Bridging for Health Advisory Panel Insights Part 2: Keeping an Eye on Innovations in Financing Upstream Drivers of Health
We recently asked the Bridging for Health advisory panel for their insights on innovative ways to finance upstream drivers of health.
Sources of Money
“I think there are two pots of money to pay attention to: financing (finding an investment partner) and finding the money associated with value that’s created from the intervention itself (cost savings),” says Ian Galloway, a senior research associate at the Federal Reserve Bank of San Francisco.
In deciding to bring on a financial partner to fund a specific project, Galloway says organizations should assess two specific conditions:
- Is there an evidence-based program that you know will improve health, but you don’t have the resources available to scale it up to meet the need?
- Is there risk involved that your organization can’t take on?
“Financing can play a really key role in giving you the working capital that you need to replicate a program or grow it so that you can effect change,” says Galloway. “But sometimes you have a good sense that a program is going to work, but you don’t know for sure and you don’t have the ability to take on that risk yourself so you outsource it to a financial partner who’s willing to take that risk for you.”
The other pot of money is the money associated with value that’s created from the intervention itself. For example, Galloway cites two sources of value:
- Health care savings — By addressing social determinants associated with a particular disease (e.g., asthma), the number of people using the emergency room could be reduced, which saves money for the health care system that can be reinvested in expanding the program that tackles the social determinant.
- Societal benefit — If more kids are growing up ready to learn, that can translate into many long-term societal benefits that can be assigned a monetary value.
“That’s the business proposition — a combination of ‘Is this going to save money if we’re successful?’ and ‘What kind of value is this producing for society?’ that society will potentially be willing to pay for,” explains Galloway.
Return on Investment
The key to getting many partners on board to pay for better population health is stating a clear value proposition of why they should care.
“I think historically we’ve been too quick to limit the value of health to the health care sector,” Galloway admits. “But we know health extends well beyond access to medical care. It extends into the community, into the home, into our schools. Making the case that improving all of those things is as important, if not more important, to health is really important, I think, in getting more people to the table and willing to participate in a larger initiative to improve health.”
Central to attracting partners is explaining the benefits of investing in upstream drivers and population health to nonhealth folks.
“We need to work on the idea that there is a return on investment to making our population healthier,” says Kathleen Adams, professor at Emory University’s Rollins School of Public Health. “Whether that’s at home, or in the workplace, or in the play place, businesses do have a lot to gain from making situations more healthful for their workers. They are more likely to be at work every day and be more productive, so there is both private- and public-sector involvement that can take place.”
Adams says it is productive to think in terms of the idea first and the financing later, keeping in mind that financing options are subject to changing policy environments.
Moving Investments Upstream
There is increasing recognition of the need to more effectively integrate health and social services. Experts believe this recognition is creating opportunities for a broad range of financing vehicles to be explored as a way to pay for these initiatives.
For instance, community development financial institutions and hospitals’ endowment investment pools are being used for investments in community-development projects, says Jim Hester, former acting director of population health models at the Center for Medicare and Medicaid Innovation. Additionally, Hester says there is increasing interest in expanding the scope of accountable care organizations to include accountability for social services in models such as social health maintenance organizations or total accountable care organizations.
In order to make the investment case for these models, Hester urges collaboratives to document the impacts on more sectors and broaden the set of measures included in of data collection. Hester urges collaboratives to consider, “What is the state of well-being of the population? Is the population health initiative reducing the demands or cost for services not only in health care but also in other sectors?”
For example, Hester cites a hub-and-spoke model implemented in Vermont to curb opiate addiction. The hub of specialists is able to increase primary care practitioners’ capacity to manage opiate addiction. Extensive data collected by initiative was able to show numerous benefits, including the impact on the criminal justice system in terms of reduced incarceration for opiate-related offenses and recidivism.
Communities exploring innovative ways to finance upstream drivers of health need to pay attention to the sources of funding (financing or reinvestment of savings), as well as evidence that can inform both upstream targets as well as potential return on investment.
About Bridging for Health
Bridging for Health: Improving Community Health Through Innovations in Financing, supported by the Robert Wood Johnson Foundation, takes a systemic approach to improving population health. To accomplish this, Bridging for Health focuses on the linkages between three key areas—innovations in financing, collaboration, and health equity. The Georgia Health Policy Center is the national coordinating center for Bridging for Health.