Social Impact Bonds For Health Funding
7 July 2015 at 11:20 am
A new discussion paper proposes social impact bonds as a potential approach to meeting Australia’s primary health system’s funding needs.
Options for Finance in Primary Care in Australia – a Health Policy Issues Brief from Professor John Fitzgerald from the University of Melbourne and the Australian Healthcare and Hospitals Association (AHHA) – explores financing options in health care and calls for a closer examination of funding that links objectives to outcomes, including social impact bonds.
“Innovative and outcome-focused models offer potential to address challenges in healthcare funding,” Alison Verhoeven, Chief Executive of the AHHA said.
“In order to do so, broader concepts of financing must be acknowledged. Risk, outcomes, performance and responsibility need to be taken into account.”
The paper said social impact bonds can provide a mechanism that encourages private investors to take an interest in the health sector through incentives for performance while simultaneously allowing governments to mitigate their financial risk.
Social impact bonds take an outcome-focused approach and can promote innovation and broader social benefits.
“The role of the new regional primary health organisations (PHNs) in commissioning services provides a great opportunity to think more broadly about how we finance primary care in Australia,” the author of the brief, John Fitzgerald said.
“Commonwealth Government austerity and an interest from a wide range of stakeholders to mobilise capital from different parts of the economy have provided an incentive to explore new finance policy options for primary health care.
“However, recent reviews of primary health care finance have focused on contrasting the different payment systems, rather than the financing of primary health care in a more systemic sense.
“Finance is more than just an approach to payment, reflecting the flows of capital that structure service. Debates centred on payment systems (such as fee?for service, salaries, capitation, pay for performance and activity–based funding) tend to eclipse the conceptual underpinnings of primary health care finance.
“This issues brief explores policy options that move beyond payment systems. It approaches primary health care from a deeper perspective with a focus on how to link objectives to outcomes through different financing approaches.”
The discussions paper is available here.