Cost-Benefit Analysis Shows Investing in Training for Staff Leads to Better Outcomes - and can Save Millions of Dollars

Posted by Jonah Schennum
July 21, 2017

Over the years, Performance-based Standards (PbS) has gathered anecdotal evidence that when facilities are safer, they also cost less to operate. The Indiana Division of Youth Services, for example, cut in half its workers’ compensation/ disability costs from 2008-2014 (from nearly $700,000 to just over $300,000) and attributed the savings to reduced incidents of violence and staff and youth injuries resulting from participation in PbS. Most recently in Montana, the Pine Hills Correctional Facility was recognized as one of six Work Safe Champions for reducing both staff injuries and workers compensation for the past several years and attributed efforts using PbS to change culture, practices and staff perceptions.

 

To learn more about the relationship between facility safety and cost-effectiveness, PbS partnered with a team of graduate students at the University of Wisconsin-Madison’s (UWM) Robert M. La Follette School of Public Affairs to conduct a cost-benefit analysis using PbS’ national database. The team first needed to identify an intervention to measure and selected staff training as a key contributor to facility safety. Next, the team established a hypothetical facility, selected the Cognitive-Behavioral Therapy (CBT) model as the training intervention and identified indicators of costs and benefits ranging from training expenses to recidivism. The team conducted a Monte Carlo analysis – a powerful statistical simulation used to predict costs and benefits – and found on average a facility that provided CBT training would realize:

• Direct benefits of fewer staff and youth injuries and reduced staff turnover at a savings of $2,600;
• Reduced recidivism, suicide and substance abuse within one year for a savings of about $600,700; and
• Long-term societal benefits over a youth’s lifetime such as increased educational attainment with savings of more than $3 million.

To calculate the savings of fewer injuries and reduced turnover, the analysis looked at the costs juvenile facilities avoid such as medical payments and injury time away from work. Short-term benefits are those that are seen within one year after the youths’ participation in CBT, such as cost savings due to reduced recidivism, substance abuse and suicidal behavior. Lastly, the long-term benefits were defined by the UWM team as accruing over a youth’s lifetime, such as increased educational attainment in the form of a high school degree or other certification – which, along with the other savings listed, lead the team to their $3 million savings estimate.

The calculation models are available for anyone interested in using with actual facility data to assess costs and benefits.

The Monte Carlo simulation compared a hypothetical facility (a 60-bed, all male, public, juvenile correctional facility) that provided CBT training to staff to a same-sized and staffed facility whose direct care staff received only basic correctional training. The simulation included the costs of the training, which usually is an on- or off-site training workshop or seminar, and the opportunity cost of staff time while being trained. In addition to the benefits and savings listed above, the simulation found that almost half of the time a hypothetical facility would realize positive direct net benefits (reduced injuries and turnover) and nearly 100 percent of the time the facility would realize positive short- and long-term benefits – meaning nearly every facility would benefit from the training intervention.

The potential savings calculated by the UWM team lead them to recommend that juvenile correctional facilities invest in CBT training and use tools such as PbS to collect data on different staff training programs to assess benefits.

As with all research, there are limitations. CBT was selected as the training intervention because of the large body of research available that allowed the team to more accurately analyze it for costs and benefits than other training programs. The team was not able to quantify possible benefits such as reduced sexual assault, restraint and isolation use, increased staff productivity and improved reentry by youths into the community due to lack of available research. The team began the work in September 2016 and completed it in December as part of the Cost-Benefit Analysis class.

PbS would like to thank the entire team at UWM and professor David L. Weimer for their interest in PbS, hard work and dedication to this project. The team had many different organizations to choose from to conduct the cost-benefit analysis and said they really were inspired by PbS’ commitment to treating all youths in custody as one of our own and creating a long-term positive impact for society. Interestingly, they also said that PbS was the first choice for every team in the class!

The full text of the cost-benefit analysis is available in the Resources section of the PbS website. This includes the methodology and appendices, which we hope will make this kind of analysis accessible to conduct at any program.