Especially in these resource-constrained times at all levels, whether the prospect of a federal budget meltdown to tightening of the household pocketbook, it is time to take a shot at cost efficiencies among the most intractable social issues of the day.
These are issues like chronic homelessness and juvenile offender recidivism, two in particular that the state has chosen as targets of a new results-oriented solution called social innovation financing.
I would add a third societal issue to benefit from this promising new funding approach: a fractured service delivery model for seniors. The goal would be to make senior housing and today’s health-care delivery model for seniors compatible and senior-focused.
Conventional models of service delivery for homeless individuals or youth offenders are expensive. There is, indeed, a huge cost to doing nothing or offering piecemeal approaches.
Six months ago, the Patrick administration focused its energy on this relatively new and promising way not only to measure the ground being gained against systemic problems, but perhaps even to reduce costs.
It works like this.
Currently, the state spends a certain amount of money on a problem – for example, incarcerating juvenile criminal offenders. Under this pilot, the state invites established professionals to propose better ways of treating those young people, with the focus on preventing bad behavior, not just punishing it after the fact. At the same time, the state engages the investor community, largely philanthropies, to fund these innovative interventions, with what are sometimes known as “social innovation bonds.”
With the help of the academic community – specifically, Harvard’s Kennedy School of Government – state officials from the administration and finance secretariat and other agencies craft the criteria for determining whether these privately funded and operated programs are successful.
What percentages of youth reoffend in five years, for example, and find themselves back in custody, compared with conventional service delivery models?
If this new way of addressing the problem saves money, the state gets better results for its dollars spent and the private investors get back their money, plus a modest return. Everybody wins – perhaps most importantly those youths who navigate to the right path to becoming productive adults.
As Ryan Gillette, a Massachusetts government innovation fellow, said, “If you can keep kids from going to prison, you can use the savings from avoided incarceration to fund the intervention upfront, allowing these programs to effectively pay for themselves.”
If the result isn’t any improvement, the state hasn’t lost anything. It is an interesting approach, and others, including officials in New York City and the investment bank Morgan Stanley, are trying something similar on a pilot basis.
Addressing Senior Housing
In Massachusetts, close behind the juvenile program is one to address chronic homelessness. Again, the state is looking for organizations with creative ideas of how to end the cycling in and out of shelters and emergency rooms. There has been interest both from service providers and investors.
Our organization, B’nai B’rith Housing, a nonsectarian developer of affordable housing, sees real promise in this experiment in addressing chronic homelessness. We also see its immediate applicability to a third area, which relates to senior housing. It is based on the premise that often the best thing for the health of a senior is to keep them living at home.
As we move forward with a service-enriched senior housing complex in Sudbury, and similar efforts, we recognize that enlisting providers of social, health, counseling, transportation and other services is in the interest of residents as they strive to maintain independency for as long as possible.
This approach is much less costly than one in which that same senior finds him or herself referred to the more institutional options of assisted-living, nursing home, hospital, hospice, or some costly place that isn’t home.
Social impact financing promises to enhance the quality of life of individuals and offer solutions to a system struggling with the cost of care today and seeing only higher costs in its future.
Susan Gittelman is executive director of B’nai B’rith Housing, a nonprofit, nonsectarian developer and operator of affordable and mixed-income housing serving families and elders in communities of Greater Boston. BBH is currently working on developments in Sudbury and Sharon.
