Selling a good idea - with bells on

Sam Magne, Knowledge & Learning Manager at The National Lottery Community Fund looks at a question that lies at the heart of several Social Impact Bonds – If you already have a good idea that works, can a SIB enhance it? She explores the Mental Health Employment Partnership SIB and how this is promoting innovation in mental health. 

The Mental Health Employment Partnership (MHEP) supports people with severe mental health difficulties to find and sustain a job. MHEP seeks to embed employment advisors in mental health teams - helping their service-users to get work as quickly as possible and then providing extended support during employment. This intervention is known as the ‘Individual Placement and Support’ intervention model (IPS), which was originally developed in the US and is accredited in the UK by the Centre for Mental Health.  

To promote the wider adoption of IPS, MHEP (a subsidiary of Social Finance) manages a series of social impact bonds. One of its management functions is to act as a ‘Special Purpose Vehicle’ or SPV. In this case the SPV works to support a Payment by Results (PbR) contract by managing finance flows in line with the terms of the agreement. 

The MHEP special purpose vehicle was set up by Social Finance in 2015. It uses upfront working capital provided by social investors to cover the costs of promoting the IPS intervention model. This transfers risk from both the commissioner and provider to the SPV. The SPV holds and manages capital from social investors who stand to lose their capital if results are not achieved.  

Promoting the intervention through a SIB

Social Finance – the original architects of the SIB tool - set up MHEP with the belief that they could use SIBs to widen adoption of IPS’s approach. They argued that payment by results (PbR) could help make savings to the health system’s funding model and to Local Authorities’ wider services. They also thought it could facilitate a more efficient way of funding them. This would be enhanced by performance managing mental health and employability outcomes together through the IPS model.

PbR contracts often presents financial challenges for voluntary, community and social enterprise organisations (VCSE) and new performance management challenges for commissioners. Knowing this, they also made the case that a SIB’s up front finance could facilitate a gradual shift in IPS services towards such outcomes-based practice. This would happen by reducing the financial risks of PbR for providers, whilst funding MHEP’s performance management, to demonstrate IPS’s value and grow commissioners’ confidence in it.

In this sense, MHEP offers a good idea (-IPS), with bells on (- the SIB’s role in striking a note to trigger payment for success or, in raising an alarm bell to stimulate course-correcting action if performance drops).  MHEP’s outcomes payments for its first 3 SIBs are being co-funded by local commissioners and The National Lottery Community Fund’s Commissioning Better Outcomes (CBO) programme.

The story behind the Mental Health Employment Partnership  

MHEP’s story is the subject of an in-depth study by Ecorys/ATQ as part of the evaluation of the Commissioning Better Outcomes Programme (CBO)  programme. You can read the report here. 

MHEP began its work in Staffordshire and Haringey (commissioned by the local authorities) and in Tower Hamlets (by the Clinical Commissioning Group). Not all MHEP’s commissioners were new to IPS and had existing contracts. Regardless of this, all its providers found the MHEP arrangement a culture shock. At first operations staff had difficulties with the accountability and rigour of the SIB approach. It demanded a step up in their attention to performance targets and more precise measurement of outcomes. 

In response to these difficulties, MHEP brought in IPS specialists and provided a significant level of hands-on problem-solving support. The providers describe this as ‘invaluable’ - even though it has resulted in some stark changes to staffing to get an outcomes-based culture in place. 

The SIB has revealed the fact that although staff were committed to the principle of IPS, this was not enough to achieve outcomes. As the report reveals, managers in the providing bodies said they found that a different mindset was needed to replicate a model like IPS effectively. “Fidelity to get the result, not as a result” was how one provider described the SIB’s focus on adopting and adapting the IPS model to deliver impact. Also, learning to use the model’s ‘manual’ as a guide whilst being flexible enough to respond to local context by using data and evidence more effectively. “It has been a steep internal management learning curve and we feel that we have benefitted from the experience – despite the traumatic parts of the process.”

In addition to the effect of the performance management, the SIB payment model (which involves payment when clients start and sustain a job) also pushes the partnership to focus not only on efficiency, (supporting people as soon as possible) but also on quality (sustained appropriate employment). 

As a result of both the management and finance elements of the SIB, team members report feeling more accountable to clients and less “fuzzy” about IPS’s impact.

A growing programme

MHEP recently developed SIBs for individual placement and support for nine other London Boroughs covering substance abuse and mental health issues. Learning from the first three, MHEP has allowed much more time to set-up and bed-in the delivery teams. They now factor in a period of capacity building to build rapport with host teams and get referrals flowing.  

However, MHEP’s story also provides a cautionary reminder to others that to keep the SIB show on the road it is often about balancing the right quantity as well as quality. Some of MHEP’s first  providers realised that they were over ambitious in their caseload and outcome predictions. That can be especially problematic for SIBs supporting interventions like IPS with an intensive support model and small caseloads. Any changes in numbers have a big effect on a SIB if it is designed to keep the costs of capital low. If caseload volumes are too low then the rate that payments are triggered on outcomes achieved will be low.  This can have the effect of squeezing and even choking both the SPV and providers’ ability to function. 

The final report in the MHEP study will consider how great the impact of the SIB has been on IPS stakeholders and service users in MHEP’s first three regions. As part of this, the report will consider whether MHEP’s ‘bell tower’ included sufficient bells to raise the alarm on external factors affecting the SIB’s operating environment and, to indicate any dissonance between the tunes of IPS services delivered with and without a SIB. It will also examine how far we can conclude that IPS’s impact has been enhanced by the way that the SIB’s performance management function of itself, has worked to ring the changes.