Pay for Performance: Implementing an Outcomes …...WIOA Pay for Performance (P4P) Provisions New workforce legislation incentivizes agencies to structure outcomes-oriented “P4P”

This document is the property of Third Sector Capital Partners Inc It contains confidential proprietary copyright andor trade secret information of Third Sector that must not be reproduced disclosed to anyone or used for the benefit of anyone other than Third Sector unless expressly authorized in writing by an executive officer of Third Sector

Pay for PerformanceImplementing an Outcomes-Based ApproachCWA Meeting of the Minds 2018

September 4 2018230 pm ndash 330 pm

Insert Client Logo Here if Relevant

Agenda

bull Introduction to Outcomes-Orientated Contracts and WIOA P4Pbull San Diego Workforce Partnership Case Studybull Discussion and QampA

copy THIRD SECTOR CAPITAL PARTNERS INC AND SAN DIEGO WORKFORCE PARTNERSHIP

Anatomy of an Outcomes Orientation

Innovative outcome-oriented contracts align policy dollars data and services around improved social outcomes

BETTER OUTCOMES

SERVICES

POLICY

DOLLARS

Evaluate the effect of services on outcomes to inform policy

decisions improving the efficiency and effectiveness of

spending over time

Utilize contracts to leverage flexible funding by creating incentives for coordination innovation and continuous

improvement in services

Implement policies that link funding to outcomes providing

increased flexibility and transparency in spending of

taxpayer dollars

Share data to support service delivery focused on outcomes

allowing providers to align services with the needs of their

community

DATA


OUTCOME GOALS

INCENTIVE STRUCTURES

Components of an Outcomes Contract

Outcomes contracts are created by a group of stakeholders and share common components focused on innovation rather than instruction

Developing outcomes contracts with stakeholders through a collaborative process builds capacity for the community to scale their outcomes orientation

DATA SHARING amp EVALUATION

PERFORMANCE METRICS

CONTINUOUS IMPROVEMENT PROCESS

1

2

3

4

5


WIOA Pay for Performance (P4P) Provisions

New workforce legislation incentivizes agencies to structure outcomes-oriented ldquoP4Prdquo contracts to achieve longer-term program outcomes

Ties payments to costs or if performance based inputsoutputs or short-term outcomeslike job placement

2-year funding cycle requires short contract periods no time for course correction

Most workforce contracts are actually just cost-reimbursement with no link to performance at all

Payments tied to long-term outcomes like education attainment wage growth and reduced recidivism

10 ldquono-yearrdquo set-aside of WIOA formula funds can be spent well beyond the 2-year funding cycle

P4P contracting strategy is required Includes evaluation 3rd

party data checks and project cost-modeling

Traditional Workforce Contracts including Performance-Based Contracting WIOA Pay-for-Performance


Beneficiary Population

Contracting

Workforce organizations can take incremental steps to towards outcomes-oriented strategies

Reaching an Outcomes Orientation in Workforce Development

Option 10Pilot Contract

Option 20Scaled Initiative

Option 30Systems Change

Identify a specific population in need Expand beneficiary pool

Intervention

Data

Outcomes

Performance Payments

Service entire workforce system through outcomes orientation

Establish enrollment and referral structure

Scale enrollment and service delivery

Share best practices for achieving outcomes across provider network

Access existing data sources Gain access to external data sources to measure outcomes

Establish streamlined data sharing and integration

Identify end-of-program and existing metrics

Include outcomes beyond existing workforce metrics

Long-term outcome measures (workforce and other metrics)

Set aside contingent payment for achieving outcomes

Expand amount of contract value that is contingent

Create menu of performance payment options across providers

Update contract addendum with payment provisions

Include payment and evaluation process in contractaddendum

Execute outcomes contracts across workforce system

Evaluation Establish baselines for existing metrics

Improve performance by managing to outcomes

Rigorous evaluation and program monitoring and reporting

SERVICES

DATA

DOLLARS


Agenda

bull Introduction to Outcomes-Oriented Contracts and WIOA P4Pbull San Diego Workforce Partnership Case Studybull Discussion and QampA


San Diego Workforce P4P Project Overview

San Diego Workforce Partnership (SDWP) used WIOA funds to pilot paying for a combination of outputs WIOA measures and long-term outcomes

Method Independent validation of long-term individual and cohort level performance data as compared to historical baseline and agreed-upon success targets to confirm achievement of successful long-term outcomes by program participants

Funding ~176M total WIOA funding over 35 program years

Incentives $700K in performance contingent payments paid to provider

OUTCOMES GOALS

GOALSImprove education employment and recidivism outcomes for 300 justice-involved Out-of-School Youth in San Diego County by leveraging WIOA funding to transition towards outcomes-based contracting

Outcomes bull Increased educational placement and attainmentbull Increased short- and long-term employment

placementbull Earnings above minimum wagebull Reduced recidivism rate

DATA SHARING ampEVALUATIONPERFORMANCE METRICS

CONTINUOUS IMPROVEMENT PROCESS INCENTIVE STRUCTURES

Improvementsbull Tracking of administrative data outside

traditional workforce outcomes = uarr insightbull Data feedback loop generates ongoing

iteration for improved service provision


To serve the goals of the county SDWP assessed populations being served by itrsquos WIOA funds to identify a high-need high-risk population

Outcomes-Oriented ContractingTraditional Contracting

OUTCOMES GOALS

Ad Hoc Enrollment Across Large Population

Focused Outreach and Enrollment

41000 disconnected youth in San Diego County are eligible for services

Targeted focus on harder to reach youth means 300 justice-involved young adults

will be served



SDWP outcomes contract links three different administrative data sources to develop outcome measures for evaluation and incentives

Employment Data(Short amp Long Term)

OutcomesEducation

Data(Short amp

Long Term)

Justice Data

Three-Year Window12-Month Window

PERFORMANCE METRICS DATA SHARING and EVALUATION

CalJOBSEmployment

Education Data(Short Term Only)

Long term employment data will come from Employment Development Department Justice Data includes data from San Diego County Probation City Attorneyrsquos Office and DArsquos Office Long term education data will come from the National Student Clearing House



Stronger partnership and deeper insight create the opportunity for continuous improvement of program services


bull Compliance-driven reporting and focusbull Limited understanding of what works for

specific beneficiary populationsbull Limited opportunities for pivoting and course

correctionbull Limited incentives to refine programbull Separate decision making processes

bull Feedback loop-driven reporting and focusbull Better targeting allows insights into services

across different populationsbull More opportunities to understand why

something worksbull Course corrections possible over longer time

framebull Embedded partner collaboration


SDWPrsquos combined contract structure supports providerrsquos cash flow needs while also incentivizing the achievement of long-term outcomes

11

P4P Contracting StrategyService provider is incentivized to achieve long-term employment education amp recidivism outcomes via bonus payments

Outcomes tracked through administrative and program data sources

INDEPENDENT VALIDATION

P4P BONUS PAYMENTS

Fixed-Rate Performance ContractService provider is paid upon achievement of outputs and short-term WIOA measures

OUTPUTS WIOA MEASURES

FIXED-RATE PERFORMANCE

PAYMENTS

LONG-TERM OUTCOMES

bull Youth servedbull Monthly progress

report

bull Placement in jobs or post-sec education

bull Measurable skills gain

bull Employment enrollment in post-sec education rate

bull Median earningsbull Recidivism rate



SDWP uses a ldquorate cardrdquo structure that bases payments on a combination of outputs WIOA measures and longer-term outcomes

Payment structure is designed to maximize enrollment and outcomes payments while ensuring the project is financially sustainable for the Service Provider

Cost Reimbursement Payments

Output Payments ndash Enrollment

Short-term Outcomes Performance Contingent Payments

Long-term Outcomes Performance Contingent Bonus Payments

0

41

28

11

Average Payment Amount for Contract Timeframe

Output Payments ndash Reporting 20

$0

$718000

$495000

$200000

$348000

Percent Dollars



Shift to Outcomes Contracting

Third Sector worked with SDWP to shift the status quo to one of an outcomes orientation with better outcomes for justice-involved youth

Policy implementation traditionally utilizes cost-reimbursement for services delivered or individuals served without incentives for coordination or improved outcomes

Status Quo Approach Outcomes-Oriented Approach

San Diego took advantage of the new DOL enabling legislation Pay for Performance provisions empowering them to focus on harder to reach and longer term outcomes through performance payments

County dollars reimbursed providers for costs instead of measurable outcomes

Dollars reward provider for improved employment education and recidivism outcomes

Services for WIOA-eligible youth did not distinguish between different sub-populations and their distinct needs

Services are focused on 300 justice-involved young adults driving improved outcomes in both workforce and recidivism

Short- and long-term outcomes data on employment education and recidivism will be collected and shared to support deeper insight and continuous improvement

Data was used for monitoring instead of surfacing new insights or identifying problems in the system



Incremental Steps taken by SDWP in itrsquos Youth Workforce Development P4P Pilot



Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda



Questions Comments Ideas


Brooke ValleVice President of StrategySan Diego Workforce Partnership(619) 228-2955brookevalleworkforceorgwwwworkforceorg

Yelena DanzigerDirector and General CounselThird Sector Capital Partners Inc(415) 939-1434ydanzigerthirdsectorcaporgwwwthirdsectorcaporg

Contact Information


This presentation contains confidential proprietary copyright andor trade secret information of Third Sector Capital Partners that may not be reproduced disclosed to anyone or used for the benefit of anyone other than Third Sector Capital Partners unless expressly authorized in writing by an executive officer of Third Sector Capital Partners

Disclosure

Third Sector Capital Partners IncBoston bull San Francisco bull Washington DC

infothirdsectorcaporg | wwwthirdsectorcaporg


APPENDIX


Alignment of Fixed-Rate Performance Contract with Technical Guidelines

In the absence of federal WIOA guidelines on Performance-Based Contracts this project was evaluated for its compliance to the WIA technical guidelines particularly its section on Performance-Based Contracts

Structure

bull Service providerrsquos WIOA budget has been reviewed and approved to ensure that cost of service delivery is reasonable

bull A thorough costbudget analysis was conducted

bull Provider was competitively selected and screened to ensure that it can serves justice-involved youth has the capacity to deliver on specific short- and long-term outcomes and is best fit for the project

bull Documentation for the procurement and selection process is available

Service Provider

bull Payments are earned only with delivery of the agreed upon precisely defined measurable outcome(s)

bull There is no obligation for SDWP to pay the service provider unless satisfactory delivery is achieved unlike cost reimbursement

bull The payment plan is set up so that efficient effective delivery of services would be expected to enhance the margin of earnings in excess of service providerrsquos actual costs while lower performance will yield fewer payments

Payment Plan

bull Payment plan ensures that a large portion of the payments is tied to outcomes rather than outputs and sufficient funds are held back to encourage full performance

bull Design entails sufficient risk to provider to ensure compensation is based on performance and includes payment variants based on participantrsquos risk level to funnel value add to those most in need

bull Payment plan designed based on agreed upon success targets ensures that intervention activities being paid for are responsible for the impact

AuditSince documentation of participant achievement of outcomes is the primary object of auditing a PBC extra care will be taken to ensure provider documents everything in CalJOBS and and keep records in addition to going through numerous verification processes conducted by SDWP an external third party monitor as well as EDD


Alignment of P4P Contracting Strategy with WIOA Federal Regulations

As required by the US Code of Federal Regulations (CFR) Title 20 Chapter V 20 CFR 683500 SDWP has completed a feasibility study to determine its suitability for a WIOA P4P contracting strategy

Target Population

bull Assessed needs of Opportunity Youth in San Diego County identified justice-involved youth as beneficiary population who have high barriers to employment have been traditionally underserved by the workforce board and meet WIOA Title I Out-of-School Youth requirements

Performance Reporting amp Validation

bull Determined outcomes and success targets that will be tracked which are based on national and local historical baseline data for education employment and recidivism and will be measured against a pre-determined and agreed-upon baseline

bull Achievement of P4P outcomes will be independently validated (by SANDAG) prior to payment (subject to gaining access to long term employment data)

Intervention amp Service Provider

bull Competitively selected provider (eligible under WIOA sec 122123) who provides WIOA youth training services (as in WIOA sec 129(c)(2)) with intervention structure that is cost-effective for P4P WIOA amp desired outcomes for selected beneficiary population

Structure of Payments

bull Specified fixed amount to be paid to provider based on achievement of agreed upon performance outcomes within a defined timeline P4P outcomes will be independently validated prior to disbursement of funds

bull Contract includes a process to reallocate funds to other activities in the event provider does not achieve outcomes


Agenda

bull Introduction to Outcomes-Orientated Contracts and WIOA P4Pbull San Diego Workforce Partnership Case Studybull Discussion and QampA




BETTER OUTCOMES

SERVICES

POLICY

DOLLARS



spending over time





taxpayer dollars



community

DATA


OUTCOME GOALS






PERFORMANCE METRICS


1

2

3

4

5














Contracting







Intervention

Data

Outcomes




















SERVICES

DATA

DOLLARS


Agenda








OUTCOMES GOALS












OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population













BETTER OUTCOMES

SERVICES

POLICY

DOLLARS



spending over time





taxpayer dollars



community

DATA


OUTCOME GOALS






PERFORMANCE METRICS


1

2

3

4

5














Contracting







Intervention

Data

Outcomes




















SERVICES

DATA

DOLLARS


Agenda








OUTCOMES GOALS












OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population











OUTCOME GOALS






PERFORMANCE METRICS


1

2

3

4

5














Contracting







Intervention

Data

Outcomes




















SERVICES

DATA

DOLLARS


Agenda








OUTCOMES GOALS












OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population























Contracting







Intervention

Data

Outcomes




















SERVICES

DATA

DOLLARS


Agenda








OUTCOMES GOALS












OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population












Contracting







Intervention

Data

Outcomes




















SERVICES

DATA

DOLLARS


Agenda








OUTCOMES GOALS












OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population











Agenda








OUTCOMES GOALS












OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population
















OUTCOMES GOALS












OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population













OUTCOMES GOALS





will be served





OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population














OutcomesEducation

Data(Short amp

Long Term)

Justice Data



CalJOBSEmployment
















11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population























11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population












11




P4P BONUS PAYMENTS




PAYMENTS

LONG-TERM OUTCOMES


report













0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population

















0

41

28

11



$0

$718000

$495000

$200000

$348000

Percent Dollars



















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population



























Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population















Intervention

Data

Outcomes


Contracting



















SERVICES

DATA

DOLLARS





Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population











Agenda







Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population















Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population













Contact Information



Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population












Disclosure




APPENDIX




Structure





Service Provider




Payment Plan








Target Population











APPENDIX




Structure





Service Provider




Payment Plan








Target Population













Structure





Service Provider




Payment Plan








Target Population













Target Population











Documents

Pay for Performance: Implementing an Outcomes …...WIOA Pay for Performance (P4P) Provisions New workforce legislation incentivizes agencies to structure outcomes-oriented “P4P”