Evaluation of cost-effectiveness of intensive case management services (October 2012 to July 2017)

The Ministry has an ongoing programme of work to evaluate the effectiveness of employment assistance programmes and services to inform our decisions about the design and funding of them. This includes determining the cost-effectiveness of intensive case management services (ICMS).

In October 2012, we started allocating people to 10 different ICMS to better target assistance to higher-needs clients and client who were more likely to benefit from the service.

The cost-effectiveness of ICMS from a welfare perspective looks at whether intensive case management reduced the time people remained on a benefit and whether any savings to income support costs outweighed the costs of providing more intensive case management.

This initial evaluation of ICMS covers services from October 2012 to July 2017, and measured outcomes for people two to three years after starting the service[1].

[1] The period measured was shorter for people starting in a service after 2016.

Key findings

• This evaluation shows that most, but not all, ICMS delivered between October 2012 and July 2017 reduced the time people spent on a benefit and savings to income support costs outweighed the costs of providing the service.
• By 2017, we saw an overall shift in assistance towards non-jobseekers and those at risk of long-term welfare receipt ie those that had been identified to benefit most from ICMS.
• Intensive case management has the most impact on people in the first six to 12 months after starting the service.
• Services for sole parents were the most cost-effective.
• The additional investment required to deliver ICMS was relatively small in absolute terms over and above the cost of general case management (the baseline). For the main in-house services^[2], the additional expenditure on assistance was between $3.32 and $11.52 extra for each week a participant was in the service (including MSD staff costs, and contract and subsidy payments for employment interventions).

[2] Excluding the trial services (Mental Health Service, Sole Parent Service and WFCM Intensive) and WFCM Integrated (Youth) whose baseline was WFCM General.

Decisions made about intensive case management services

To date, the research has helped the Ministry refine the design and application of some services, and to improve how people are assigned to the services that are expected to help them the most, including:

• the decision to end the Mental Health Employment Service and replace it with Work to Wellness
• the expansion of ICMS to those for whom the services worked (entrenched unemployed) and ending the service for those whom it made no difference (early entrants to unemployment)
• the decision to end the Sole Parent Employment Service as the Work Focused Case Management (General) service was found to be more cost effective
• development of the Service Effectiveness Model to place people into the service most likely to benefit them.

The results of this evaluation were also provided to the Welfare Expert Advisory Group to inform their understanding of the Ministry’s work as they developed their recommendations to Government.

Future research direction

We acknowledge that looking only at welfare costs and benefits is a narrow lens by which to judge the social value of intensive case management. We plan to expand the analysis to include other outcomes in subsequent updates to this report. Work to determine whether ICMS improved participants’ employment and overall income will be completed in early 2020.

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For enquiries about this research, please email research@msd.govt.nz.