Save a Million

Australia:

NCD Prevention

While the pre-COVID prevention funding system had been extremely successful in the past 20 years in reducing communicative disease deaths globally, it has not been able to reduce non-communicative disease (NCD) and injury mortality.

There are many effective programs which can save lives and costs from these burdens – such as programs preventing pre-diabetic progression to diabetes, stroke, avoidable blindness, mental disorders and neonatal diseases.

For examples of proven public policy interventions see research such as Assessing Cost Effectiveness in Prevention, which shows how to prevent NCD burden while saving costs. In that publication, the dominant interventions would save a net $6.4 billion in responsive healthcare costs.

An example of a savings program is Resolve.

Resolve is a recovery-orientated community support program which combines a residential service for periodic crisis care integrated psychosocial, medical and mental health support; and a help line for after-hours support from peers.

The program is delivered by Flourish Australia, a highly experienced mental health service provider.

The program is expected to generate significant savings for the NSW Government through a reduction in participants’ utilisation of health and other services, in particular by reducing the number of days spent in hospital. These savings, when achieved, will be reinvested to enable the continued delivery of the Resolve program.

Over the past decade regulations, systems and markets have been developed for reinvestment in effective programs to scale them to their optimal size. There are plenty of technical tools, examples and experts available, such as the Government Outcomes (GO) Lab, Urban Institute – Pay For Success, Social Finance, Third Sector Capital and Nonprofit Finance Fund – Invest in Results.

This work began when the Global Financial Crisis threatened traditional grant funding. With traditional funding affected by much larger COVID-caused recession and debt levels, now is the time when program providers need to develop credible savings reinvestment proposals and governments need to pursue them.  

Governments in the UK have entered into over a hundred reinvestment agreements, the most of any country. An example is the Ways to Wellness program.

Below are some key terms and links to relevant knowledge hubs about them.

Social impact investment

This is any investment with a view to any amount of social and financial return. Those with paying consumers (such as green electricity) do not need governments as the investors.

Performance or Outcomes Based Funding

This is any type of agreement for which the funding is dependent on results. They are usually government funded. This Results Based Funding Database has plenty of examples, many from developing countries. These can be done through end-of-program payments when overall targets achieved.

Reinvestment for achieving overall targets

Large scale versions are known as Social Impact Bonds (SIBs), or Pay for Success (PFS) in the US. These are agreements where funding is dependent on final outcomes. Because any payment is only made at the end of a program (usually after 3-5 years), program capital is provided by investors who take the risk for whether the program succeeds. See this PFS Projects Infobase for US programs and this SIB / PFS database for programs around the world.

Reinvestment per incident prevented

These potential payments are more frequent and so do not require special capital investor arrangements. The financial risk is held by the program provider. The basis for rates agreed per incident prevented are often called Outcomes Rate Cards. Summaries about them are at socialfinance.org/rate-card and investinresults.org/rate-cards. Some examples: a simple Outcomes Rate Card was used in the UK to deploy £30 million to reduction projects through contracts with six providers to serve up to 17,000 at risk youth. The most recent example in Australia is on homelessness. Jobactive providers in Australia place around 1 million people on welfare in jobs every 3 years. There are 42 providers operating over approximately 1,700 sites who are repaid on the basis of agreed outcome rates. Repayments of A$7.3 billion are projected over 5 years.