A service is a state- or locally-implemented intervention (treatment, program, or practice) that attempts to affect one or more outcomes (e.g. reducing recidivism or hospitalization, increasing employment).
A benefit-cost analysis is a systematic approach to determining the cost effectiveness of alternative services or policies by comparing expected benefits to expected costs. The comparison statistic is a benefit-cost ratio. This ratio represents anticipated benefits to state residents for every dollar in cost to deliver the service. Future benefits and costs are adjusted in recognition that a dollar today is more valuable than a dollar in the future. Colloquially, the ratio means "for every dollar invested in this service, there are X dollars in benefits."
Benefits accumulate from successful public services that lead to better outcomes for participants. In the benefit-cost ratio, these are split into two groups: taxpayer and other societal. Examples of taxpayer benefits are avoided costs to state and county systems. Other societal benefits accumulate to Minnesota residents. These benefits vary depending on the policy area. For example, when there is reduced crime there are less crime victims and expenses. When adults with mental illness receive effective services, research shows improvements in labor market outcomes, which are considered other societal benefits in this analysis.
Yes, to the extent that adequate data is available, the Results First model can differentiate between benefits realized by state, local, and federal taxpayers, participants, and other beneficiaries. The model also provides information on the estimated timing of benefits.
Yes. The Results First framework uses findings from multiple rigorous evaluations for each service and practice. Each of these evaluations is sophisticated in their own right, as is the process for summarizing their findings and incorporating them into the benefit-cost model. The analysis may include local evaluations, assuming they meet a set criteria of rigor.
For more information and the technical documentation visit Washington Institute of Public Policy (WSIPP): http://www.wsipp.wa.gov/BenefitCost