pay for performance bonds n.
Skip this Video
Loading SlideShow in 5 Seconds..
Pay for Performance Bonds PowerPoint Presentation
Download Presentation
Pay for Performance Bonds

Loading in 2 Seconds...

play fullscreen
1 / 11

Pay for Performance Bonds - PowerPoint PPT Presentation

  • Uploaded on

Pay for Performance Bonds. Public Sector Economics Workshop February 13, 2013. Pay for Performance Bonding Overview . Pay for performance bonding context 2011 Pay for Performance Act Pay for Performance Committee Role Responsibilities. Pay for Performance Bonding: Models.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Pay for Performance Bonds' - kaseem-bond

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
pay for performance bonds

Pay for Performance Bonds

Public Sector Economics Workshop

February 13, 2013

pay for performance bonding overview
Pay for Performance BondingOverview
  • Pay for performance bonding context
  • 2011 Pay for Performance Act
  • Pay for Performance Committee
    • Role
    • Responsibilities
pay for performance bonding models
Pay for Performance Bonding:Models
  • Social Impact Bonds – UK
  • Pay for Success Bonds – US
    • Massachusetts
    • Minnesota
  • Goals
    • Increased efficiency and effectiveness of state government programming
    • Performance accountability for service providers
    • Demonstration of financial feasibility that will result in new investment models
traditional contracted services
Traditional Contracted Services




Before or during service delivery

Performance Contracts

+/- 10%, 20%, 30%

Note: Special thanks to Kate Barr and Brian Paulson for use of their graphics.

mn pay for performance pilot program
MN Pay for Performance Pilot Program



State of MN


After validation of outcomes

Third party


pay for performance history context
Pay for Performance:History & Context

2011 Legislative Session – Pilot program created:

  • To demonstrate the feasibility of purchasing outcomes, rather than funding services
  • To expand initial pay for performance work done in the workforce development community
  • To document the value of certain investments in state services
  • To test the feasibility of financing state services with appropriation bonds
pilot program goals what do we want to learn
Pilot Program Goals:What do we want to learn?
  • Do state investments in specific programs create future state savings or increased revenues? Are those savings sufficient to pay for the programs themselves?
  • Are performance-based contracts a feasible way to share risk between the state and service providers and improve the performance outcomes of state investments?
  • Can performance-based contracting using data measurement and analysis be done in a cost-effective and efficient way to improve the outcomes of state investments?
pay for performance program oversight committee role responsibilities
Pay-for-Performance Program:Oversight Committee Role & Responsibilities
  • Identify criteria to select service(s) to include in the pilot program.
  • Identify conditions of performance and desired outcomes for each selected service.
  • Identify criteria to evaluate whether a service has met performance conditions.
  • Review methodology and data needed to calculate the state’s return on investment. Data must include:
    • revenues that would not have been collected without the service.
    • costs avoided by the state by providing the service.
  • Provide other advice or assistance to the commissioner as needed.
pay for performance characteristics of appropriate programs
Pay for Performance:Characteristics of Appropriate Programs
  • Characteristics of successful service areas include:
    • Potential for high net benefits
    • Measurable outcomes
    • High degree of data reliability
    • Relatively quick demonstration of benefit
required return on investment
Required Return on Investment
  • Requires a service provider to generate a return on investment at least equal to:

Note: Cost of provider’s working capital, if needed, will increase the provider’s required return on investment.

  • Third party monitors progress towards goals
  • Evaluator collects data & conducts ROI analysis to determine progress towards meeting contract term
  • As outcomes are achieved, payment is made to service provider.

Year 1

Six months to five years

Year 10

Service provider contracts executed & programs implemented

Contracts executed with third parties, including evaluator

Evaluation design is confirmed

  • RFPs issued for:
  • Evaluator
  • Other third party
  • Service Provider

Six months to ten years

  • Bonds are sold to make payments to service providers
  • Cost savings and revenue increases from service providers’ programs accrue to the state
  • State uses ongoing savings and revenue increases to repay the bonds