Nonprofit Finance Fund (NFF) spoke with Meals on Wheels America and Quantified Ventures about the Meals on Wheels Pay for Success Project. This blog is part of an interview series with selected project partners from our Social Innovation Fund transaction structuring competition.
NFF: Tell us about the genesis of this Pay for Success (PFS) project. What was the original impetus? Who originally got interested in PFS? How were the stakeholders who have been moving the project forward brought together originally?
Meals on Wheels America: Today, it is estimated that over 10 million seniors are struggling with hunger or food insecurity. Federal funding under the Older Americans Act is declining, resulting in reduced services for those seniors who are most at-risk due to multiple chronic conditions, isolation, low income, and other factors that make it challenging to meet daily nutrition requirements. In addition, we know that inadequate nutrition leads to many subsequent health problems, greater use of hospitals and premature nursing home placement.
To address this, Meals on Wheels’ two million volunteers provide vulnerable seniors with nutritious meals, companionship, and care. Their intervention (daily meal delivery, socialization, and safety check) aims to allow seniors to age healthily in their homes in a safe environment. Sadly, we are meeting only a fraction of the need, and the national senior population is expected to grow from 57 million in 2010 to 112 million in 2050. No other food delivery service has the trust and access afforded to our volunteers, who are invited into the homes of nearly 2.4 million seniors each year, providing valuable access to this vulnerable and isolated population.
As Federal funding for senior services is failing to meet demand, Meals on Wheels America has recognized that its ability to grow and thrive rests largely on its ability to measure and quantify its outcomes to compete for funds. We made it a strategic priority to become a data-driven organization. Through a variety of research initiatives since 2005, Meals on Wheels America has invested in developing the business case for our services. The benefits measured by independent evaluations include reduced utilization of acute care services, reduced falls and fear of falling, improved quality of life, reduced feelings of isolation and loneliness, and an increased ability of older adults to remain in their homes and age in place. This research demonstrates the importance of this intervention on the lives of our nation’s aging population and the caregivers who support them.
Our interest in Pay for Success grew out of our commitment to securing a sustained revenue source to enable local Meals on Wheels programs to meet the growing need for nutrition services among at-risk seniors. Meals on Wheels America, the oldest and largest organization in the U.S. representing the community-based senior nutrition and meal services sector, strives to keep at-risk seniors as healthy and independent as possible by supporting and empowering local Meals on Wheels programs across the country.
Our President and CEO, Ellie Hollander, had previous experience with PFS and was interested in thinking creatively about new and different options to generate revenue sources for Meals on Wheels programs. She met Eric Letsinger of Quantified Ventures, who conducted a feasibility assessment to understand if and how PFS might be a viable option for our network. We engaged Quantified Ventures to consider national implications for PFS funding, and also to help us identify a local program site where we could implement our first PFS project.
Meals on Wheels of Central Maryland is the program we selected for our first PFS project. The PFS intervention encompasses our core three-prong model, which is implemented by local programs across the country, a combination of daily home-delivered meals, socialization, and a safety check. The Meals on Wheels of Central Maryland model builds on the basic safety check by providing minor home repairs and upgrades to improve home safety, thereby reducing the likelihood of falls or other injuries and illnesses. Also, today the most vulnerable among the program’s client base receive case management services, which often results in linking seniors to other community services that further reduce healthcare utilization and premature institutionalization. For this Pay for Success project, we are aiming for every client to have access to a case manager.
Quantified Ventures: When we first met Ellie Hollander and learned about the national Meals on Wheels network and the existing evidence base around the impact of their services on health outcomes and healthcare utilization, we immediately saw this as an opportunity to develop the first PFS transaction in the senior space. We work with private and nonprofit service providers and governments to design and execute PFS projects from feasibility assessment to project close. For the Meals on Wheels project, we were brought on to complete the PFS feasibility assessment and are now helping to structure the transaction.
Meals on Wheels America's organizational will and enthusiasm combined with the existing evidence base of the network’s services made it an ideal candidate for PFS. We were also intrigued by the potential of Meals on Wheels America to scale their services with the PFS model through their nationwide network of providers.
As part of the feasibility study, Meals on Wheels America identified specific criteria to aid in the selection of an individual Meals on Wheels program for this first transaction. A candidate list of programs was identified, individual conversations and webinars were held, and Meals on Wheels America ultimately selected Meals on Wheels of Central Maryland. They were ultimately selected for several important reasons:
- Organizational Readiness - they have incredibly strong organizational leadership and an outstanding Board of Directors, which is critical for exploring PFS. Additionally, they have demonstrated a focus on building strategic partnerships with local health systems, which put them one step ahead of many other potential Meals on Wheels sites because they understand the complexities of health care. They also have advanced data collection and analysis processes in place that can be easily leveraged to meet the needs of this project.
- Size - Meals on Wheels Central Maryland is one of Meals on Wheels America’s largest programs, serving almost 1,500 clients per day in Baltimore City, County, and seven surrounding counties. With a large number of volunteers and committed staff, they are better prepared to serve the increased number of meal recipients that they expect through this project.
- Geographic proximity - it was important to Meals on Wheels America to identify a program within close geographic proximity of its headquarters to navigate the complexities of program and project development. Going forward we intend to use PFS to scale the Meals on Wheels delivery model to meet the pent up need in jurisdictions across the country, where this geographic proximity will be less of a factor in the selection of programs.
NFF: An innovative element of this project is the potential to use Pay for Success as a tool to scale to the over 1,000 Meals on Wheels programs across the country. How are you thinking of using Pay for Success on a national level? How are you sharing the learnings with other programs?
Meals on Wheels America: Because Meals on Wheels America represents a network of local programs across the country, we have a built-in opportunity to scale Meals on Wheels services through a replicable model.
We will be documenting every aspect of our work with Meals on Wheels of Central Maryland as the basis for creating resources and tools for other programs to leverage. In addition, we are already beginning to use our existing communication channels to introduce the concept to our programs. At our recent annual conference in Nashville, Eric Letsinger presented at a session on Social Impact Investing and Pay for Success. Well over 90 local Meals on Wheels programs attended, more than any other session. Feedback on the session was incredibly positive with a lot of intrigue coming from attendees.
Meals on Wheels America will also leverage its education and training channels to conduct webinars and to provide other educational resources. A major part of our organization’s strategy is to help our member programs enhance their systems and infrastructure to be in the position to use PFS to support their programs.
Having access to information on program operations and client health outcomes allows Meals on Wheels programs to communicate their value beyond meal delivery to board members, funders, community partners, and other stakeholders. While some of the more advanced members already have the ability to collect and analyze this data, we haven't aggregated and analyzed this data at the national level. Different state-to-state reporting requirements, local funding requirements, regional diversity in program operations, and varying program capacities make analyzing, aggregating, and sharing this data difficult. In 2014, a Data-Driven Innovation Pilot Project online repository was created by Meals on Wheels America, with financial support from the AARP Foundation, for members to house and analyze program and client health outcomes data. This repository enables members to leverage their collective data across thousands of programs to increase funding opportunities and drive policy change at all levels of government.
NFF: As you know, the road to launching a PFS project is a long one! Can you share with us what the biggest challenge to date has been? How have you and your partners approached this challenge?
Meals on Wheels America: We would say the biggest challenge is the nature of our healthcare system. The healthcare system is so complex and varies considerably across states, regions, and local communities. In addition, the healthcare industry is going through a major, and much needed, transition from fee-for-service to value-based reimbursement, accelerated by the Affordable Care Act. The positive with this transition is the shift in focus from outputs to outcomes, which will be beneficial to local programs. The downside is that there is massive systems-level change going on within health plans and hospital systems.
Quantified Ventures: Getting to the front of the line to secure the focus and bandwidth of decision makers within the health systems is and will be a challenge for some time to come. This project requires substantial data sharing agreements and HIPAA compliance in order for client health outcomes to be collected, shared, analyzed, and reported, all of which makes this a complex effort. Identifying the right champions and decision makers early on, understanding how to work within an established system, and aligning processes are all part of the challenge we have and will continue to face.