Health Care System

Webinar: HICCup Communities Will Create Investable Markets for Health

Date: January 28, 2014, 12:00pm-1:00pm

Presenters: Esther Dyson and Rick Brush

Host: Maine Quality Counts

What’s the return on $3 trillion per year? A smart portfolio manager would invest a better part of our nation’s health spend into community health and prevention that reduce the need for high-cost care in the first place.

That’s the thinking behind HICCup, the Health Initiative Coordinating Council. Launching in 2014, HICCup will work collaboratively with five communities competing to win the HICCup Prize for the greatest cost-effective improvement in health (not health care) over five years. Together, we’ll create community marketplaces that refocus competition, business models and investment on better health with financial returns.

Join us and share your ideas for communities ready to create investable markets for production of health.

Esther Dyson, founder of HICCup and chairman of EDventure Holdings, is an active angel investor, best-selling author, board member and advisor concentrating on emerging markets and technologies, new space and health. She sits on the boards of 23andMe and Voxiva (txt4baby), and is an investor in Crohnology, Eligible API, Keas, Omada Health, Sleepio, StartUp Health and Valkee, among others. Her sisters include a nurse who lives in Pownal, Maine, and a vet, a cardiologist and a radiologist.

Rick Brush, executive director of HICCup and founder of Collective Health, is a former corporate strategist in health and financial services, including nearly a decade at the health insurer Cigna. He’s now focused on creating markets for health-impact investing. Collective Health’s project to reduce childhood asthma emergencies in Fresno, California, is laying the groundwork for the first Health Impact Bond in the U.S.

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.

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.

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.

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
  • “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

Arkansas is moving from “fee-for-service” payments, “in which each procedure a patient undergoes for a single medical condition is billed separately,” to a “bundled” approach, in which “the costs of all the hospitalizations, office visits, tests and treatments will be rolled into one ‘episode-based’ or ‘bundled’ payment” (NYT, Sept. 5, 2012).

Aligning payment systems with outcomes vs. medical procedures makes sense. But what’s in the ‘bundle’?

The evidence is clear that social determinants (the conditions and choices where we live, work, learn and play) account for more than half of what sends us into the medical care system in the first place. Payment systems need to incentivize primary prevention that improves the environment and behaviors essential to health.

Anything less and we’re still spending our money in the wrong place.

An op-ed in The New York Times presents an intriguing idea (“The College Graduate as Collateral,” Luigi Zingales, June 13, 2012):

Investors could finance students’ education with equity rather than debt. In exchange for their capital, the investors would receive a fraction of a student’s future income — or, even better, a fraction of the increase in her income that derives from college attendance. (This increase can be easily calculated as the difference between the actual income and the average income of high school graduates in the same area.)

We think there are applications in health care as well. Health insurers and employers have been receptive to our model for Health Impact Bonds (PDF): investors finance prevention and health promotion in exchange for a share of future value (improved health, lower health care costs). Demonstration projects focused on reducing asthma-related emergencies and other conditions are coming together in Fresno, CA, and other communities. (Related story on Fast Company‘s Co.EXIST site.)

While the current model is a form of debt financing, we are developing alternative financing mechanisms (and new insurance products) that could be a form of equity contract. In this sense, my/our future health can be collateral for investments made in disease prevention, evidence-based care, and environments that promote healthier choices and wellbeing. The incremental value generated by these investments would be realized — and shared — in the form of better health, higher productivity and achievement, and lower costs.

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