Social impact bonds and their application to preventive health

Aust Health Rev. 2013 May;37(2):199-204. doi: 10.1071/AH12238.


Although preventive health in Australia has been acknowledged as central to national health and wellbeing, efforts to reform the delivery of preventive health have to date produced limited results. The financing of preventive health at a national level is based on outcome- or performance-based funding mechanisms; however, delivery of interventions and activities at a state level have not been subjected to outcome-based funding processes. A new financing tool being applied in the area of social services (social impact bonds) has emerged as a possible model for application in the prevention arena. This paper explores key issues in the consideration of this funding model in the prevention arena. When preventive health is conceptualised as a merit good, the role of government is clarified and outcome measures fully articulated, social impact bonds may be a viable funding option to supplement core public health activities. WHAT IS KNOWN ABOUT THE TOPIC? The complexities of outcome monitoring in preventive health are well understood.Likewise, the problem of linking funding to outcomes from preventive health practice has also been debated at length in health policy. However, not much is known about the application of social impact bonds into the preventive health arena.WHAT DOES THIS PAPER ADD? This paper discusses the limitations and opportunities facing the application of the social impact bond financing model in the preventive health arena. This has not been undertaken previously.WHAT ARE THE IMPLICATIONS FOR PRACTITIONERS? Social impact bonds have received significant recent attention from federal and state government treasury departments as potential financing tools for government. Health policy practitioners are watching this space very closely to see the outcomes of a New South Wales trial. Health promotion practitioners and primary care practitioners who deliver preventive services will need to keep abreast of this issue as it will have significant impact on their practice if states and territories introduce outcome-based funding processes.

MeSH terms

  • Australia
  • Financing, Government / organization & administration*
  • Humans
  • Models, Organizational
  • Primary Prevention*
  • Social Work / economics*