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Social impact bonds in primary care: can they work in Australia?

In the talent quest for innovative ways of funding health care, a relatively recent entrant is the social impact bond. Social impact bonds have enjoyed the spotlight in Australia of late, after their early success in the Newpin SBB pilot program, an initiative to return children in out-of-home-care to their families.

At the recent Power to Persuade symposium in Canberra, some of those involved in Newpin noted its suitability to this model of funding, but expressed reservations about the applicability of social impact bonds for funding a wide range of social services.

FullSizeRenderAs Susan Killion, Director of the Deeble Institute for Health Policy Research, writes below, moves are now afoot to explore the use of social impact bonds to fund primary health care initiatives in Australia, with an upcoming roundtable to be hosted by The Australian Healthcare and Hospitals Association.

****

Susan Killion writes:

In a recent Deeble Institute for Health Policy Research issues brief, Melbourne University’s Associate Professor John Fitzgerald proposed using innovative and outcome-focused primary health care financing models, including the possible use of social impact bonds, in the reform of health funding.

Social impact bonds (SIBs) focus on the outcomes of investment, and promote private investment in evidence–based preventive services. They have been used in social services, but have not yet been fully explored in primary health. The typical application of SIBs involves a client based intervention for particular behaviours with a captive population, such as in a prison setting.

SIBs involve private investors funding interventions and Government paying back the principal as well as a return on the investment. This ‘payout’ only occurs once the program meets its goals. The attractiveness of SIBs lies in risk mitigation to government, cash flow management for government departments and the potential to promote innovation and increase accountability in service delivery via public-private partnerships.

Successfully used in countries such as the United States, SIBs have funded initiatives in justice, out of home care, social welfare and education. There have been some examples of successful SIBs in the US health sector, particularly in asthma prevention, diabetes and primary health.

In the United Kingdom one of the National Health Service’s regional primary health Clinical Commissioning Groups introduced a SIB project focused on ‘social prescribing’ to support 8,000 people with long-term health conditions such as lung disease, diabetes and asthma.

There has also been interest in using SIBs in Australia. The New South Wales Government and UnitingCare launched the Newpin pilot SIB program in 2013 with $7m of private investment. The purpose of the program is to restore children from foster care back to their homes, or to prevent them from entering out-of-home care in the first place. It does so by creating safe home environments through training and support services to families. By September 2014 the program had successfully restored 28 children to their former homes and prevented another 10 from entering foster care. Based on the terms of the SIB, reaching this milestone led to interest payments of 7.5% of the initial investment being returned to investors.

In a subtle way, impact investing requires a change in mindset away from discussions of which interests (private or public) are responsible for ill-health. The focus shifts to the mitigation of ill-health by adjusting tastes and behaviours.

However, it’s not all good news for impact investing. SIBs focus on outcomes, but measuring these is not simple in primary care. Outcomes may not be realised for many years and attribution of an outcome to the intervention requires sophisticated evaluation techniques.

The newly constituted Primary Health Networks have an opportunity to engage in impact investments such as SIBs in order to respond more directly to local needs. A funded emphasis on better health outcomes rather than simply focusing on payments based on activity is consistent with the commissioning role envisaged for the Primary Health Networks.

More work is needed to determine the applicability of SIBs to the Australian primary health environment. Federal and State Governments will be keeping a close eye on the success of efforts like the Newpin pilot program, because SIBs may prove to be a valuable tool for the future sustainability of the Australian health system. While SIBs may not be the only solution for these problems, a discussion about them might get us to ask deeper questions about how our health system might operate differently.

Current attempts to control GP demand through price controls may have caused us to lose focus on what matters most: the health and wellbeing of our citizens. SIBs might be one way that we can achieve a blend of financing in our health system that places focus on outcomes.

The Australian Healthcare and Hospitals Association will host a roundtable on social impact investing in health in Sydney on 29 October to discuss the potential for social impact investing to drive quality and efficiency in health at a time of significant change in health sector funding arrangements. For more information and to register see https://ahha.asn.au/events/roundtable-social-impact-investing-health.

Susan Killion is the Director of the Deeble Institute for Health Policy Research, part of the Australian Healthcare and Hospitals Association Follow AHHA on twitter @AusHealthcare

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#TheMHS2017
#VMIACConf17
#WCPH2017
Australian Palliative Care Conference
2018 conferences
#6rrhss
#ACEM18
#AHPA201