Testing Pay-for-Success Bonds

The article focuses on the plan of U.S. President Barack Obama to test the pay-for-success approach as a financing model for social services. It states that based on the proposed budget for 2012, 100 million dollars are allocated for the approach wherein the government will issue a contract with private-sector organization that issu bond to put up social services. It says that if the organization failed to achieve its performance target the government does not pay the organization. It mentions the benefits from the approach which include improvement of government performance and cost savings, increase social innovation, increase investments in the area of preventive services. It argues that the approach could help reduce federal cost in Supplemental Security Income and Medicaid.