Governor’s Commission on Innovation, Efficiency, and Transparency The Pew-MacArthur Results First Initiative: Investing in Programs that Work v Governor’s Commission on Innovation, Efficiency, and Transparency October 25, 2013

The Policy Challenge While we talk about making strategic choices, the budget process relies on inertia and anecdote Very limited data on: What programs are funded What each costs What programs accomplish How they compare

The Solution: Bring Evidence Into the Process Target funds using rigorous evidence Stop funding ineffective programs Ensure programs are implemented effectively Achieve dramatic improvements without increased spending

The cost-benefit analysis approach Long-standing approach to policy analysis Widely used in the private sector Increasingly used by states Goal: Assess whether a program generates enough benefits to justify funding

States are increasing use of CBA Report found number of studies done by states is growing significantly each year States are increasingly mandating that studies be done States are using results in policy and budget processes This first-of-its-kind study measures states’ use of cost-benefit analysis. The approach compares the expense of public programs to the returns they deliver, enabling policymakers to direct limited dollars toward the most cost-effective programs and policies while curbing spending on those that have proven to be ineffective.

1 2 3 Use the best national research to identify what works Predict program impacts in your state 3 Calculate and compare long- term costs and benefits

Step 1: Conduct a Program Inventory Identify the programs currently provided in New Hampshire and the population that is served by those programs Identify the current funding for programs Assess whether the programs are evidence-based Determine if programs are being implemented according to design

Step 1: Inventory Programs POLICY/PROGRAM COST LONG-TERM BENEFITS COST/BENEFIT RATIO Intensive supervision (only) $4,140 -$578 -$0.14 Mental health court $2,935 $20,424 $6.96 Community drug treatment $1,602 $17,711 $11.05 Correctional education in prison $1,128 $21,426 $19.00 Work release $661 $7,117 $10.77 Cognitive behavioral therapy $412 $9,695 $23.55 Community job training & aid $135 $5,501 $40.76 JUVENILE PROGRAMS Functional Family Therapy $3,262 $70,370 $21.57 Aggression replacement training $1,508 $62,947 $41.75 Coordination of services $395 $13.94 Scared Straight $65 -$4,949 -$76.35 *Washington State 2012 dollars

Step 2: Identify Program Costs Identify the costs of serving persons in each program Include direct and indirect costs Calculate marginal costs for each program

Step 2: Identify Costs Intensive supervision (only) $4,140 -$578 POLICY/PROGRAM COST LONG-TERM BENEFITS COST/BENEFIT RATIO Intensive supervision (only) $4,140 -$578 -$0.14 Mental health court $2,935 $20,424 $6.96 Community drug treatment $1,602 $17,711 $11.05 Correctional education in prison $1,128 $21,426 $19.00 Work release $661 $7,117 $10.77 Cognitive behavioral therapy $412 $9,695 $23.55 Community job training & aid $135 $5,501 $40.76 JUVENILE PROGRAMS Functional Family Therapy $3,262 $70,370 $21.57 Aggression replacement training $1,508 $62,947 $41.75 Coordination of services $395 $13.94 Scared Straight $65 -$4,949 -$76.35 *Washington State 2012 dollars

Step 3: Predict and Monetize Outcomes Taxpayer benefits (avoided costs) Costs per felony conviction Convictions avoided per participant Other benefits throughout system Victimizations avoided per participant Victimization benefits (avoided costs)

Assess full program outcomes Taxpayer outcomes Avoided cost of delivery of services and programs Societal outcomes Avoided costs incurred of crime victims Tangible costs (e.g., lost wages, health care) Intangible costs (e.g., pain and suffering) Estimates based on medical records, insurance claims, and court judgments

Meta-analysis of Functional Family Therapy Recidivism Rate RECIDIVISM RATES REDUCED BY 22% Without FFT (actual baseline) With FFT Follow-up Years Source: Washington State Institute for Public Policy

Cost-Benefit of Functional Family Therapy BENEFITS PER FAMILY WA STATE 2010 DOLLARS MAIN SOURCE OF BENEFITS Reduced crime $31,745 Lower state & victim costs Increased high school graduation $5,686 Increased earnings Reduced health care costs $307 Lower public costs Total Benefits Per Family $37,739 Cost Per Family $3,190 Net Present Value $34,549 Benefits Per Dollar of Cost $11.86

Cost-benefit of Nurse Family Partnership BENEFITS PER FAMILY WA STATE 2010 DOLLARS MAIN SOURCE OF BENEFITS Reduced crime & abuse $6,611 Lower state & victim costs Educational gains $17,770 Increased earnings Reduced public assistance costs $5,944 Lower public costs Total Benefits Per Family $30,325 Cost Per Family $9,421 Net Present Value $20,904 Benefits Per Dollar of Cost $3.23

Step 4: Compare Costs and Benefits Across Program Portfolio POLICY/PROGRAM COST LONG-TERM BENEFITS COST/BENEFIT RATIO Intensive supervision (only) $4,140 -$578 -$0.14 Mental health court $2,935 $20,424 $6.96 Community drug treatment $1,602 $17,711 $11.05 Correctional education in prison $1,128 $21,426 $19.00 Work release $661 $7,117 $10.77 Cognitive behavioral therapy $412 $9,695 $23.55 Community job training & aid $135 $5,501 $40.76 JUVENILE PROGRAMS Functional Family Therapy $3,262 $70,370 $21.57 Aggression replacement training $1,508 $62,947 $41.75 Coordination of services $395 $13.94 Scared Straight $65 -$4,949 -$76.35 *Washington State 2012 dollars

Results First Work in States

Washington State’s Long-term Success 15+ years of using approach to help steer budget decisions Have achieved better outcomes at lower costs LOWERED CRIME RATE and achieved $2.7 BILLION in higher long-term benefits

Juvenile Crime Reduction Benefits Change since 1990 in the U.S. and Washington State 1991 1993 1995 1971 19991 2001 2003 2005 2007 2009 Washington State 67% lower United States 49% lower In 2003, Washington begins “full fidelity” implementation In 2000, Washington begins evidence-based Juvenile Justice program Source: Washington State Institute for Public Policy

Participation in Results First HI WA TN MT OR ID WY CO UT NV CA AZ NM NE KS OK TX ME ND SD MN LA AR MO IA WI MI IL IN OH PA NY WV KY MS AL GA SC NC FL VA AK VT NH MA RI CT NJ DE MD AK

What are Results First states doing? 3 enacted legislation incorporating Results First into their policy making process 2 used models to analyze legislation, avoiding millions in potential costs 5 3 – CT, MA, VT 2 – IA, IL 5 – NM, IA, MA, NY, VT used their models to target $28 million in funding

New Mexico Legislative Finance Committee leads initiative, expanding into agencies Implemented Results First in all available policy areas Innovative “Cost of Doing Nothing” report found $360M in recidivism-related corrections costs over next 15 years Used Results First model to target $17M for evidence-based programming in early education and criminal justice $360M is budget costs, not taxpayer or societal costs

Iowa Housed in the Departments of Corrections and Human Rights Found state’s domestic violence treatment program was ineffective Replacing with new program to achieve higher ROI Used model to analyze sentencing reform proposals

New York Used model to develop Governor’s public safety budget Referenced in 2013 State of the State Address Restructuring $11.4M in Alternatives to Incarceration funds to prioritize cost-effective programs $5M allocated through competitive grant process incorporating cost-benefit analyses

Mississippi Legislative PEER Committee implementing model Very strong legislative leadership support Using approach to re-energize performance budgeting system Currently assessing criminal justice and education programs

Vermont Legislative Joint Fiscal Office began initiative Legislatively established the Criminal Justice Consensus Cost-Benefit Working Group to expand the Vermont Results First model Used analysis to cut funding to inefficient correctional education program

Results First can be used to analyze many policy areas Criminal Justice K-12 Education Early Education Child Welfare Substance Abuse Mental Health Prevention Programs

What does it take to become a Results First state?

State Selection Criteria Commitment to evidence-based decision making Ability to provide necessary data Willingness to dedicate resources State Selection Criteria 1 2 3

The Role of Partner States Secure leadership support Appoint a policy work group Establish a staff work group with project manager Collaborate with Results First to strengthen the model and build a learning community of states

Services provided by Results First Provide software Train staff in the approach Provide ongoing technical assistance Help interpret results for policymakers Compile and share lessons learned with other participating states Expand and update model No charge for Results First services

Goal – Dramatically improve outcomes by: Using Evidence Fund programs that are proven to work (and cut those that don’t) Programs must be properly implemented Must target the right people Compare outcomes to predictions Require new programs to prove success Ensuring Program Quality Tracking Results

This approach should drive the system Appropriations (investment advice) Research (test new programs) Implementation (ensure fidelity) Oversight (monitor outcomes)

Contact: Gary VanLandingham Director gvanlandingham@pewtrusts.org www.pewstates.org/ResultsFirst