Performance-based Funding of Supported Employment for Persons with Severe Mental Illness: Vocational Rehabilitation and Employment Staff Perspectives

  • John H. McGrew
  • Jason K. Johannesen
  • Melina E. Griss
  • Dennis L. Born
  • Colleen Hart Katuin
Regular Article


Vocational rehabilitation (VR) supervisors and counselors (n = 35) as well as supported employment (SE) program managers and employment specialists (n = 26) were enrolled in a 12-month evaluation comparing two models of funding services for persons with severe mental illness: fee-for-service and results-based funding (RBF). Quantitative measures of job satisfaction and preference for funding method were obtained prospectively on a quarterly basis, and SE staff activity logs were collected monthly. Qualitative data were collected using a series of focus groups conducted at the conclusion of the study. Despite recording a substantial increase in semi-annualized VR billing charges when using RBF (45–49%), SE staff expressed less satisfaction with RBF over time. Staff raised concerns about increased financial risks and pressures to achieve job placements under RBF. Vocational rehabilitation staff were consistently more satisfied with RBF, expressing particular satisfaction with perceived effectiveness and the payment authorization process. Both VR and SE staff expressed some reservations about RBF, primarily concerning possible pressures for adverse client selection.


supported employment vocational rehabilitation performance-based contracting outcome-based payment systems results-based funding severe mental illness treatment outcomes 



No author has any possible financial gain for the findings presented here. Funding for this work was provided by the US Department of Education/National Institute on Disability and Rehabilitation Research, administered by the Indiana Family and Social Services/Division of Disability, Aging, Rehabilitation Services, and the Division of Mental Health and Addictions (contract number 48-04-VF-2680).

Conflict of interest statement There are no conflicts of interest for any of the authors of this paper.


  1. 1.
    Bond GR, Becker DR, Drake RE, et al. Implementing supported employment as an evidence-based practice. Psychiatric Services. 2001;52:313–322.PubMedCrossRefGoogle Scholar
  2. 2.
    Drake RE, Goldman HH, Leff HS, et al. Implementing evidence-based practices in routine mental health service settings. Psychiatric Services. 2001;52:179–182.PubMedCrossRefGoogle Scholar
  3. 3.
    Mueser KT, Torrey WC, Lynde D, et al. Implementing evidence-based practices for people with severe mental illness. Behaviour Modification. 2003;27:387–411.CrossRefGoogle Scholar
  4. 4.
    McGrew J, Bond G, Dietzen L, et al. Measuring the fidelity of implementation of a mental health program model. Journal of Consulting and Clinical Psychology. 1994;62:670–678.PubMedCrossRefGoogle Scholar
  5. 5.
    Becker DR, Smith J, Tanzman B, et al. Fidelity of supported employment programs and employment outcomes. Psychiatric Services. 2001;52:834–836.PubMedCrossRefGoogle Scholar
  6. 6.
    McGrew JH, Griss ME. Concurrent and predictive validity of two scales to assess the fidelity of implementation of supported employment. Psychiatric Rehabilitation Journal. 2005;29:41–47.PubMedCrossRefGoogle Scholar
  7. 7.
    Lehman AF, Goldman HH, Dixon LB, Churchhill R. Evidence-based mental health treatments and services: Examples to inform public policy. 2004. Available at: Accessed October 18, 2004.
  8. 8.
    Drake RE, Torrey WC, McHugo GJ. Strategies for implementing evidence-based practices in routine mental health settings. Evidence Based Mental Health. 2003;6:6–7.PubMedCrossRefGoogle Scholar
  9. 9.
    O’Brien D, Revell G. The milestone payment system: Results based funding in vocational rehabilitation—2005. Journal of Vocational Rehabilitation. 2005;23:101–114.Google Scholar
  10. 10.
    Rapp CA, Huff S, Hansen K. The New Hampshire financing policy. Psychiatric Services. 2003;26:385–391.Google Scholar
  11. 11.
    Morrison D. Use caution with evidence-based treatments in systems of behavioral healthcare. Behavioral Healthcare Tomorrow. 2003;12:37–41.PubMedGoogle Scholar
  12. 12.
    Block SR, Athens K, Brandenburg G. Performance-based funding in an MRDD population. Journal of Vocational Rehabilitation. 2002;17:165–174.Google Scholar
  13. 13.
    Commons M, McGuire T, Riordan M. Performance contracting for substance abuse treatment. Health Services Research. 1997;32:631–650.PubMedGoogle Scholar
  14. 14.
    Kettner P, Martin LL. Performance contracting in the human services: An initial assessment. Administration in Social Work. 1995;19:47–61.CrossRefGoogle Scholar
  15. 15.
    Martin LL. Performance contracting in the human services: An analysis of selected state practices. Administration in Social Work. 2000;24:29–44.CrossRefGoogle Scholar
  16. 16.
    O’Brien D, Cook B. The Oklahoma Milestone Payment System. 1998. Available at: Accessed August 31, 2004.
  17. 17.
    Frumkin P. Managing for outcomes: Milestone contracting in Oklahoma. In: Abramson MA, Kamensky MJ, eds. Managing for Results 2002. Lanham, MD: Rowman and Littlefield; 2001:XX.Google Scholar
  18. 18.
    Gates LB, Klein SW, Akabas SH, et al. Performance-based contracting: Turning vocational policy into jobs. Administration and Policy in Mental Health. 2004;31:219–239.PubMedCrossRefGoogle Scholar
  19. 19.
    Novak J, Mank D, Revell G, et al. Paying for success: Results-based approaches to funding supported employment. In: Revell G, Inge KJ, Mank D, et al., eds. The Impact of Supported Employment for People with Significant Disabilities: Preliminary Findings from the National Supported Employment Consortium. Richmond, VA: Virginia Commonwealth University; 1999:25–42.Google Scholar
  20. 20.
    Bond GR. Supported employment: Evidence for an evidenced-based practice. Psychiatric Rehabilitation Journal. 2004;27:345–359.PubMedCrossRefGoogle Scholar
  21. 21.
    Bond GR, Drake RE, Mueser KT, et al. An update on supported employment for people with severe mental illness. Psychiatric Services. 1997;48:335–346.PubMedGoogle Scholar
  22. 22.
    National Alliance for the Mentally Ill. Treatment Works: NAMI Consumer and Family Guide to Schizophrenia. National Alliance for the Mentally Ill, 1999.Google Scholar
  23. 23.
    Chambless DL, Baker MJ, Baucom DH, et al. Update on empirically validated therapies, II. The Clinical Psychologist. 1998;51:3–16.Google Scholar
  24. 24.
    McGrew JH, Johannesen JK, Griss ME, et al. Performance-based funding of supported-employment: A multi-site controlled trial. Journal of Vocational Rehabilitation. 2005;23:81–99.Google Scholar
  25. 25.
    Koeske GF, Kirk SA, Koeske RD, et al. Measuring the Monday blues: Validation of a job satisfaction scale for the human services. Social Work Research. 1994;18:27–35.PubMedGoogle Scholar
  26. 26.
    Anthony WA. The Principles of Psychiatric Rehabilitation. Amherst, MA: Human Resource Development Press, 1979.Google Scholar
  27. 27.
    Bond GR. Principles of the individual placement and support model: Empirical support. Psychiatric Rehabilitation Journal. 1998;22:11–23.Google Scholar

Copyright information

© National Council for Community Behavioral Healthcare 2006

Authors and Affiliations

  • John H. McGrew
    • 1
  • Jason K. Johannesen
    • 1
  • Melina E. Griss
    • 1
  • Dennis L. Born
    • 2
  • Colleen Hart Katuin
    • 2
  1. 1.Department of PsychologyIndiana University–Purdue University IndianapolisIndianapolisUSA
  2. 2.Supported Employment Consultation and Training CenterAndersonUSA

Personalised recommendations