Social impact bonds and their application to preventive healthJohn L. Fitzgerald
School of Social and Political Sciences, University of Melbourne, Parkville, Vic. 3052, Australia. Email: email@example.com
Australian Health Review 37(2) 199-204 https://doi.org/10.1071/AH12238
Submitted: 11 October 2012 Accepted: 12 November 2012 Published: 9 April 2013
Although preventive health in Australia has been acknowledged as central to national health and wellbeing, efforts to reform the delivery of preventive health have to date produced limited results. The financing of preventive health at a national level is based on outcome- or performance-based funding mechanisms; however, delivery of interventions and activities at a state level have not been subjected to outcome-based funding processes. A new financing tool being applied in the area of social services (social impact bonds) has emerged as a possible model for application in the prevention arena. This paper explores key issues in the consideration of this funding model in the prevention arena. When preventive health is conceptualised as a merit good, the role of government is clarified and outcome measures fully articulated, social impact bonds may be a viable funding option to supplement core public health activities.
What is known about the topic? The complexities of outcome monitoring in preventive health are well understood. Likewise, the problem of linking funding to outcomes from preventive health practice has also been debated at length in health policy. However, not much is known about the application of social impact bonds into the preventive health arena.
What does this paper add? This paper discusses the limitations and opportunities facing the application of the social impact bond financing model in the preventive health arena. This has not been undertaken previously.
What are the implications for practitioners? Social impact bonds have received significant recent attention from federal and state government treasury departments as potential financing tools for government. Health policy practitioners are watching this space very closely to see the outcomes of a New South Wales trial. Health promotion practitioners and primary care practitioners who deliver preventive services will need to keep abreast of this issue as it will have significant impact on their practice if states and territories introduce outcome-based funding processes.
References Commonwealth of Australia. A National Health and Hospitals Network: further investments in Australia’s health. Canberra: Commonwealth of Australia; 2010. Available at http://www.health.gov.au/internet/main/publishing.nsf/Content/nhhn-report-2 [verified 10 October 2012].
 Preventative Health Taskforce. Australia: the healthiest country by 2020 - National Preventative Health Strategy. Canberra: Commonwealth of Australia; 2009.
 National Health and Hospitals Reform Commission. A healthier future for all Australians - final report. Canberra; Commonwealth of Australia; 2009.
 Lin V, Fawkes S, Hughes A. A vision for prevention in Australia. Discussion paper. Melbourne: Australian Institute of Health Policy Studies; 2008.
 Baum F, Fisher M. Are the national preventive health initiatives likely to reduce health inequities? Aust J Primary Health 2011; 17 320–6.
| Are the national preventive health initiatives likely to reduce health inequities?CrossRef |
 Duckett S, Wilcox S. The Australian health care system. Melbourne: Oxford University Press; 2011.
 Harris A, Mortimer D. Funding illness prevention and health promotion in Australia: a way forward. Aust New Zealand Health Policy 2009; 6 25
| Funding illness prevention and health promotion in Australia: a way forward.CrossRef | 19909519PubMed |
 Lilley KC, Stewart DE. The Australian preventive health agenda: what will this mean for workforce development? Aust New Zealand Health Policy 2009; 6 14
| The Australian preventive health agenda: what will this mean for workforce development?CrossRef | 19463159PubMed |
 Duckett S, Hogan T, Southgate J. The COAG reforms and community health services. Aust J Primary Health 1995; 1 3–10.
| The COAG reforms and community health services.CrossRef |
 Council of Australian Governments. National Partnership Agreement on Preventive Health. Canberra: Commonwealth of Australia; 2008.
 COAG Reform Council. Healthcare 2010–11: comparing performance across Australia. Report to the Council of Australian Governments. Canberra: COAG Reform Council; 2012. Available at http://www.coagreformcouncil.gov.au/reports/docs/healthcare_10-11/Healthcare_2010-11-Full_report.doc [verified 10 October 2012].
 MacIntyre RC. Public health and health reform in Australia. Med J Aust 2011; 194 38–40.
 Swinburn B. Obesity prevention: the role of policies, laws and regulations. Aust New Zealand Health Policy 2008; 5 12
| Obesity prevention: the role of policies, laws and regulations.CrossRef | 18534000PubMed |
 Baum F. Goals and targets for health: their limitations as an approach to health. Aust J Prim Health Interchange 1995; 1 19–28.
| Goals and targets for health: their limitations as an approach to health.CrossRef |
 Rissel C, Holt P, Ward J. Applying a health outcomes approach in a health service unit. Aust Health Rev 1998; 21 168–81.
| Applying a health outcomes approach in a health service unit.CrossRef | 1:STN:280:DyaK1cvlsFGnsA%3D%3D&md5=247e9113021845ef6474cd93c42d3030CAS | 10185683PubMed |
 Boyden A, Carter R. The appropriate use of financial incentives to encourage preventive care in general practice. Research report 18. Melbourne: Centre for Health Program Evaluation; 2000. Available at http://www.buseco.monash.edu.au/centres/che/pubs/rr18.pdf [verified 10 October 2012].
 World Health Organization. Financing health promotion. Geneva: WHO; 2007.
 Young D, Gunn J, Nacarella L. Funding policy options for preventative health care within Australian primary health care. Discussion paper prepared for the National Health and Hospitals Reform Commission 2008. Available at http://www.health.gov.au/internet/nhhrc/publishing.nsf/Content/discussion-papers [verified 10 October 2012].
 Sugarman SD, Sandman N. Using performance-based regulation to reduce childhood obesity. Aust New Zealand Health Policy 2008; 5 26
| Using performance-based regulation to reduce childhood obesity.CrossRef | 19017402PubMed |
 Loder J, Mulgan G, Reeder N, Shelupanov A. Financing social value: implementing social impact bonds . London: The Young Foundation; 2010.
 Corrigan P. A new way to invest in better healthcare. London: Social Finance; 2011.
 Shergold P, Kernot C, Hems L. Report on the NSW Government: social impact bond pilot, Centre for Social Impact. Sydney: Centre for Social Impact; 2011. Available at http://www.csi.edu.au/site/Knowledge_Centre/Asset.aspx?assetid=0b6ef737d2bd75b9 [verified 10 October 2012].
 Senate Economics References Committee. Investing for good: the development of a capital market for the not-for-profit sector in Australia. Canberra: Parliament House; 2011. Available at http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=economics_ctte/capital_market_2011/report/c06.htm#anc1 [verified 10 October 2012].
 Fox C, Albertson K, Warburton F. Justice reinvestment: can it deliver more for less? Howard J Crim Justice 2011; 50 119–36.
| Justice reinvestment: can it deliver more for less?CrossRef |
 Van Herck P, De Smedt D, Annemans L, Remmen R, Rosenthal MB, Sermeus W. Systematic review: effects, design choices, and context of pay-for-performance in health care. BMC Health Serv Res 2010; 10 247
| Systematic review: effects, design choices, and context of pay-for-performance in health care.CrossRef | 20731816PubMed |
 Australian Government. Government response: senate economics references committee report - investing for good: the development of a capital market for the not-for-profit sector in Australia. Canberra: Department of the Prime Minister and Cabinet; 2012. Available at http://www.dpmc.gov.au/publications/docs/government-response-investing-for-good.pdf [verified 22 October 2012].
 State of Victoria, Department of Health. Victorian public health and wellbeing plan 2011–2015. Melbourne: Department of Health; 2011. Available at http://docs.health.vic.gov.au/docs/doc/8532A3E8DAD73048CA2578FE000571F5/$FILE/vic-public-health-wellbeing-plan.pdf [verified 10 October 2012].
 Cadilhac DA, Magnus A, Cumming T, Sheppard L, Pearce D, Carter R. The health and economic benefits of reducing disease risk factors. Melbourne: VicHealth; 2009.
 Vos T, Carter R, Barendregt J, Mihalopoulos C, Veerman JL, Magnus A, et al. ACE–Prevention Team. Assessing Cost-Effectiveness in Prevention (ACE–Prevention): final report. Brisbane: University of Queensland and Melbourne and Deakin University; 2010.
 Ridoutt L, Gadiel D, Cook K, Wise M. Planning framework for the Public Health workforce. Melbourne: National Public Health Partnership; 2002. Available at http://www.nphp.gov.au/publications/wfpapers/wfplanning.pdf [verified 10 October 2012].
 West EG, McKee M. De gustibus est disputandum: the phenomenon of ‘merit wants’ revisited. Am Econ Rev 1983; 73 1110–21.
 Musgrave R. The theory of public finance. New York: Mc-Graw Hill; 1959.
 Pulsipher AG. The properties and relevancy of merit goods. FinanzArchiv/Public Finance Analysis 1971; 30(H2): 266–86. Available at http://www.jstor.org/stable/40910860 [verified 10 October 2012].
 Cohen D. Prevention as a merit good. Aberdeen: Health Economics Research Unit; 1981.
 Tones K. Effectiveness in health promotion: indicators and evidence of success. In Scott D, Weston R (eds) Evaluating Health Promotion. ch4. pp. 49–74. Cheltenham: Nelson Thornes; 1998.
 Ross B, Snasdell-Taylor J, Cass Y, Azmi S. Health financing in Australia: the objectives and players. Occasional papers: Health Financing Series Vol. 1. Canberra: Commonwealth Department of Health and Aged Care; 1999.
 Marmot M. Fair society equals lives. Strategic review of health inequalities in England post 2010. London: The Marmot Review; 2010.
 Crowle J, Turner E. Childhood obesity: an economic perspective. Melbourne: Productivity Commission Staff Working Paper; 2010. Available at http://www.pc.gov.au/research/staff-working/childhood-obesity [verified 10 October 2012].
 Swinburn B, Martin J. Why the Preventive Health Agency should ignore the PC on obesity. Available at http://www.crikey.com.au/2010/10/28/why-the-preventive-health-agency-should-ignore-the-pc-on-obesity/ [verified 12 October 2012].
 Ball K, Andajani-Sutjahjo S, Crawford D. The costs of weight control: what do young women pay? Med J Aust 2003; 179 586
| 14636122PubMed |
 Gewurtz RE. Instituting market-based principles within social services for people living with mental illness: the case of the revised ODSP employment supports policy. PhD Thesis. Toronto: Graduate Department of Rehabilitation Science University of Toronto; 2011.
 Commonwealth of Australia. A National Health and Hospitals Network: further investments in Australia’s health. Canberra: Commonwealth of Australia; 2010. Available at http://www.health.gov.au/internet/main/publishing.nsf/Content/nhhn-report-2 [verified 10 October 2012].
 Australian Medical Association. AMA opposes Medicare Locals. 18 March 2011. Press release. Available at http://ama.com.au/node/6494 [verified 10 October 2012].
 Cohen JT, Neumann PJ, Weinstein MC. Does preventive care save money? Health economics and the presidential candidates. N Engl J Med 2008; 358 661–3.
| Does preventive care save money? Health economics and the presidential candidates.CrossRef | 1:CAS:528:DC%2BD1cXhvVejtbw%3D&md5=d57c483be8ffee8735f22eb3592de5baCAS | 18272889PubMed | 18272889PubMed |
 Johnson BA, Kremer PJ, Swinburn BA, de Silva-Sanigorsk MA. Multilevel analysis of the Be Active Eat Well intervention: environmental and behavioural influences on reductions in child obesity risk. Int J Obes 2012; 36 901–7.
| Multilevel analysis of the Be Active Eat Well intervention: environmental and behavioural influences on reductions in child obesity risk.CrossRef | 1:STN:280:DC%2BC38rnslyksw%3D%3D&md5=4db5d3c28b829da15245a974276f246bCAS |
 Bernet PM. The increasing importance of public health funding research. J Public Health Manag Pract 2012; 18 303–5.
| The increasing importance of public health funding research.CrossRef | 22635182PubMed | 22635182PubMed |
 Rissel C, Ward J. An outcomes approach to population health at the local level in NSW: practical problems and potential solutions. Aust Health Rev 1996; 19 23–39.
| An outcomes approach to population health at the local level in NSW: practical problems and potential solutions.CrossRef | 1:STN:280:DyaK283ntVCgtw%3D%3D&md5=c2276090b9b7bb30858ea37b01f197e9CAS | 10159216PubMed | 10159216PubMed |