Goss) and in social finance (Chih Hoong) draw on their learning about systems leadership, experience of teaching commissioning programmes and our work in evaluating social investment experiments.

Wednesday, December 7, 2016

Support for outcomes-based commissioning and the role of the GO Lab

Introduction

Outcomes-based commissioning (OBC) has attracted increasing attention as part of Government’s wider reforms to public services, set out in the Cabinet Office’s 2011 white paper. In the first blog of this series, I shared some of the learning and messages we have gleaned from our work with commissioners in this area, specifically in relation to the technical and cultural challenges and the potential for a wider approach towards outcomes that balances service user-defined and system-defined outcomes.

In this second blog, I share some of what commissioners have been telling us in terms of the support they need to enact OBC and also reflect on the implications for the Government Outcomes (GO) Lab. The GO Lab was established through a partnership between the Blavatnik School of Government at the University of Oxford and the Cabinet Office, as an independent centre of academic excellence for innovative public sector commissioning.

Support and resources

We have found that many commissioners are unaware of the range of support and resources available to support OBC. For example, across the successive cohorts of commissioners we have been working with as part of the Cabinet Office’s Commissioning Academy, we have found very low levels of awareness of things such as ‘rate cards’ and the Cost Benefit Tool for Local Partnerships. In the previous blog of this series, I reported that commissioners often articulate the technical challenges of OBC, which can include pricing outcomes, for instance. Yet resources like rate cards and the Cost Benefit Tool for Local partnerships are key resources in helping commissioners determine outcome pricing.

This is a clear sign that simply making something available does not mean that it will be used. Indeed, potential audiences may not even be aware of the existence of such resources, much less use them.

We must understand what commissioners need in relation to resources and support, and how they prefer to access these. Commissioners we work with describe utility of resources and support in terms of their specificity and bespokeness in relation to intended use. For example, there can be a preference for local data over published national statistics, for example, in relation to pricing outcomes. This desire for specificity has implications for replication and the usefulness of generic resources. There has to be some way of ‘translating’ generic resources and unpacking them for use in specific contexts – a process of ‘making it real’.

This is where we need to understand the importance of peer-to-peer learning and sharing within the commissioning world. Amongst the commissioners we work with, it is evident that ‘word of mouth’ is hugely influential. This peer-to-peer transmission of know-how is important as it helps translate how something should be done in a specific context.

GO Lab

Commissioners have told us that it would be desirable to have a central body responsible for evidence synthesis and dissemination to support better commissioning. This suggests that the GO Lab may have an important role to play. However, there is still a very low level of awareness of the existence of the GO Lab and its role among the commissioners we work with. The GO Lab needs to clarify its remit; ways of working; and strategy for engaging different types of commissioners. It has an urgent task of raising awareness among its intended ‘customer base’. To do so will require working collaboratively with other players to extend reach and meaningful engagement.

While there has been a lot of emphasis on the GO Lab’s role in relation to evidence on ‘what works’, there is another complementary perspective about the need for a hub that looks specifically at what types of commissioning models are appropriate in what circumstances (i.e. in essence a ‘what works centre’ for commissioning as opposed to a ‘what works centre’ for interventions).

Conclusion

With the challenges confronting public services and the attendant need for innovative responses, it is vital that we create spaces for commissioners and others to come together to share experiences and insights into effective ways of commissioning. This requires more than just pushing out information. This reframes the processes away from a simplistic knowledge creation and transfer model, to one that is based on knowledge co-creation.

Dr Chih Hoong Sin, Director, Innovation & Social Investment

Thursday, December 1, 2016

Commissioning for outcomes – challenges and opportunities

Introduction

In the UK, around £15bn of outcomes contracts has been commissioned in 5 years. Outcome contracting or outcomes-based commissioning (OBC) is not new, but its use has attracted increasing attention as part of the Government’s wider public services reforms, set out in the Cabinet Office’s 2011 white paper. It is aimed at building more accountability into commissioning and to create a direct financial incentive to drive outcomes while incentivising providers to find better ways of delivering services. However, as the National Audit Office reported, OBC is not the ‘magic bullet’ and is not suited to all public services.

Appetite for OBC

In our experience of working with a wide range of local commissioners and those in commissioning networks; we are aware that OBC is still highly variable. Commissioners are conscious of the challenges of OBC. The process of developing and procuring outcome contracts is technically challenging. Interestingly, while much has been written about the technical challenges associated with defining outcome metrics, identifying target cohorts, establishing causality between intervention and outcomes, setting appropriate outcome payment, and procuring OBC; there has been less attention given to the cultural challenges of developing and procuring outcome contracts.

Our engagement with commissioners indicates that they do not under-estimate the technical challenges of OBC, but largely feel that they can have access to in-house capacity and skills for analysing outcome, activity and financial metrics; or are able to lever in such expertise. However, technical expertise per se is insufficient.

The structure and organisation of the statutory sector can pose challenges. For example, it is hierarchical and, despite good intentions, still operates in silos. Developing OBC often requires ‘going against the grain’ of established practice. Breaking down silos, networking and influencing effectively, and being able to understand and navigate complex relational dynamics within a commissioning organisation can sit uncomfortably within settings that are more commonly characterised by deeply entrenched sets of institutionalised behaviours and bureaucracy.

Commissioners often talk about risk in the context of OBC. They hint at the need for a different attitude towards risk within the statutory sector, and also different ways of ‘holding’ and managing the risks. Risk assessment and risk management have become de rigor in many statutory services and organisations and, in these contexts, risk is conceptualised and understood in negative terms. However, risk management strategies can often reflect public opinion and market forces, rather than stem from any objective analysis of risk. There are also deep contradictions in relation to whether risks are managed at the individual or collective levels. The issue of ‘who holds what risks’ is highly pertinent in this context.

Outcomes for whom?

As I have written previously elsewhere, ‘outcomes’ are still largely system-defined. This is more than an issue of ‘who pays’ and ‘who saves’, but also recognises the fact that ‘the system’ (e.g. healthcare, social care, children’s services, etc) already collects a significant amount of data routinely, using broadly consistent techniques. It is therefore perceived to be more ‘cost-effective’ to use such existing data, particularly when such data are also key targets or KPIs against which organisational performance are assessed.

There is a paucity of evidence around the link between individual-level and system-level outcomes. There can be over-simplistic assumptions around the link between, say, achieving better individual wellbeing and resultant decrease in service use. Despite the rhetoric around person-centred care and user involvement, genuine involvement of service beneficiaries in defining outcomes is still rare.

Interestingly, there may be potential to reframe the way we look at outcomes. For example, while the Sustainability and Transformation Plans (STP) agenda has been criticized by local authorities and by those championing public consultation, the high level principles and vision underpinning it can be used to open up a wider discussion around “outcomes for whom?”. In our own work with commissioners, we have encountered colleagues in Clinical Commissioning Groups who have used the STP agenda to embrace a wider perspective on outcomes – in particular to involve service users in co-defining ‘what success looks like’, over and above any system-level benefits, even if these may not result in ‘cashable’ savings.

Conclusion

Looking ahead, we need to pay more attention to the needs of commissioners in terms of the support they require to enact OBC, with clearer guidance for thinking through where OBC may or may not work. The support should cover not only the technical aspects of developing and procuring OBC, but should also extend to include support for navigating the relational aspects of OBC, both internally and externally. It is also crucial to better understand how commissioners access support. From our experience, effective commissioning support is never simply about ‘pushing’ information and resources ‘out’ to commissioners. There should be a strong formative thrust aimed at helping commissioners translate and unpack resources and learning, and making these work in their specific local contexts. In addition, we know that peer-to-peer support and exchange can be critical in sense-making and practice improvement. This is where commissioning networks can play a vital role in encouraging and sustaining such exchange.

Dr Chih Hoong Sin, Director for Innovation & Social Investment

Monday, September 19, 2016

Health and social care integration in Kirklees

Background

We have worked to develop collaborative leadership across health and social care systems in a number of localities. In Kirklees we were asked to support the creation of a integrated mental health commissioning system as an exemplar from which the whole system could learn.

What did we do

A very senior group of leaders worked together over a number of sessions to develop a shared set of principles and goal – and a series of practitioner workshops began to flesh out what this would mean for front line services. Recognising that success would depend on the strength of relationships between staff in different organisations, we designed and delivered a ‘Skills for Systems Leadership Programme’ for the public health, social care and CCG senior teams – agreeing key health outcomes and providing the skills and techniques that enabled cross-organisational teams to develop shared approaches to changing behaviour and tackling long-standing problems.

Outcome

The programme built a strong network of organisations and individual leaders, a shared understanding of systems pressures and agreement about the way forward. The work included providing individual coaching and support to key leaders, facilitation and team coaching sessions for top managers and partnerships. The final stage of the programme was to create a dramatic ‘future scenario’ event for fifty or so participants including the voluntary and community sector, from which partner organisations developed a set of principles to guide future shared direction.

Monday, September 19, 2016

Repairing a dysfunctional partnership (client confidential)

Background

We were asked to step in when relationships between a County Council and Clinical Commissioning Groups broke down. Trust was low, meetings were fractious and unproductive and progress in health and social care integration had halted.

What did we do

Sue Goss began a painstaking process of meeting each of the leaders individually, listening carefully to their feelings as well as their account of what was going wrong. After hearing from everyone, she brought a leadership group together and shared a ‘problem tree’ – a visual representation of all the emotions, concerns, problems and issues that had been aired – and gained agreement from everyone to try and change things. A carefully structured awayday followed, in which leaders worked in pairs to listen to each other and build an understanding of the different perceptions and assumptions that had grown up. These were then shared in small groups and finally in the whole leadership group.

Outcome

Participants discovered that although they were often in rooms together, the pace and format of meetings and the size of agendas left little time to think and less time for meaningful conversations. The formal technical language of strategy and plans made it hard to express worries, and no-one felt their concerns were heard or responded to. What was striking was that this was a dysfunctional system with no “villains” – everyone was trying to do their best.

By creating space for the right conversations to take place, and the difficult work that had so far been avoided to be faced – it was possible to slowly build trust. Relationships slowly improved over a number of months – and while tensions didn’t go away, it was easier for them to be named, and dealt with. Leaders began to pick up the phone or go for coffee together, rather than sending prickly emails. This is work in progress.

Monday, September 21, 2015

OPM continues social impact bonds knowledge sharing relationship with Japanese universities

Earlier this month we were delighted to welcome an SIB research delegation led by Meiji University back to OPM.

The visit is the latest development in the partnership supporting a 5 year empirical study funded by the Japanese Government into how social impact investments, especially SIBs, affect governments, social service providers, service users, and the standard of social services in the UK – further evidence of the interest internationally in the progression of the UK social impact bonds market since the world’s first was implemented in Peterborough Prison 5 years ago.

The delegation first visited OPM last November to hear about our experiences evaluating the Essex County Council SIB and ‘Peninsula LIST’ project, and continuing the relationship in April OPM’s Director of Business Development Dr Chih Hoong Sin spoke at the 2015 Social Investing and Corporate Social Responsibility (CSR) Forum, held at Meiji University in Tokyo – presenting his observations of the nature of the ‘first wave’ of UK SIBs and the lessons to be learned from the world’s most developed market.

OPM’s expertise, it is hoped, will contribute to the launch of the 1st Japanese social impact bond.

This latest meeting was particularly timely. At the time of writing the UK still accounts for the largest number of SIBs globally (31), having been the first to pioneer the pay-for-performance vehicle that leverages private funding to finance public services five years ago. In addition, Social Finance had recently announced details of the first UK social impact bonds to perform above expectations and deliver outcomes sufficient to return investor capital earlier than expected. 

Yet the international backdrop is more mixed.

The Riker’s Island SIB, which aimed to reduce recidivism among 16 to 18-year-olds who entered New York City’s Rikers prison by at least 10% had been terminated due to failing to achieve the agreed targets, while a new report from the Brookings Institute (Chih Hoong Sin is referenced as a study participant on page 52 and OPM’s evaluation of the Essex Family Therapy SIB features on page 84) this summer called for increased transparency and knowledge sharing on the potential and limitations of impact bonds to move this agenda – how to better ensure the achievement of outcomes for vulnerable populations – forward.

In this context we were in a position to update our Japanese colleagues on the progress of our evaluation of the ‘Essex SIB’ – the first in the world to be commissioned by a local authority – and the ‘Peninsula LIST Project’, that aimed to use an SIB as vehicle to commission public services across 4 local authorities in the South West of England.

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If you would like to find out more about OPM’s evaluations of the ‘Essex SIB’ and ‘Peninsula LIST’ projects, please contact Chih Hoong Sin, Director of Business Development at CSin@opm.co.uk or on 0207 239 7877.

Wednesday, May 27, 2015

Social Impact Bonds: UK and comparative perspectives – Part 2

I was recently invited to Tokyo, Japan, to share learning from the UK experience of designing and implementing Social Impact Bonds (SIBs). The UK was the first country in the world to implement a SIB – the innovative model that levers private capital to fund services aimed at generating measurable social outcomes for defined target groups – and it continues to lead the world in this field. It is unsurprising, therefore, that there is a lot of interest internationally in the UK experience.

Knowledge gap

There has been a noticeable shift in interest. No longer are the questions ‘what is a SIB?’ or ‘why should we use a SIB?’ commonplace – we are now more likely to hear ‘how might we make a SIB work for us?’ Japanese academics, leaders from industry, local government, charitable foundations, and the voluntary and community sector are in the midst of designing the first Japanese SIB and are hungry to learn more from the UK. Enquiries ranged from ‘what are the operational issues we need to plan for and anticipate?’, ‘how might we overcome some of the likely challenges?’ to ‘are current SIB models directly transferable to Japan?’ This final question, according to feedback from Japanese colleagues, is where a real gap in the knowledge base exists. OPM, given its unique position in straddling the commissioner, provider, and evidence worlds; coupled with links with the social investment sector, is seen as well-placed to share learning around these issues.

Some lessons learned and shared

Here are a few of the many issues I discussed with my Japanese counterparts:

  1. Knowledge of SIBs is often partial

SIBs are evolving rapidly. It is notable that much of what I encounter both here in the UK and in Japan reflects an understanding of the ‘first wave’ of UK SIBs. For example, many commissioners tell me they are put off from considering SIBs because of the long lead-in time and high development costs. While the Essex SIB took 23 months to develop and at a cost of around £300,000; there are now SIBs that are much quicker to commission. The Birmingham SIB is a case in point. Similarly Evidence-Based Social Investments (EBSI) developed a ‘spot purchase’ model of SIBs designed to reduce transaction costs for commissioners.

  1. SIBs are not exercises in technical design and financial modelling

Significant amounts of time can be spent on getting the technicalities (such as the outcome data, comparator data, savings and repayment modelling)  ‘right’. However, planning for SIBs should always include sufficient resources for engaging not only the workforce that is likely to be involved in delivering or supporting the intervention, but also for engaging with stakeholders inhabiting the wider ‘ecosystem of services’ that the intervention is to be introduced into. Without this, implementation will almost always come up against barriers caused by inconsistent processes; lack of shared understanding etc.

  1. What do we mean by ‘evidence’?

SIBs and evidence go hand-in-hand. SIBs can favour ‘evidence-based interventions’ due to greater certainty around likely outcomes (and hence repayment). ‘Evidence’ overwhelmingly refers to outcomes and effect sizes. There are two obeservations here: First, could this focus upon ‘evidence-based interventions’ lead us to favour only the types of interventions that are backed by ‘evidence’ and/or those backed by certain types of evidence (e.g. from randomised controlled trials)? If so, can SIBs genuinely support innovation? Second, any intervention, even when proven to be effective, will only work well if implemented effectively in complex local contexts. Do we pay enough attention to what effective implementation looks like in different contexts?

  1. Who defines ‘social impact’?

As the ‘first wave’ of UK SIBs are commissioner-driven, the definition of ‘social impact’ has largely reflected their priorities (e.g. size of potential savings). This doesn’t always have to be so. In fact, such a limited interpretation of SIBs will stunt their development. Indeed, with the newer types of provider-driven SIBs, there are alternative ‘voices’ being heard with their own interpretation of what ‘social impact’ looks like.

Conclusion

SIBs will be not be suitable for all types of interventions and target groups. Through all the twists and turns, it is vital that stakeholders remain focused on the outcomes for people we are trying to support. SIBs are an innovation designed to help address some of society’s most intractable social problems, and should be considered as part of an arsenal of commissioning approaches. Equally within SIBs, we should continue innovating; pushing the idea further to explore the possibilities for achieving meaningful social outcomes for some of the most vulnerable groups in society.

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You can view the slides from Chih Hoong’s presentation in Part 1 of this blog.

If you would like to find out more about OPM’s evaluations of the ‘Essex SIB’ and ‘Peninsula LIST’ projects, please contact Chih Hoong Sin, Director of Evaluation, Research and Engagement at CSin@opm.co.uk or on 0207 239 7877.

 

Tuesday, April 7, 2015

Person-centred care: measuring impact

A key concern within integrated, personalised care is demonstrating the changes or impacts achieved. The aims are long term, reshaping the way that care is delivered (and received) and will take time to embed and filter through to improved health outcomes for patients.

So what evidence can commissioners, and others, show in the short term to demonstrate that their initiatives are working?

Quite simply, they can show that they are changing the way that healthcare is being experienced by patients. If commissioners can show that consultants, nurses, patients and carers are changing the way they interact, they can show that their programme is, in the short term, moving in the right direction. This is the first step in achieving change and builds an evidence base on which longer term outcomes can be attached.

So how do you demonstrate change?

Commissioners we spoke to told us that it can be really valuable to show what the changes to service usage actually look like on the ground. Showing the different ways that patients are being involved in their own care or decisions around their care can be really powerful. This could be patients perceiving the importance of self-managing their own care or being invited by the clinician to help decide between several treatment options.

OPM have already contributed to work carried out by the Health Foundation, reviewing approaches to measuring whether person-centred care is taking place. Our work for South East Commissioning Support Unit built on this work and focused on identifying measures for two specific areas: Shared Decision Making and Self-Management. These measures, for example the SHARED Scale and Patient Enablement Instrument, allow commissioners to demonstrate in a very tangible way that patients are playing a more active role in their care. By contributing to decisions about what care is appropriate for them, and taking a role in managing their own care, patients are moving away from a deference to, and dependence on, primary care practitioners.

We produced a searchable database of tools which can be used to demonstrate that interactions and relationships between patients and health care practitioners are changing, in specific and real ways. We shared these resources with commissioners and health care providers across three workshops to enable them to start using the tools.

We found that commissioners really appreciated this type of support. When we shared our database, and a framework for integrating it into project implementation, commissioners told us that it:

This positive feedback gives us confidence that this is a tool that will genuinely add value for commissioners. Participants that came to our demonstration workshops told us that in partnership with the tools for person-centred care , they have a solid foundation for implementing more robust programmes that create both impact and learning for the future.

We encourage all those working in this area to share their experience. It’s a new field of working and our workshops showed that everyone is keen to learn what works from those who are implementing change on the ground.

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This is the second in a series of blogs to be published following the development of a set of online tools and resources by OPM in support of the person-centred care agenda for South East Commissioning Support Unit. The first is entitled: Person-centred care: putting patients in control and the third: Patients in control: ‘assume it’s possible’.