+49 (0) 162 2343 600 | E-Mail: info@healthcareshapers.com
  • LANGUAGES
    • Deutsch Deutsch
    • English English
    • Français Français

Healthcare Shapers

  • About us
  • Clients
  • Contact
  • Services
  • Collaborators
  • Blog
  • News
 31. January 2023

Month: September 2017

Health Impact Bonds: Investing in Health and Creating total Value for Society

Sunday, 10 September 2017 by Sabine Kraus
Health-Impact-Bonds_EN_Healthcareshapers_com

People are worth more to the healthcare sector sick than healthy. Current payment systems are supply driven and reward treatment, rather than prevention or outcome-based interventions. The result is that patients, payers and the wider economy are losing out. Today, new approaches have emerged that are more collaborative, cost and resource efficient and ultimately, more financially sound. Innovative approaches that represent a benefit for all stakeholders are performance-based contracts, where investors pre-finance interventions which generate a positive social and economic impact. Those so-called Health Impact Bonds and the hurdles that need to be overcome along the way will be explained in this article.

The challenges the current system faces are well illustrated by the fact that as many as 50 percent1 of patients don’t adhere to their prescribed therapy, at a shared cost to pharma industry, pharmacists and health insurers of 478 billion dollars in the United States alone2 – and that’s before accounting for the costs of lost productivity and employee absence due to illness, which remain an externality to the industry, picked up by the public purse or employers.

Even in areas where the shared benefits are obvious, with big incentives to resolve this challenge, healthcare systems seem unable to adapt to change. Current systems remain largely closed, highly siloed, and resistant to creating the right environment and framework for ‘value based healthcare’ (VBHC)2.

Four Hurdles
What is preventing the health industry to focus their innovation effort on value based healthcare and thus, to create more value for companies as well as the single patient and the whole society? Interviews with 24 German experts3 identified four hurdles, which are consistent with the findings of other surveys:

  1. Failure to incentivise VBHC interventions
  2. Focus on compliance rather than health economic impact and innovation
  3. Innovation gaps in patient-centricity, digitization, and new business models
  4. Fear of loss of control, share and profit when collaborating across sectors

New Opportunity: Health Impact Investing
Social Impact Bonds that already have been implemented successfully in the US und UK can be transferred to the healthcare sector and serve as blue print for Health Impact Bonds. Investors pre-finance interventions that generate a positive social impact, from which the state benefits socially and economically. When the agreed outcome-targets are reached, the state pays back the investment including a return. This financing model ensures that the outcome parameters have been determined and agreed prior to the contract by all partners and that they are measured during and after the project, so that the impact is quantified.

Given the demographic development and the continuous increase of chronical diseases, the German healthcare system will have to change to achieve better health outcomes and manage the cost explosion. Three factors will be critical for success:

  1. Create a collaborative ecosystem
  2. Deploy scalable patient-centric models that leverage technology
  3. Establish new innovative impact finance solutions

So far, impact Bonds have rarely been applied in health care. The Netherlands are currently investigating and developing health impact ideas with the ABN AMRO bank as potential investor. Case studies from South Carolina and California from ongoing Health Impact Bonds demonstrate the potential also in Germany. Health insurers would be outcome funders, because they benefit from a health-economic impact, i.e. cost savings. And they carry no risk, as they only pay if the intervention is successful, ergo, if the agreed outcome targets are reached.

As new solutions emerge, stakeholders in healthcare now have a choice. They can either defend their existing business model and continue to focus narrowly on delivering products, rather than solutions. Or they can show they understand that today’s environment requires collaborative approaches, different health ecosystems, new businesses and financing models and ultimately better patient outcomes.

Sources:
1 World Health Organization, 2003, Adherence to Long-Term Therapies, Evidence for Action.
2 The Economist Intelligence Unit 2016, Value-based Healthcare: A global Assessment, commissioned by Medtronic.
3 The 24 interviews were conducted with stakeholders in the healthcare and pharmaceutical sectors. These included patient advocates, politicians and executives from the health insurance, healthcare provider and pharmaceutical industries. They were conducted over the phone or face to face, with a duration of 20-60 minutes each. The research was conducted between March and May, 2017.

Health Impact BondsHealth Impact Investing
Read more
  • Published in Innovative Care, Uncategorized
No Comments

Suche

Letzte Beiträge

  • Strategie trifft Umsetzung

    Driving the Strategy Execution

    In our complex and busy world, a lot of focus i...
  • Faster time to market, less funds: How to survive as a BioTech Startup?

    Faster time to market, less funds: How to survive as a BioTech Startup?

    The climate of overall uncertainty in markets i...
  • Building vs. Breaking Mental Health with Digital Technology

    Healthcare Shapers Perspectives Guest: Craig A....
  • From Crisis to Clarity

    Healthcare Shapers Perspectives Guest: Kathy Le...
  • 3 Essential Strategies To Healthcare Commercial Success

    Healthcare Shapers Perspectives Guest: Erkan Ha...

Archiv

  • January 2023
  • August 2022
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • April 2020
  • March 2020
  • December 2019
  • September 2019
  • November 2018
  • March 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • May 2017
  • April 2017

Kategorien

  • digitalization
  • e-health
  • Innovative Care
  • leadership
  • Market Access
  • Mobile
  • patient-centricity
  • Perspectives
  • Strategy
  • Technology
  • Telehealth
  • Uncategorized
  • Virtual Reality

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

Empfohlen

  • Strategie trifft Umsetzung

    Driving the Strategy Execution

    0 comments
  • Faster time to market, less funds: How to survive as a BioTech Startup?

    Faster time to market, less funds: How to survive as a BioTech Startup?

    0 comments
  • Building vs. Breaking Mental Health with Digital Technology

    0 comments
  • From Crisis to Clarity

    0 comments
  • 3 Essential Strategies To Healthcare Commercial Success

    0 comments

NAVIGATION

  • About us
  • Clients
  • Contact
  • Services
  • Collaborators
  • Blog
  • News

NEWSLETTER

Enter your e-mail address and we will gladly keep you informed about current topics and upcoming events.

RSS-Feed abonnierenRSS-Feed abonnieren

HEALTHCARE SHAPERS

Günther Illert
(Founder of the network)
Rheingauer Straße 49c
D-65343 Eltville
Germany

M +49 (0) 162 2343 600

E-Mail:info@healthcareshapers.com

  • About us
  • Contact
  • Site Notice
  • Privacy Policy
  • GET SOCIAL

Healthcare Shapers© 2018 All rights reserved.

TOP
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies. Read More
Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT