USC Price Center for Social Innovation hosts event on LA County’s new pay for success strategy to expand Just in Reach pilot

December 14, 2017

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“We tell the clinicians, ‘Send us your most complex clients. We want the people who won’t get access to these services otherwise,’” said Corrin Buchanan (left), L.A. County’s deputy director of the Office of Diversion and Reentry. (Photo by Tom Queally)
More photos available on Flickr »

By Cristy Lytal

In Los Angeles County on any given day, the number of people in law enforcement custody is a staggering 17,000. Nearly a quarter of these incarcerated individuals also have a mental illness, and many have complex histories of substance use, emergency room visits and homelessness.

To explore how the county is addressing this crisis, the USC Sol Price Center for Social Innovation hosted a discussion on the region’s new “pay-for-success” strategy that greatly expands L.A. County’s Just in Reach program, which aims to reduce jail recidivism as well as homelessness.

Supervisor Mark Ridley-Thomas (Photo by Tom Queally)

Andrea Iloulian of the Conrad N. Hilton Foundation (Photo by Tom Queally)

“Over the next four years, Just in Reach is going to place 300 homeless individuals, who are currently in custody within the county jail and who have serious mental health or substance abuse disorders, into permanent supportive housing,” said USC Price School of Public Policy Professor and Price Center Director Gary Painter.

Held on Nov. 29, the seminar featured introductory remarks from Los Angeles County Supervisor Mark Ridley-Thomas and a conversation with two key architects of Just in Reach: Corrin Buchanan, deputy director of the Office of Diversion and Reentry at the L.A. County Department of Health Services; and Andrea Iloulian, senior program officer for domestic programs at the Conrad N. Hilton Foundation.

USC Price Dean Jack H. Knott introduced Supervisor Ridley-Thomas, a distinguished public servant, scholar and USC alumnus, who funded the original Just in Reach pilot and authored the motion to explore using a pay-for-success strategy to expand Just in Reach.

“Pay for Success, or as I prefer to call it, Invest for Success, is an approach that I have supported since 2012, and is emblematic of the innovations that are occurring every day thanks to public-private partnerships. Let’s use these lessons [from Just in Reach] to expand the reach of many more innovative programs,” Supervisor Ridley-Thomas said. “It can happen right here at the Sol Price Center for Social Innovation, in the Price School of Public Policy. This is critically important work, and [the center is] a part of it. See yourselves as part of the ground floor of Measure H… Innovation ought to have concrete implications and practical application, and to that extent, you’re well on your way to that tonight.”

According to Supervisor Ridley-Thomas, Measure H – through programs like Just in Reach – “will pump as much as $355 million annually into services for those who are severely mentally disturbed, for those who are addicted to substance abuse, for those who are victims of the lack of affordability and the inequities and the economic environment that have caused them to not have the fulfillment in life that they deserve.”

Achieving positive, measurable outcomes

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Price Center Director Gary Painter (Photo by Tom Queally) More photos available on Flickr »

Buchanan and Iloulian described how Just in Reach uses a pay-for-success model, an innovative approach to contracting social services that ties payments for service delivery to the achievement of a predetermined, measurable outcome. In a pay-for-success contract, the payer agrees to repay the investors only when certain predetermined “outcomes” are achieved. Despite the potential loss of investment, the approach is so promising that investors are willing to take on the risk.

Dean Jack Knott (Photo by Tom Queally)

The investors behind the Just in Reach pay-for-success program include the Conrad N. Hilton Foundation and United Healthcare. With this funding in place, L.A. County’s Office of Diversion and Reentry is expanding the Just in Reach program’s key resources: housing and contracted providers who deliver mental and physical health services, substance use treatment and other support for homeless individuals recently released from custody.

If the program achieves its measures of success – reducing recidivism and homelessness – then it will save the county a significant amount of money. The county will then “pay for success” by reimbursing its investors plus interest.

“Usually, there’s a philanthropic funder that takes the lower interest levels that make the finance model work,” Iloulian said. “So the Hilton Foundation actually put in the lower interest capital in order to incentivize other funders to join the table.”

To identify the individuals who can benefit most from the program, Just in Reach relies on referrals from clinicians who deliver health care in jails.

“To be in this program, you have to meet some eligibility criteria,” Buchanan said. “You have to be currently in custody. We are looking for people who are homeless. And we are looking for people who have a complex mental health or substance use disorder. We tell the clinicians, ‘Send us your most complex clients. We want the people who won’t get access to these services otherwise.’”

Though the pay-for-success expansion just launched in October, it has already placed more than 25 individuals into permanent supportive housing. Over the past several years, the L.A. County Department of Health Services has provided similar housing interventions for more than 3,500 individuals through LA County’s innovative Housing for Health division, and they have reason to believe that the expansion of Just in Reach will be successful in reducing both recidivism and homelessness.

“We have a lot of work to do, and we will continue to fight to try to expand our program to reach more people,” Buchanan said. “Having opportunities to scale our work through pay for success is one of the avenues that we’ve been able to do to get there.”