This approach can ultimately reduce illness and the cost of healthcare and is an example of how we need to transform our thinking and approach towards healthcare
Region Stockholm’s health impact bond has been named social bond project of the year in Environmental Finance’s Bond Awards 2021. The annual awards ceremony is designed to celebrate the leading green, social and sustainability bond deals globally.
As part of an EIT Health project, the pioneering health bond scheme was designed to support the prevention of type 2 diabetes, improving the lives of citizens but also reducing costs to healthcare services.
“Instead of asking healthcare budgets to cover the cost of treating people when they get sick, the health bond provides pay-outs when people improve their health through preventative measures. This approach can ultimately reduce illness and the cost of healthcare, and is an example of how we need to transform our thinking and approach towards healthcare. Budgets cannot rise in line with demand, and we must move towards preventative models that are both achievable and deliver high-value outcomes. I congratulate the team on winning this prestigious award in recognition for their innovative solution to an age-old problem,” Jan Phillip Beck, CEO, EIT Health.
The EIT Health Project was started in 2017 and involved EIT Health Partners RISE, Stockholm Region, Karolinska Institutet, IESE Business School, West Midlands Academic Health Science Network, Semmelweis University and City of Rotterdam, as well as commercial partners MSD and Apoteket. At the end of the project, the spinout company, Health Integrator, was launched, and work began to design an investment model that could provide financial rewards for good health outcomes, resulting in the bond available today.
The bond is financed through a SEK 30 million loan (Health Impact Bond) from Skandia, an insurance company. If a participant develops type 2 diabetes, Skandia covers part of the cost, but if the participant is found to have reduced the risk of diabetes, Skandia receives a return of up to 10% percent of the investment. One unique aspect of the solution is that the Stockholm Region does not incur any costs in the first few years. After five years, the region would pay around SEK 23-33 million, depending on outcomes. There will also be savings if people stay healthy and do not require expensive care. Stockholm Region expects to receive up to 100% return on investment.
21,000 people at risk of diabetes are now enrolled into the programme. With the support of a personal health coach and tests, participants can buy preventative health services and products through the Health Integrator platform. Each user gets a “wallet” loaded with money to shop for selected health services such as nutritionist or smoking cessation against the plan set out with their health coach. In the short term, this leads to better health, and in the longer term, changed lifestyle habits can prevent them from developing type 2 diabetes and other chronic diseases, helping to prevent the increasing burden of type 2 disease, for individuals and for society.
“We are very honoured to receive the award Social project bond of the year. Just as Region Stockholm has played a leading role in the work with green bonds, we also have the ambition of being forward-thinking in the fields of social entrepreneurship and social financing. We have therefore developed a Health Impact Bond, which has a unique financial structure”, said Frida Korneliusson, CEO of Region Stockholm Treasury.
To read more about the project, please visit eithealth.eu/project/the-health-movement/