Can ‘Pay for Success’ Reset a Broken Health Care System?

Addressing the other 90% of what matters to health calls for a profoundly different health delivery and financing system — see article in Federal Reserve Bank of San Francisco’s Community Development Investment Review.

 

Grant for Fresno asthma project paves way for Social Impact Bond

Social Finance, Inc. and Collective Health announced today that The California Endowment (TCE) has awarded them $660,000 in grant funding to launch a demonstration project to improve the health of low-income children with asthma and reduce the costs that result from emergency treatments. Based in Fresno, California, the project will incorporate rigorous data collection and evaluation methodologies in order to demonstrate the dual social and financial benefits of up-front investment in asthma management and prevention. This project will lay the groundwork for Social Finance and Collective Health to design and launch the first health-focused Social Impact Bond in the U.S. (Read full story here.)

 

Webinar recording: PI’s “How Can We Pay for a Healthy Population?”

Prevention Institute’s “How Can We Pay for a Healthy Population” webinar recording and slides are now available here. The webinar covered four strategies to secure sustainable funding for community prevention efforts:

• Accountable Care Communities
• Health Impact Bonds
• Hospital Community Benefit funding
• Wellness Trusts

Presenter Q&A is also available here.

 

March 6 webinar and report: Paying for a healthier population

A new report and upcoming webinar hosted by Prevention Institute presents strategies to shift health care financing from treating illness to keeping people well.

• The report, How Can We Pay For a Healthier Population?, highlights wellness trusts, social impact bonds/health impact bonds, community benefit funds, and accountable care organizations/accountable care communities with the potential for replication and scaling.
• The webinar on March 6 (2:00pm-3:30pm EST, 11:00am-12:30pm PST) will explain more about how these approaches can create healthier community conditions that improve health and financial outcomes at the population level.

 

Health Impact Bonds: Will Investors Pay for Intervention?

“With a 20% countywide pediatric asthma rate, Fresno, California, is the first U.S. community to test a health care funding strategy that could both reduce treatment costs and provide a financial incentive to investors.” – coverage in Environmental Health Perspectives (web, PDF), published by the National Institute of Environmental Health Sciences (NIEHS).

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Other recent coverage in Forbes, The Bond Buyer, Fast Company, and Nikkei (PDF in Japanese).

 

News roundup: Health Impact Bonds

Recent coverage of Health Impact Bonds and Collective Health’s projects with Fresno and Whirlpool Corporation…

• “An unusual experiment is underway in Fresno, Calif., that could usher in a new era in managing chronic illnesses and reducing related health care costs… Meanwhile, Collective Health is talking with other self-insured employers and health plans around the country about using the health impact bond model to benefit plan members and corral costs.” - City looks to fund asthma program through bond sales, Employee Benefit News

• “Collective Health has been developing a pilot project that aims to show that a well-designed asthma intervention can save enough money to induce private investors to kick in… Now is the right time ‘to demonstrate that there’s a business case for prevention’” – Obamacare Spurs New Thinking On Using the Market to Pay for Prevention, Forbes

• “The idea is to attract money from investors to pay for up-front treatments, in this case relatively small steps that can reduce indoor air pollution. Health providers save money with reduced costs, and they share those savings with the investors… This is the first time that a social impact bond has been focused on health care.” – Social Impact Bond May Fund Asthma Prevention in Fresno, KVPR – Valley Public Radio

 

Transformational financing requires a business case

Living Cities’ President & CEO Ben Hecht writes on Fast Company’s Co.EXIST site that there are “5 Transformational Forces That Should Be Driving The Social Sector (But Aren’t)”:

1. Portable, Participatory and Personal Information
2. Social Networks and Media
3. Big Data
4. Frugal Innovation
5. Collaboration Is the New Competition

Another transformational force is the shift from traditional “funding” to “pay-for-success” financing. A good example is social impact bonds. And with Goldman Sachs’s recently announced $9.6 million investment to reduce prison recidivism in New York City, the door is opening wider.

In the health sector, Collective Health is using data to “hot spot” significant illness and costs linked to unhealthy social/community conditions. More than half of all health care spending is concentrated in just 5% of the population with the greatest health burden. So there’s a real opportunity to use data and Health Impact Bonds (PDF) to pay for community-based prevention that reduces/avoids future costs.

As Ben Hecht asks, what can happen when these transformational forces are “fully unleashed”? The social sector needs to sharpen its pencils, build a business case for smart investors, and discover what’s possible.