The “Pay for Success” pilot program aims to proactively support participants to improve the services they receive, prevent crises, reduce the use of emergency medical services and reduce their engagement with law enforcement and the criminal justice system while supporting more effective spending on preventive services.
The $6 million program establishes a public-private partnership model supported by social impact bonds. It is expected to save the state between $1.8 million and $2.6 million each year and will be evaluated annually for effectiveness.
“We are very optimistic, based on successes of similar programs in other parts of the country, that Pay for Success will be very effective at both getting people the help they need and saving public dollars,” said House Majority Leader Christopher R. Blazejewski (D-Dist. 2, Providence). “We know that the status quo results in a small group of individuals experiencing homelessness who become very frequent users of expensive emergency care because they lack preventive care and other services. A public-private partnership model where the service provider is very motivated for success will help keep those individuals in housing and getting the services they need, resulting in a win for everyone involved.”
The program was proposed in separate legislation (2021-H 5788) sponsored by Rep. Liana Cassar (D-Dist. 66, Barrington, East Providence), who introduced it as a budget amendment in 2019.
“Stable housing is a prerequisite for stable health. People need a safe, stable, warm home and a permanent address before they can address any other issues they’re facing. Our homeless community members often face physical, mental or behavioral health challenges, and are often struggling to find employment, recovering from incarceration and repairing relationships,” said Representative Cassar. “The holistic approach of permanent supportive housing — providing housing and access to the social and health services the individual needs to stabilize their life and end the cycle of homelessness— is an economically viable, compassionate and effective public health intervention.”
The state funds will leverage funding through the U.S. Department of Justice and the U.S. Department of Housing and Urban Development and will open up the opportunity to access additional grant funding during the course of the program’s implementation. The multi-agency collaboration funded through this appropriation will include partners from the Executive Office of Health and Human Services, the Rhode Island Coalition to End Homelessness and other frontline agencies currently serving chronically homeless individuals.
A 2017 feasibility study performed by the Rhode Island Coalition for the Homeless identified chronically homeless individuals who were the highest of emergency services, including both medical services and interactions with law enforcement.
That study found it to be 70% less expensive for the state to house someone in that group than to have them using the shelter system, and that the state spends $5.5 million to $7.5 million annually trying to help the population targeted by the program. By intervening with permanent housing and wraparound supportive services, the state could save between $1.8 million and $2.6 million annually, the study found.
The program is expected to increase the housing stability of participants, reduce the number of days per year they spend incarcerated and reduce their use of emergency medical facilities and Medicaid costs.
A similar program began in Denver in 2016, and a majority of participants remained housed three years into the program at the end of 2019.
“In passing Pay for Success, Rhode Island will provide our neighbors most in need with the best possible path to safe and stable housing, while also realizing significant savings. Rhode Island spends millions each year systemically trying to end chronic homelessness, yet the rate keeps rising fast. On any given night, 357 Rhode Islanders will be chronically homeless (over a hundred more people than 2020). The vast majority of people experiencing homelessness in Rhode Island are not facing chronic homelessness. For those who are, permanent supportive housing is the most proven intervention. The model demonstrates a nearly 90% reduction in shelter days alone. Now Rhode Island will have 125 more permanent supportive housing vouchers, plus about $1 million for the program in federal funding. This change comes at a critical time,” said Kristina Contreras Fox, Senior Policy Analyst at the Rhode Island Coalition for the Homeless, which advocated strongly for the bill.