Health Impact Bonds: a Model Where Investors Pay for Interventions

An article in the February edition of Environmental Health Perspectives details the experimental role that Health Impact Bonds may play in the treatment of chronic health conditions like asthma. “Based on growing national interest in social impact bonds, experimental financing mechanisms to help tackle social issues,Fresno’s proposed health impact bond (HIB) would step in where governments often do not, by supporting efforts to reduce emergency department visits and hospital stays related to asthma. As part of a pilot program, 200 local children with moderate to severe asthma will begin preventive care early in 2013. The children were chosen based on their asthma diagnosis as well as their related expenses based on medical claims data from MediCal (California’s Medicaid program)—the researchers are able to match each child’s diagnosis and treatment costs, giving them a clear idea of savings that could come at least in part from preventive care. ‘Some of these children go to the emergency department almost every week,’ says Rick Brush, founder and chief executive officer of Connecticut-based social enterprise Collective Health, which is overseeing the project. He says the focus in this pilot phase is on children who average 1.5 emergency department visits per year and end up staying in the hospital about half the time. ‘The bond would pay for in-home interventions we know through numerous scientific studies improve patient health and lower the cost of care,’ says Tony Iton, senior vice president for healthy communities at The California Endowment, a private health foundation.