Next generation contracting 2.0 with virtual funding pool provisions1
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Transcript of Next generation contracting 2.0 with virtual funding pool provisions1
Next Generation Contracting 2.0
Fiscal Policy Studies Institute
Based on RBA Next Generation Contracting and Virtual Funding Pool Principles developed by FPSI
June 2011
An Approach to Flexible Funding and Integrated, Outcome-Based Contracting
Draft Discussion Outline
Next Generation Contracting 2.0
Fiscal Policy Studies Institute
An Approach to Flexible Funding and Integrated, Outcome-Based Contracting
KEY FEATURES:1. Allows fine tuning of the balance between control and fund flexibility.
Draft 2 June 2011
2. Provides the benefits of "traditional" fund pools for mainstream funding, without the loss of fund identity, and with less accounting and administrative complexity. 3. Promotes partnership/alliance working on both population quality of life and service system performance improvement. Defines funder/contractor partnership for maximizing customer outcomes.4. Makes use of simplified reporting on contract performance using RBA formats and the three RBA measurement categories: How much did we do? How well did we do it? and Is anyone better off? 5. Establishes 3 year rolling contracting (with safeguards) that prevents annual destabilization of service providers.6. Institutionalizes contractor continuous improvement processes.7. Provides funding for contractor management infrastructure.
Service Line Specifications
1. What is the role of the service in population quality of life?
2. Definition of the service
3. Service quality requirements
5. How many people will be served? (and relevant targets)
6. How much of what activities will be provided? (and relevant targets)
7. How well did we do it? and Is anyone better off? measures (The 3-5 most important measures)
4. Key partners & alliance relationships
Fiscal Policy Studies Institute
General Contract Provisions1. The contractor will use a continuous improvement process.
4. The funder and contractor will work as partners to maximize customer outcomes.
5. The funder will work with the funding community to simplify and standardize contracting and reporting requirements.
3. Targets, where used, will be set in relation to a baseline and will be negotiated so as to be fair and useful.
6. General provisions concerning management, due diligence, dispute resolution, termination, and other matters required by law.
2. The contractor will report on progress quarterly using a simplified format: Numbers, Accomplishments & Stories.
Fiscal Policy Studies Institute
Financial Contract Provisions
1. Standard provisions for accounting, financial reporting, audit and general fiduciary responsibility.
4. Provide for rolling 3 year contract with new 3rd year amendment to be negotiated by the end of each contract year.
5. Allow contractor to move funds of less than (10%) of budget between service lines in the interest of more effective services.
3. Provide 10% for management and infrastructure, adjusted for economies of scale.
6. Allow contractor to retain (across contract years) savings in medium/high intensive services to expand prevention services.
2. Specify budget by service line and fund source.
Fiscal Policy Studies Institute
Virtual Funding PoolManaging "as if" funds were pooled: Accountability and flexibility without loss of fund identity
Programs(using health examples)
1a. Health promotion
1b. Immunizations
1c. GP well visits
2a. GP sick visits
2b. Diagnostic testing
2d. Emergency room
3a. Hospital care
3b. Long term care
3c. Hospice care
4. Mgmt Infrastructure
PreventionLow cost
InterventionMed -High cost
Intervention
$ 1,000,000
3,000,000
4,000,000
2,000,000
1,000,000
1,000,000
10,000,000
4,000,000
5,000,000
2,000,000
10,000,000
25,000,000
50,000,000
60,000,000
5,000,000
10,000,000
11,000,000 22,000,000 160,000,000
Tran
sfer
bet
wee
n se
rvic
e lin
es o
r to
new
ser
vice
Transfer savings from deep end to preventionFiscal Policy Studies Institute
Virtual Funding PoolManaging "as if" funds were pooled: Accountability and flexibility without loss of fund identity
Programs(using health examples)
1a. Health promotion
1b. Immunizations
1c. GP well visits
2a. GP sick visits
2b. Diagnostic testing
2d. Emergency room
3a. Hospital care
3b. Long term care
3c. Hospice care
4. Mgmt Infrastructure
PreventionLow cost
InterventionMed -High cost
Intervention
$ 1,000,000
3,000,000
4,000,000
2,000,000
1,000,000
1,000,000
10,000,000
4,000,000
5,000,000
2,000,000
10,000,000
25,000,000
50,000,000
60,000,000
5,000,000
10,000,000
11,000,000 22,000,000 160,000,000
Tran
sfer
bet
wee
n se
rvic
e lin
es o
r to
new
ser
vice
Transfer savings from deep end to preventionFiscal Policy Studies Institute
