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Double outcome of preventative care

So far, the twenty-first century has seen significant increases in society’s healthcare costs. One way of reversing this trend in the public sector is to work with preventative healthcare. The Swedish municipalities of Botkyrka and Örnsköldsvik have invested SEK 40 million in a social impact bond to reduce short-term sick leave.

Healthcare costs in Sweden increased by approximately 140% between 2001 and 2016. With an aging population living increasingly long lives, and sharp increases in lifestyle-related diseases such as type 2 diabetes, major preventative measures are demanded to meet future healthcare requirements.

One step in the right direction would be to reduce sick leave, which in the municipal sector alone currently equates to 50,000 full-time working days annually. The social impact bond projects in Botkyrka and Örnsköldsvik focus on efforts to reduce short-term sick leave.

"Short-term sick leave is a huge expense, costing us SEK 70 million each year,” says Ingrid Wibom, HR Director for Botkyrka Municipality.

Any member of staff with four separate sick absences or more within a 12-month period will be called to a meeting at which the employee and their line manager will agree on any necessary measures or job adaptions that might be necessary to prevent further sick leave.

New routines for reporting in sick reduces absence

Another new procedure adopted by both municipalities is that employers report their sickness to a health support function, where nurses ask follow-up questions, offer advice and/or pass the individual on to the normal healthcare system.

“This often results in the person ringing in going to work anyway, Others have received improved support via the health support function or help to do something about whatever has made them sick,” says Ingrid Wibom.

Less short term absences provide profits

In order for the project to break even, short-term sick leave needs to be reduced by approximately 10%. Larger reductions will leave both the municipalities and the private service providers in profit.

“Social impact bonds are an important tool for testing new types of initiatives. It should be easier to encourage stakeholders to invest in prevention if they know what benefits an investment may return, both human and financial,” says Tomas Bokström, project manager at the RISE Social and Health Impact Centre.

RISE’s role as an independent knowledge partner in the project includes proposing appropriate measures and contributing monitoring and measurement of effects.

Project give results

The idea of sharing risks and profits with private stakeholders has its origins in the United Kingdom, where a project began in 2010 in which private investors could get a return on their investment if they succeeded in cutting reoffending among released prisoners to a given level. The model, known internationally as a social impact bond (SIB), has been disseminated and on evaluation has demonstrated good results.

The three-year trials in Örnsköldsvik and Botkyrka commenced last autumn. As yet, no results are available; however, experiences thus far have been positive.

"Above all, the benefits are clear to see. We have worked with this previously; however, everything is now much clearer to both employees and managers, as well as politicians,” Nils Hörnström, HR director at Örnsköldsvik Municipality.

International attention

The projects have attracted international attention for their combination of public funding and private practitioners. The hope now is that more private-sector stakeholders will be attracted by the role of investor. Nils Hörnström sees no reason to believe that this type of private funding, and possible profits, should be a politically sensitive issue:

"No, I think there is a commonly held view on this: the most important thing is to reduce sick leave. We need motivated, healthy employees on hand who can provide a good service

Tomas Bokström is hopeful that the project will attract more private investment to social impact bonds:

"While everyone is talking up prevention, it is harder to achieve in practice.. It is difficult to make investments while the potential outcomes remain unclear; however, as more projects are put into practice, so the chances increase that more words will be translated into deeds.