Senate approves Pay for Success legislation

A program that began as a way to encourage private/public partnerships to divert women from prison is being expanded to all state agencies. The full Senate voted in favor of Senate Bill 210 on Monday, creating the Pay for Success Act. State Sen. Roger Thompson is the principal author of the measure, which he describes as a way to create new programs to solve wide-ranging challenges in government without risking public dollars.

“This is a way to encourage innovation without risking public dollars. A private sector entity would be able to enter into a contract to provide a program or services with the goal of achieving a certifiable result. That private entity would have to come up with the cost of this program at the front end. They’re only paid for the services outlined in their contract if they succeed,” said Thompson, R-Okemah. “This is literally a pay for success program that we’ve already seen work in corrections. Now we want to expand this to other areas.”

Under SB 210, once an agency head determines that a contract will result in a public benefit, an agency may contract a private entity to secure up-front capital from private investors to fund a state service or program. In addition to securing private funding, the pay for success contracts must contain a method to secure a third-party to provide status reports, identify a payment schedule, and identify success metrics for a project.

“This is an approach that has been successfully utilized to get substance abuse treatment for women who otherwise would have gone to prison, helping us address Oklahoma’s high incarceration rates. It’s worked—lives have been changed because these women had access to programs they would not have otherwise had,” Thompson said. “I want to see this expanded, not just throughout corrections but in other agencies and services. Again, we only pay for success, and I believe it’s an approach that will bring wide-ranging benefits to our state in a number of areas.”