Association for Public Policy Analysis & Management

Poorer birth outcomes for low-income families is a matter of concern in the U.S. and abroad. Can public-private partnerships expand proven practices that can help mothers and children as well as save taxpayers money? Recent research in this field has found the provision of certified doulas to economically-disadvantaged pregnant women to be effective in reducing cesarean and pre-term births and to be cost-effective as well in terms of reducing Medicaid expenditures. Minnesota is one of a small number of states that partially funds doula care through Medicaid, yet women are underserved.

In this paper, we present a framework of financing the upfront costs of doula services through Pay for Success (PFS) or Social Impact Bonds (SIB). PFS is a new mechanism of impact investment where private investors invest in social programs that have a promise of reducing future costs for governments and are repaid by the government if an independent evaluation finds the intervention to be successful.

We present a comparative study of a PFS project being implemented in the Rajasthan state of India to improve maternal and newborn health to make a case for using private-public financing to provide doula services. We argue that the private investment in the expansion of doula coverage may be economically feasible to the extent that the Medicaid cost savings arising from improved birth outcomes not only cover the cost of doula services but also are sufficient to cover the additional transaction costs associated with the PFS approach.