Limits...
Health impact bonds: will investors pay for intervention?

Clay RF - Environ. Health Perspect. (2013)

View Article: PubMed Central - PubMed

AUTOMATICALLY GENERATED EXCERPT
Please rate it.

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... Based on growing national interest in social impact bonds (SIBs), 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... Iton says The California Endowment is spending $1.1 million to kick off Fresno’s HIB project... The workers will follow up with monthly phone calls and quarterly home visits to provide further assistance and help ensure compliance with recommended practices... After a year the original claims data will be compared with the number of emergency department visits and hospitalizations as well as treatment costs after intervention... According to the California Department of Public Health, approximately 157,000 people in Fresno have asthma... Using cost data from California, Florida, and Indiana, Brush estimated that asthma-related emergency department visits and hospitalizations set Fresno patients and insurers back about $35 million per year. (Adding indirect costs related to lost school and work days boosts his estimate to $87 million per year, he says.) So the potential for improved health care and savings could be significant. “We project a thirty-percent reduction in emergency department visits and fifty-percent reduction in hospitalizations, with approximate net savings of five thousand dollars per child per year after paying for the intervention,” Brush says. “The HIB is raising capital for an intervention that would not necessarily have happened otherwise... We are investing in prevention to avoid emergencies and costs that are likely to happen if we do nothing. ” If the intervention is successful, insurers will pay out far less in health care reimbursements than they would have without the intervention... After analyzing the actual savings from the pilot phase, Brush says his team will likely launch the bond in 2014, raising capital to scale up the effort to 1,000–3,500 children—the final number will depend in part on how many investment dollars are raised... Possible investors in the “pay-for-success” model could include foundations, government entities, private companies with health insurance programs (Whirlpool is planning a similar bond for its employees in Michigan), individuals, and investment firms, he says... By requiring health insurers to spend more premium dollars on care and fewer on administration and profit, the act might encourage insurers to invest in programs that reduce health care costs and provide a return... SIBs are being tested to reduce teen criminal recidivism in New York City and homelessness in Massachusetts.

Show MeSH

Related in: MedlinePlus

Emergency department visits can turn into hospital stays for asthma patients.© Phaitoon Sutunyawatchai/Shutterstock.com
© Copyright Policy - public-domain
Related In: Results  -  Collection

License
getmorefigures.php?uid=PMC3569697&req=5

f1: Emergency department visits can turn into hospital stays for asthma patients.© Phaitoon Sutunyawatchai/Shutterstock.com


Health impact bonds: will investors pay for intervention?

Clay RF - Environ. Health Perspect. (2013)

Emergency department visits can turn into hospital stays for asthma patients.© Phaitoon Sutunyawatchai/Shutterstock.com
© Copyright Policy - public-domain
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC3569697&req=5

f1: Emergency department visits can turn into hospital stays for asthma patients.© Phaitoon Sutunyawatchai/Shutterstock.com

View Article: PubMed Central - PubMed

AUTOMATICALLY GENERATED EXCERPT
Please rate it.

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... Based on growing national interest in social impact bonds (SIBs), 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... Iton says The California Endowment is spending $1.1 million to kick off Fresno’s HIB project... The workers will follow up with monthly phone calls and quarterly home visits to provide further assistance and help ensure compliance with recommended practices... After a year the original claims data will be compared with the number of emergency department visits and hospitalizations as well as treatment costs after intervention... According to the California Department of Public Health, approximately 157,000 people in Fresno have asthma... Using cost data from California, Florida, and Indiana, Brush estimated that asthma-related emergency department visits and hospitalizations set Fresno patients and insurers back about $35 million per year. (Adding indirect costs related to lost school and work days boosts his estimate to $87 million per year, he says.) So the potential for improved health care and savings could be significant. “We project a thirty-percent reduction in emergency department visits and fifty-percent reduction in hospitalizations, with approximate net savings of five thousand dollars per child per year after paying for the intervention,” Brush says. “The HIB is raising capital for an intervention that would not necessarily have happened otherwise... We are investing in prevention to avoid emergencies and costs that are likely to happen if we do nothing. ” If the intervention is successful, insurers will pay out far less in health care reimbursements than they would have without the intervention... After analyzing the actual savings from the pilot phase, Brush says his team will likely launch the bond in 2014, raising capital to scale up the effort to 1,000–3,500 children—the final number will depend in part on how many investment dollars are raised... Possible investors in the “pay-for-success” model could include foundations, government entities, private companies with health insurance programs (Whirlpool is planning a similar bond for its employees in Michigan), individuals, and investment firms, he says... By requiring health insurers to spend more premium dollars on care and fewer on administration and profit, the act might encourage insurers to invest in programs that reduce health care costs and provide a return... SIBs are being tested to reduce teen criminal recidivism in New York City and homelessness in Massachusetts.

Show MeSH
Related in: MedlinePlus