Health Financing

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.


Earlier this year,  Prevention Institute (PI) hosted a webinar entitled “How Can We Pay for a Healthy Population?” with four presenters describing promising approaches for generating sustainable and consistent funding for community prevention. In response to the many thought-provoking questions from participants, PI posted a follow-up Q&A on the topic…

PI: What is the potential in scaling up the approach you presented and/or replicating it elsewhere across the country?

Collective Health (CH): We think there is significant potential to scale up and replicate our asthma intervention, within Fresno and in other communities, using Health Impact Bonds or other forms of health-impact investing. At the end of phase one of our Fresno asthma project, we will have validated cost savings using insurance claims data. This will support scale up of the program through shared-savings contracts between payers (insurers, employers, and others that directly benefit from reduced health care costs) and investors (foundations, individuals, and institutions that provide upfront capital for the intervention). While our project focuses on asthma, we see many opportunities to expand the application of health-impact investing to other areas of prevention (e.g., comprehensive care coordination models to reduce avoidable emergency department visits, hospital re-admissions, at-risk maternity, serious mental illness, onsite/telehealth/in-home care).

PI: Do you think the four approaches (PDF download) — Accountable Care Community, Health Impact Bonds, Nonprofit Hospital Community Benefit Funding, Prevention and Wellness Trust — are potentially complementary? If so, how?

CH: Yes, it is worth exploring potential connections among these approaches. For example, could Community Benefit or Wellness Trust dollars be invested into Health Impact Bonds that support evidence-based prevention and generate better health and financial outcomes? In this case, it might be possible for these investments to earn a financial return that could then be re-invested in additional programs and expansion. Another example might be using Health Impact Bonds to finance the initial start-up costs for Accountable Care Communities.

PI: One of the challenges in promoting investment in community prevention is that in moving “upstream” the impacts of interventions become harder to capture (e.g., improving neighborhood air quality has multiple health benefits and cost savings potentially accrue to different health payers and other non-health sectors). How does the approach you discussed deal with this challenge?

CH: A fundamental and sustainable shift in health will only come about if we take on the big issues: the social, environmental and economic systems that influence our health, health behaviors and health choices. Changes at this level will require collective action — and generate collective benefits — across many stakeholders (i.e., all of us). It will require patient capital, long-term investment and a larger pool of investors to spread risk and return. In our white paper (PDF download) referenced in the PI report, we considered a Health Capital Market, where multiple Health Impact Bonds and other investment vehicles would connect a broader set of investors and public and private payers to finance community-wide health improvement and prevention efforts.

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.

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.)

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.

“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).

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

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