Boston-based and , a Connecticut-based social enterprise that is working to create a market for health impact investing, have announced a two-year, $660,000 grant from the to lay the groundwork for the first health-focused social impact bond in the United States.
The grant will fund a project in Fresno, California, to reduce asthma among low-income children and the costs that result from emergency room treatments, thus demonstrating the social and financial benefits of up-front investment in asthma management and prevention. Through the project, two hundred low-income families with asthmatic children will be provided with home care, education, and support related to reducing environmental asthma triggers, from cigarette smoke to dust mites and other indoor air contaminants. Collective Health will use insurance claims data to measure healthcare cost reductions among program participants and calculate net savings from the project, while Social Finance will act as a strategic advisor and begin planning for the launch of a social impact bond to attract capital from investors and scale the program to an additional thirty-five hundred children.
The project will be designed and managed by the and , with technical assistance from .
"We know that prevention is a better investment than paying for care in the ER or the hospital," said Collective Health founder and CEO Rick Brush. "The challenge is that most of the nation's healthcare dollars are spent after people get sick. This project will demonstrate the financial value of expanding a proven prevention program to a much greater number of children who will benefit. We are aiming for a 30 percent reduction in emergency room visits and 50 percent reduction in hospitalizations, which would yield an approximate net savings of $5,000 per child per year. There's significant potential to make a real impact here."