In the new PbR culture, just like in the Premier league, it’s results wot count. However, one of the difficulties that is starting to occupy the minds of commissioners is that, unlike in sport, even initiatives targeted at the most intractable social problems start with some points on the board. No commissioner wants to pay for outcomes that would have happened anyway.
For example, the re-offending rates for short-term prisoners in particular are a huge social concern; the latest figures from the Ministry of Justice (for the first quarter of 2008) show that 61.1% of offenders serving prison sentences of less than 12 months are reconvicted within one year of release. Nonetheless, it’s pretty obvious that almost two out of five are not reconvicted. The MoJ does not want to pay those providing rehabilitation services for these successes and that is why it prefers to pay for results which reduce the overall reoffending rate for a cohort of matched offenders.
However, it is not always so simple. The draft PbR outcomes for drug treatment highlight reduction of offending as a key domain for payment. Drugscope and the UK Drug Policy Commission, along with other commentators, make the point that we have good evidence to suggest that just engaging with the treatment provider in itself produces a reduction in offending behaviour – irrespective of the quality of the service provided. One of the key reasons for this is that drug using offenders tend to make contact with treatment services either when they are motivated to change or when they are facing a likely prison sentence (they are often contacted directly by the Drugs Intervention Programme in police cells). Of course, for some of these clients the reduction in reoffending is temporary as they fall out of treatment again. For others, engagement in treatment may be the first step to permanent abstinence and the end of an offending career. The challenges of allowing for all these permutations in a PbR contract are substantial – especially since most drug using offenders will enter and exit treatment many times over several years. Which treatment episodes count in which PbR contract years will be another difficult-to-define issue.
All this makes me wonder why professional footballers so frequently have bonus payments written into their contracts for the number of goals they score in a season. Why would Manchester City pay Sergio Aguero £200,000 per week and then stump up extra every time he hits the back of the net? As always, what the professionals do is mimicked on a Sunday morning up and down the country. My 12-year-old son, Charlie, plays for the mighty Upminster Park Rovers and I’m amazed at how many dads offer their sons a fiver if they score as a way of geeing them up before a match. Versed in the ways of PbR, I don’t pay Charlie for scoring and have saved almost 500 quid over the last four seasons. Charlie, of course, scores goals because he really, really wants to and derives tremendous pleasure from doing so.
In the same way, the main reason that tens of thousands of drug and alcohol workers, probation officers and others turn up to work everyday is their satisfaction at helping individuals change for the better. If PbR mechanisms can truly reward their aspiration, then ‘Thou shall only pay by results’ will be a worthy 11th commandment.
Hi Russell,
I enjoyed this. I think you are starting on a different important topic, the distinction between organisational incentive and incentives for front line staff. PbR can make organisations more effective by getting them to focus on evidence, track what actually works, and getting them to actually stop doing what doesn’t (which can often be painful and therefore occasionally tempting to leave in place). We would argue you dont even need an organisation to have PbR in it’s contract, if it knows that it is funded by an entity who only receives outcomes payments it understands that this entity will require it to measure what works and will have a much more intense interest in their effectiveness.
This is all distinct from PbR for front line staff. Here you run several dangers. Firstly of creating a perverse incentive (lots of children hanging around the goal and not playing for the team for example!), when dealing with vulnerable service users this can be quite dangerous. Secondly of distracting people from their work and adding pressure in what can already be quite intense environment. There is quite a good educational cartoon on this o the RSA website (they do excellent educational videos around the evidence in certain areas, have a look at the one on performance based pay). Thirdly it implies that people doing the work ought to be motivated by money. As you rightly point out, the best people for this work are motivated by…. Helping service users.
For me this is an important distinction to make in part because I fear people will mistake an interest in implementing PbR for organisations as a wish to implement performance based pay for frontline staff.
Drug treatment is now covering Cannabis users with court order DRR’s. The vast swath of Cannabis users have no ‘dependant’ issue at all. This is a huge waste of money and only reinforces the individuals poor view of the law and drug treatment services. If the individual does not consider his or her ‘offence’ to be moral and thinks the law is wrong, immoral or ineffective then they will reoffend.
I don’t think this element is considered enough in drug treatment services.
It is an important discussion so well done for setting up the blog. PBR is a potential minefield of technical details that have yet to be fully explored but will certainly require more and better databases and case management systems and even then will have unforeseen consequences. But the aspect that concerns me most is the likely introduction of a large contracting organisation between the commissioner( whoever they are) and specialist drug treatment providers (mostly who they are now) who can carry the financial risks of delayed payments on recognition of assured results. This will be an additional cost and given that they are taking the risk and leading the negotiation likely to be a significant slice of the contract no less than %10 more likely %20. The pbr contracts will encourage efficiency for sure but stripping 20% out of treatment budgets would leave a pretty threadbare system. Thats my concern but am I just drumming up a phantom spook that isn’t really there?
Hi Ian
I think yours is a very real concern – and one clearly shared by Polly Toynbee in her series of articles in the Guardian. The latest one is here: http://bit.ly/nEdDHa
Thanks for joining the debate
I’m not sure that the premise is right – that you shouldn’t pay for results twice. People think it is wrong, and it is certainly unfair to do it, and probably (but not necessarily) inefficient, but if payment is by results, then the bigger premise is that it doesn’t matter how those results are achieved. If you get better results than otherwise by paying for that result 20 times (as unlikely as that may be), then so be it. It may be that the effect of the incentive in the system is of greater value than the cost of the unfairness and inefficiency of paying more than once.
PbR has the potential for unfairness built into it – that potential can be cut down on and minimized, but it can’t be eradicated. The logic is that the unfairness is outweighed by the value of the outcomes – a necessary evil. For example there is no way that we can be assured that a behavioural outcome is delivered only as a result of contact with organisations being paid under the PbR deal. So people can get paid for things they haven’t done, and others may not get paid for things they have done that others are getting paid for. But we accept that unfairness as a necessary cost of achieving the outcome. It’s inherent in any system where people and outcomes are involved. For example, you pay an estate agent a commission if they sell your house by getting viewers to put in offers – but offers probably get prompted more on the basis of how you come across to the buyer, whether you’ve tidied up that morning, whether it was sunny, whether the buyers had a nice lunch before viewing, whether they’d gotten over an argument etc. No-one comes in and evaluates how much of the commission should go back to you, or to Pret a Manger, or Relate. We just pay the estate agent because we have to if we want our house sold. There are obvious parallels in the criminal justice world – is it the influence of a rehabilitation programme, or someone’s mum or friends, who finally deliver a turnaround in behaviour? And we might be paying twice – is it the rehabilitation programme on the PbR deal, or the DIP service on a traditional contract, or the empathetic prison officer on the wing? As long as the existence of the rehab service can reasonably be said to be leading to a desired level of increase in overall outcomes though, then I think we have no choice but to accept the odd one here and there which is down to someone else and pay up. At least everyone’s getting paid, and everyone’s happy with the outcomes. Duplication in payment for the same outcome isn’t really duplication – it’s simply paying the organisations that are necessary in the system. It only becomes duplication if you have two organizations systematically doing the same thing and you’d get largely the same results if you only had one of them.
What I do find interesting within this is how the idea of PbR has become inherently linked to ideas of private investment, and the private sector. As I have just done above with estate agents, we seem to try to base our thinking on systems which are in the private realm and not in public services. I think there is a key point in here about the difference between payment by results in public services, and the social investment models which have become attached to the concept. They are linked for good reason, not least that investment scrutiny gives a framework for measurement and a reason to measure well, and also to fill in the ‘working capital gap’ problem that deferred payment creates. But they are separate concepts. The idea that if an organisation claims to reduce re-offending and demands taxpayers money to do so, it gets paid on the basis of whether or not it does actually reduce re-offending; is quite different to the idea of public service providers sometimes being subcontractors to vehicles for private investment.
I think we need a new way of thinking that is based in public service ethos, not one that assumes that a PbR framework, or a social investment framework for that matter, will lead to behaviour usually observed in the private sector. Your footballers question I think I can answer – footballers are individuals highly self-motivated to score goals, but they are also notoriously money and ego-centric – their bonus payments are reward and recognition, not incentive – it keeps them at the club and keeps them happy. Public servants aren’t like that. However, professional public servants are also not wholly motivated by some saintly selfless desire to do good, very few of them anyway, and not on a day to day basis. We often make mistakes based on this assumption – motivation to help others is usually (but by no means always) one of the reasons why people go into public service, but it’s part of a package of motivation topped by what’s best for you, not for others. A bigger motivation is likely to be the job that is best placed for you pay the mortgage according to your skillset – this is particularly true for the frontline. But it doesn’t mean you’re not motivated by the needs of others or that you’re not a brilliant caring public servant, and it hardly makes someone worse at their job than someone who could be Bill Gates but has for selfless reasons chosen to be a care assistant. Apologies for the geekiness of my next statement but the best analysis I know of motivation in public service is Julian le Grand’s classic knights and knaves concept. Both (selfless and selfish to generalize) tendencies exist, knaves are not bad, just as knights are not inherently good, and both are necessary. The concept attempts to explain why motivation in public services is different to motivation in the private sector. Where we have hybrid models of public service delivery delivering outcomes which also generate profit for non public servants, that will be interfered with. I take Toby’s point that organizational and individual incentive are different, but introducing PbR and investor motivations into the picture will change the knights and knaves balance anyhow, and each concept probably in different ways. You might expect PbR to appeal to knights, and social investment to appeal to knaves, but I don’t know. Of course there are well-established models of private sector public service delivery (Serco, G4S etc.) but the social investment angle is new again, and PbR isn’t this at all. We need to know how the change in incentive on non-private and private sector organizations and individuals will affect organizational and individual motivation in public service delivery, without simply making naïve free-market-behaviour-type assumptions.
Although the PBR is about getting payment for each individual through treatment successfully this doesn’t have to be about incentivising individual staff anymore than it is at the moment. The financial model that will be used will be more like insurance- where a known population is assessed for risk. The chances of any one specific individual succeeding are difficult to pin down but a population of 1000 going through treatment will have fairly predictable results so the incentive will be on getting large volumes engaged and through treatment. Certainly one would pay a premium salary for staff who are quick, team players with good communication and good judgement, are flexible in response to a range of different needs and can inspire and motivate others. They are probably getting a premium salary already because employers always want to get staff like that.