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Samantha Sears

Behavioral Health Policy and Practice Intern

Federal Social Impact Partnership May Yield Social Savings

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A little-known provision in the recent budget deal included new federal funding for social impact bonds (or pay-for-success contracts) that are meant to spur innovation and lower government spending. Social impact bonds are financing program contracts where privately funded initiatives receive government spending only if the program achieves its targeted outcomes. Social impact bonds are used in behavioral health care to improve clinical outcomes, yield savings and share risk in financing new approaches to treatment.

The FY 2018 omnibus budget deal appropriated $100 million in new money for social impact bonds, providing state and local governments an opportunity to enter into new social impact bond programs that could involve health care spending like Medicaid. These “pay-for-success contracts” are designed to yield long-term potential savings for the federal government leading to better allocation of funds to social services including behavioral health programs.

Also created in the deal was the Federal Interagency Council on Social Impact Partnerships and the Commission on Social Impact Partnerships, which supervise bonds between the federal government and public services.