Reform Scotland

Preventative health care and social impact investing – Ian Marr

Sir Elton John is a name we normally associate with ‘Candle in Wind’ and similar hits rather than with ground breaking innovation in health care. But the work of the Elton John Foundation has come to the attention of the UK Parliament with Sir Elton addressing MPs in November 2023.

The Foundation established an innovative, preventative health care service using social impact investment as the financing model.

The Zero HIV project was initiated in the London neighbourhoods of Southwark, Lewisham and Lambeth which have some of the highest rates of HIV in England. It was estimated that 1,000 local residents were unaware that they had HIV. The Zero HIV project financed an ‘opt out’ system of blood testing when people engaged with A & E departments, or other health care facilities, in order to facilitate early identification and treatment of HIV which is much better for the individual and much more cost effective for the health system. Between 2018 and 2021 the project tested 265,000 people and more than 460 Londoners with HIV entered treatment – over 200 people received a new diagnosis and entered care and over 250 who had stopped treatment returned to care.

By ensuring early treatment this project is estimated to have released £90m to the health care system – this is money which can be used at the discretion of health professionals to address emerging health needs in other areas. (£200,000 of costs are avoided each time someone living with HIV is engaged into care).

As a result of the effective impact of the Zero HIV project the HIV Action Plan in December 2021 announced £20m of funding for emergency department HIV testing in areas with very high incidence of HIV.

This is an example of preventative spending in practice – and it works! The fact that it worked stimulated wider systemic change shifting significant resources to further preventative spending which, in turn will create additional value and release additional funds to be used at the discretion of healthcare professionals.

Everyone agrees that we need to move to much greater use of preventative spending. The problem is that budgets are usually entirely consumed on firefighting activity. This firefighting activity is crucial and can’t simply be abandoned in preference to preventative spend – no matter how effective that preventative spend is in the medium to longer term. So the key question is how do we actually move some budget to preventative spending in the real world and move beyond fine words about the importance of such spending.

Key to the impact of the Zero HIV project was the nature of the funding mechanism which made it possible. Essentially it used Social Impact Investment, the value of which is explored in more detail in Reform Scotland’s ‘Investing for Good’ report.

In Social Impact Investment a service delivery organisation in the community agrees a set of mutually desirable outcomes with a public sector body. For example, a service which is being developed to support women experiencing substance dependency in Glasgow where the outcomes relate to individual women achieving a drug free lifestyle.

In Social Impact Investment, third party Investors provide the working capital to cover the cost of service delivery until the agreed outcomes are achieved. When these outcomes are achieved and evidenced THEN the public body pays for each outcome. The revenue generated from these outcomes is used to repay the investors who could be private individuals, philanthropic foundations or institutional investors.

This financial structure ensures that the public body only pays for outcomes that are definitely achieved, effectively providing a 100% guaranteed impact of the spending. This makes it much easier to justify preventative spending – the preventative impact is guaranteed before payment is made. The financial risk of non-completion of outcomes is carried by the investors. Crucially, this provides the missing bridge in funding which allows a preventative service to be created and delivered in advance of the payment for that service.

Social impact investment as a financing structure could be used in a wide range of preventative services – we have noted the opportunity to use in addressing Scotland’s challenging relationship with drugs which bring misery to so many individuals, families and communities. It could also be used to create services supporting those young people who are experiencing poor mental health but whose diagnosis does not reach the tariff which would offer them access to NHS Child and Adolescent Mental Health Services – services which have been under consistent pressure in recent years. This financial structure has been used in a number of health care settings e.g. 

  • The End of Life Care Incubator in Waltham Forrest which reduces attendance at A & E departments and enables people to receive appropriate palliative care in their own homes
  • The Ways to Wellness service in North East England which uses Social Prescribing to enhance the quality of life for people experiencing long term health conditions like COPD, Diabetes or Asthma and consequently reduces demand on healthcare systems.
  • The Enhanced Dementia Care service in Hounslow which is designed to deliver integrated care plans and reduce non-elective admissions through effective preventative care

If we are serious about reforming elements of our health service and serious about implementing preventative healthcare, then we must find pragmatic ways to initiate preventative spending which go beyond laudable aspirations but rather create actual action – only then will we start to see real impact in the lives of real people in real communities. Social Impact Investment offers one tool to achieve the reforms which will create real change.

Ian Marr is the Chief Executive of The Growth Partnership

If you would like to contribute to Reform Scotland’s NHS 2048 forum, please email [email protected]