Innovating to protect seniors – the Social Impact Bond
The Globe and Mail has produced a series of stories on falling seniors recently, highlighting an opportunity to save healthcare costs by improving preventative measures. One in three seniors over 65 experience a fall at least once a year, causing a range of injuries from head, wrist and hand injuries to back problems and hip fractures. The costs associated with falls are massive – around $3 billion in Canada - without taking lost productivity into account.
Fall prevention is not an issue that gains a great deal of attention, largely because small falls - which could be symptoms of more serious problems and thus precursors to large falls- are often not taken as seriously as they should be. While fall prevention programs have been instituted by many hospitals and other healthcare facilities around the country, there is still a need for giving prevention greater priority. Generally, funding preventive care is considered risky because it is often difficult to identify and measure outcomes. Should preventive investment in seniors falls be considered risky?
One social finance tool gaining popularity is the Social Impact Bond (SIB), which are financial instruments that raise private capital for social outcomes. Since private investors fund the intervention, government risk is reduced and a source of financing is provided for social service agencies. The dedicated resource page on SocialFinance.ca provides a fuller description, along with articles and related news on this model.
SIBs are early innovations but are gaining global attention. These policy instruments can be effective ways of providing social services if certain criteria are met. In the short term they can act to pilot social innovations (e.g. tools to counter unanticipated aging adversities); in the long term, SIBs can re-vision how government and investors support the introduction and adoption of progressive and cost effective approaches focused on prevention. SIBs address a well-defined, target priority area that has established outcome metrics that can lead to demonstrable cost savings. This requires government support for SIB feasibility studies and establishing public-private partnerships.
Fall prevention can be an issue that SIBs deal with, as the population is well defined. There is a clear logic to the intervention, outcomes can be measured in a number of ways and the potential cost savings are huge – clearly characteristics worthy of a conversation. Governments can move forward without assuming a great deal of risk or having to make large investments, since payments are made only when targets have been met – a new way of dealing with healthcare costs. The private and nonprofit sectors have an incentive to find the best possible solution, thus prototyping solutions on the government’s behalf. The challenge is primarily around successfully creating a partnership to move forward. As the first batch of baby boomers reaches retirement age, elderly care is going to be an increasingly important issue. At the very least, social impact bonds should be explored as policy options.