Structuring and Operating Rhode Island’s First Pay for Success Program

In State Fiscal Year 2022, the Rhode Island legislature appropriated $6 million in state funds for outcome payments in Rhode Island’s first-ever social program to be financed via a Pay for Success (PFS) model. Rhode Island’s PFS initiative centered on launching a statewide permanent supportive housing (PSH) program as a means of enabling 125 Rhode Island residents with histories of chronic homelessness and exceptionally high healthcare utilization and justice-involvement to find and maintain stable housing.

Joy Street Consulting was brought in by the Rhode Island Coalition to End Homelessness to first, lead the transaction structuring needed to launch the program, and then, provide leadership and management for day-to-day program operations and longer-term program planning. Key tasks included but were not limited to: first, convening stakeholders and subject matter experts to determine the quantitative outcome measures that would define program “success,” engaging service provider agencies and an independent evaluator via open procurement processes, engaging private investors, developing and communicating quantitative financial and outcome models, and writing all contracts, and then, leveraging a data-driven, hands-on, collaborative management approach to ensure that PFS service provider agencies could meet outcome targets despite numerous obstacles to success. Joy Street also led all reporting to state-level oversight committees and national-level evaluators.

PFS has yielded promising results so far. For example, per the Year 1 independent evaluator report, housed clients in the program had demonstrated an almost 20% decrease in Emergency Department visits and an almost 40% increase in “days in community” (inverse of “days incarcerated”) by the close of the first year. The program has also had a profound impact on the lives of numerous clients, as highlighted in the Client Stories write-up available below.