Massachusetts Pay for Success Initiative to Reduce Chronic and Long-Term Homelessness Exceeds Housing Goal, Leads to Ground-Breaking Systemic Change
November 9, 2021
BOSTON – As the region grapples with the complex public health and homelessness crises associated with growing encampments, the first-in-the-nation Pay for Success (PFS) initiative designed to reduce chronic and long-term homelessness among adults has significantly exceeded its target, successfully placing over 1,055 high-need individuals into stable, supportive housing, with 85% retaining housing or transitioning to an appropriate care setting.
According to a report released today by housing advocates and funders, these achievements, driven by a unique social innovation financing (SIF) model, have demonstrated the efficacy of low-threshold permanent supportive housing— which combines barrier-free affordable housing with intensive case management services to meet the needs of individuals with complex medical conditions—as a solution to homelessness.
Low-threshold permanent supportive housing allows participants to address their often-complex health issues more easily and effectively than they would on the streets or in shelters. According to a 2020 report sponsored by the Blue Cross Blue Shield of Massachusetts Foundation, individuals housed through the Pay for Success partnership saved an average of $5,267 in total health-care costs per year.
“This national model does much more than just save money,” said Joe Finn, President and Executive Director of the Massachusetts Housing & Shelter Alliance (MHSA.) “Without question, housing dramatically alters how a person utilizes our healthcare system. The availability of safe, stable housing minimizes the use of emergency rooms and the amount of time patients who formerly experienced homelessness spend in acute care.”
Launched in June 2015 and led by the Massachusetts Alliance for Supportive Housing (MASH), the MASH Pay for Success Initiative to Reduce Chronic and Long-Term Homelessness represents a partnership between the Commonwealth of Massachusetts, the Massachusetts Housing and Shelter Alliance (MHSA), the Corporation for Supportive Housing (CSH), Santander Bank, N.A., the United Way of Massachusetts Bay and Merrimack Valley, and a statewide network of housing and service providers. MASH acted as an intermediary to administer the MASH PFS program, report on program metrics, and sustain robust, cross-sector partnerships. With $2.5 million in seed investment funding from United Way, Santander Bank and CSH, the partnership, overseen by MASH, had an initial goal of housing between 500-800 individuals experiencing chronic and long-term homelessness over six years.
“Supportive housing is a highly effective, cost-efficient strategy, and we have an opportunity to now expand this proven model to youth and families who are equally vulnerable. While we must celebrate this progress, we also have an obligation to not let the work end here,” said Bob Giannino, President and Chief Executive Officer at United Way of Massachusetts Bay and Merrimack Valley. “As we begin the next chapter of this work together, we’re focused on creating a nimble pot of state funding through new legislation that would help meet the complex health and housing needs of our most vulnerable residents and fill in critical gaps. We’re also looking focused on developing a unified, collective strategy to create housing and supportive services for high need/high user populations to save lives and public resources.”
The MASH PFS initiative leveraged a mix of philanthropic contributions and private investor capital from Santander Bank, CSH and United Way to provide upfront funding for housing and supportive services. Under this innovative financing model, if the original goals of the MASH PFS initiative were met, the state government would compensate investors for undertaking the investment risk. If the goals were not met, the state government was not obligated to repay investors.
“Santander Bank is committed to increasing access to affordable housing in our communities,” said Seth Goodall, Executive Director of Corporate Social Responsibility at Santander US. “Public-private partnerships, like the Massachusetts Alliance for Supporting Housing, allow key stakeholders to work collaboratively to create innovative solutions for housing security in the Commonwealth. Santander is proud to be a part of the solution alongside our partners.”
An independent evaluator, Root Cause, was engaged to determine whether the MASH PFS initiative achieved its goals. Performance-based payments to provider agencies were also issued and paid out at every milestone.
Individuals in the MASH PFS initiative are high utilizers of costly acute care services, emergency rooms, and shelters, and many have experienced homelessness for years. To break this cycle, the model focused on providing permanent, low-threshold supportive housing through a network of 18 homeless service providers located across the Commonwealth to those who would otherwise rely on expensive emergency resources.
In the six months prior to securing supportive housing, the individuals now housed through the Pay for Success initiative had accumulated, in total:
- 78,260 nights in emergency shelter
- 4,713 days in the hospital
- 1,881 emergency room visits
- 1,395 nights in detox
- 880 ambulance calls
According to the report released today by the Massachusetts Housing & Shelter Alliance, United Way of Massachusetts Bay and Merrimack Valley, and the Corporation for Supportive Housing, the partnership has led to ground-breaking systemic changes such as:
- Expansion of supportive services through Medicaid (MassHealth): MassHealth funding for supportive services can provide a flexible funding stream for providers to underwrite staffing and coordinated care. As a result of the MASH PFS partnership, this funding is now available to all eligible individuals experiencing chronic homelessness who are insured through MassHealth.
- Broadened service eligibility: Participants were selected based on criteria such as past use of acute care services and medical diagnoses instead of eligibility requirements involving a strict “chronic homelessness” definition. This allowed providers to house the individuals who would benefit most from MASH PFS housing and coordinated services.
- Increase in low-threshold vouchers: The Commonwealth of Massachusetts made 145 low-threshold housing vouchers available to the Pay for Success partnership for individuals who may struggle to meet eligibility requirements for traditional rental assistance programs.
- Demonstrate the power of collaboration: The MASH Pay for Success partnership has effectively demonstrated the value of cross-sector collaboration in solving complex problems. MASH brought the public, nonprofit and corporate sectors to the table and will continue to advocate for the expansion of permanent supportive housing for individuals, families, youth, and young adults experiencing chronic and long-term homelessness.
MHSA President & Executive Director Joe Finn said, “MASH PFS confirms what we have long believed. Successful outcomes can be achieved, and lives changed, when agencies and organizations work together around a shared goal.”
Providers in the Pay for Success initiative included Action Inc., Bay Cove Human Services, Boston Public Health Commission, Commonwealth Land Trust, CSO/Friends of the Homeless and Mental Health Association, Duffy Health Center/Housing Assistance Corporation, Eliot Community Human Services, Father Bills & MainSpring, Heading Home, Hearth Inc., Homestart, Lynn Shelter Association, Metro Housing Boston, New England Center & Home for Veterans, Pine Street Inn, ServiceNet and South Middlesex Opportunity Council (SMOC).
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The Massachusetts Housing & Shelter Alliance (MHSA) is a nonprofit organization dedicated to ending homelessness in Massachusetts. Through advocacy, collaboration, education, and innovative program development, MHSA focuses on evidence-based solutions that reduce public reliance on emergency resources and prioritize access to stable housing and individualized support services. MHSA draws on the on-the-ground experience of its almost 100 member agencies from across Massachusetts to inform its advocacy and program development. MHSA’s unique position as an intermediary between public agencies and homeless service providers enables it to create solutions to homelessness that have the greatest impact. For more information, please visit www.mhsa.net.
ABOUT UNITED WAY
United Way of Massachusetts Bay and Merrimack Valley is a leading civic engagement organization dedicated to responding to our region’s most pressing issues like housing stability, economic mobility, healthy child development and educational success. We listen and work with communities to identify areas of greatest need and innovative approaches to address them, and then mobilize donors and corporate partners to provide resources to create positive lasting change. We have a vision and a mandate to empower stronger, more equitable communities, and we have the scale and reach to help. Our deep partnerships with hundreds of nonprofit organizations, state and municipal leaders, and businesses make us the region’s go-to mobilizer to address urgent needs and activate comprehensive, long-term solutions. More information is available at www.unitedwaymassbay.org.