David Wilkinson, the director of the White House Office of Social Innovation, speaking at the Old State House about a new Pay for Success initiative to help parents with drug problems. Behind him, from left to right, are Hartford Mayor Luke Bronin, Director of National Drug Control Policy Michael Botticelli, Gov. Dannel P. Malloy and U.S. Sen. Richard Blumenthal. (STEVE MAJERUS-COLLINS / CTNewsJunkie)

The state is launching a $12.5 million public-private initiative to help parents overcome substance abuse problems that often rip families apart and land children in foster care.

The Connecticut Family Stability Pay for Success project will tap private sources to invest in the program to assist 500 families with children six or younger with ongoing, in-home care by clinicians and social workers.

If the effort proves successful – saving millions for taxpayers – the philanthropic investors get their money back with interest. But if it flops, they don’t.

Announcing the new initiative at the Old State House Tuesday, Gov. Dannel P. Malloy said it’s a way of “tackling a critical issue” by helping parents overcome substance abuse issues.

“We’re going to pay for good outcomes,” the governor said.

Officials said they’re confident the innovative program, which builds on the success of an existing effort to target troubled families with babies and toddlers, will make a dent in the number of children entering foster care.  There are about 2,000 children in state care today because drugs shattered their homes.

While the program itself is on the cutting edge of social service assistance, its financing is even more innovative as one of less than a dozen Pay for Success schemes across the country.

David Wilkinson, the director of the White House Office of Social Innovation, said that with budgets stretched on the state and national level, it’s critical for government “to spend smarter” by getting better results.

He said that Pay for Success programs like the one Connecticut is launching overcome barriers to change by pumping private money into fresh programs that show promise. The government winds up paying only “for what works,” Wilkinson said.

It’s a way of scaling up a proven program in a bid to get better results, he said.

Wilkinson said philanthropists – private individuals and charities – are willing to risk their money because they hope the new programs will prove successful and ultimately “get into the government bloodstream” as an improved way to deliver services.

Hartford Mayor Luke Bronin said the social impact investing will hold programs accountable and let people know their tax dollars are spent wisely.

Director of National Drug Control Policy Michael Botticelli said Connecticut’s new program is part of a larger push to combat an epidemic of opiate abuse through a variety of measures.

“It’s going to take everybody working together to stop this crisis,” Botticelli said.

U.S. Sen. Richard Blumenthal called it “a searing indictment of our nation” that 129 people die from fatal overdoses on an average day across America.

Blumenthal praised law enforcement for its focus on stopping the illicit traffic in opiates. But, he said, “we’re not going to jail our way” out of the crisis.

He said it will take “urgency and energy” to push forward programs like the one Connecticut is embarking on to bring the problem under control.

Department of Children and Families Commissioner Joette Katz said the new push builds on a program started in 2007 following a model developed at the Yale Child Study Center and Johns Hopkins University.

Officials said the expanded program will create six new family recovery teams that will allow them to reach new areas, including Waterbury, Danbury, Torrington, Norwich, Middletown and New Haven.

It will allow two clinicians and one family support worker to visit households three times a week for the first six months of the initiative, officials said, and continue visits for as long as 18 months if necessary.

“We know this model works,” Katz said. She said it focuses on strengthening the bonds between parents and children because enhancing that relationship has proven a pathway to recovery for mothers and fathers who are struggling with drugs.

The project will be carried out by the state and DCF, in conjunction with partners that include Family-Based Recovery at the Yale Child Study Center, Social Finance, University of Connecticut Health Center, the Harvard Kennedy School Government Performance Lab, and Jones Day.

The nonprofit Social Finance put together the Connecticut Pay for Success project, officials said. It will oversee performance management after the program gets underway.

“Pay for Success directs resources toward effective programs, such as Family-Based Recovery, that support some of our most vulnerable citizens,” said Social Finance’s co-founder and chief executive officer, Tracy Palandjian.

“This project is a great example of how Pay for Success taps private capital to advance the public good, and brings together diverse stakeholders to measurably improve lives,” Palandjian said in a statement.

Malloy said, “This is about providing effective treatment services early. It’s a strategic approach in order to keep children with their families.”