Tag Archives: social enterprise

Idea: Social Impact Bonds for mental health

The case for improved mental health services

The consequences of poor mental health on human well-being are becoming more widely understood, as are their impacts on other areas of society such as use of drugs, violence, lack of productivity, obesity, lack of creativity, unemployment, smoking and other addictions. Improvements in mental health can cause a cascade of positive multiplier effects throughout society.

Social Impact Bonds as a concept

As noted in my recent post on tackling homelessness, I am fascinated by the potential of Social Impact Bonds to help drive positive social change.

One idea that really resonates with me is the use of Social Impact Bonds to drive positive change in people’s mental health.

Inspiration for the idea

I was inspired by the potential for improvements years ago after reading Healing Without Freud or Prozac by the late Dr David Servan-Schreiber (which was once lent to me by the late Ismena Clout).

In the book, Dr Servan-Schreiber talks about combatting depression with the following:

  1. Meditation and heart coherence
  2. EMDR (Eye Movement Desensitization and Reprocessing)
  3. Maximising exposure to natural light
  4. Acupuncture
  5. Omega-3 Fatty Acids
  6. Exercise
  7. Social Interaction and Emotional Communication

Most of these activities can be undertaken by a beneficiary without any qualified medical assistance, which made me think that this would be an ideal area for a for-profit company or social enterprise to provide a service that would support sufferers of depression.

Indeed, people like Tony Robbins have companies focussed on this area with many of these areas being employed.

However, with Tony Robbins, the emphasis is on the beneficiary directly paying for services themselves. This means that many people that are not currently in a financial position to access the services can benefit.

Use of Social Impact Bonds to reward positive outcomes

What if a company or social enterprise could provide beneficiaries with all the benefits of this approach at no cost at the point of use but instead could be rewarded by a government or health service for delivering the beneficial outcomes?

I drafted this paper below on the back of the idea that Social Impact Bonds could be used to reward social enterprises for just this:

Concept Paper_ Social Impact Bonds for Improved Mental Health

Originally I designed this business so that it could be implemented by a Tony Robbins company because I am a big fan of the work they do to help people achieve transformational change in their lives. However, it could be undertaken by any organisation with a mission to help people make positive change in their own lives.

Below is a diagram explaining the value flows in the concept (note in this diagram I referred to beneficiaries as “patients”, which is not a terminology that I would use anymore):

Diagram: Social Impact Bonds for Mental Health

Risks and risk management

One major risk of this approach is that it could contribute to “privatisation of the UK’s National Health Service (NHS) by stealth”, with private sector organisations slicing off more and more of the NHS’ workload and sweating the assets for profit in the way that UK train franchises have done.

This could be mitigated by the fact that a lot of these activities are things that can be undertaken by individuals without any form of medical intervention, such as regular exercise, socialising, and improved diet. Therefore these would fall outside of current NHS services and would carry a low risk of this.

Another challenge is whether or not the activities would count as, or have the perception of, being medical treatment and therefore need to be regulated.

For the same reasons above, I think a strong argument could be made that this is not the case. Effective protocols that signpost beneficiaries to NHS services should be in-built so that the NHS and other authorities can have confidence that the social enterprise is not masquerading as a healthcare provider, but a “wellbeing-support provider”.

UK Government support

It’s interesting to see that the UK Government also sees the potential for Social Impact Bonds to stimulate change, as they have launched an Inclusive Economy initiative that includes a funding stream for Social Impact Bonds.

Contact me to discuss

I’d welcome any contact via my contact page from anyone interested in starting a social enterprise in this field. I’d be happy to share my ideas for potential methodologies that exist for the service, as well as potential funding streams to launch a pilot project.

Tackling Homelessness with Social Impact Bonds

One of the methodologies to achieve positive social change that really interests me is the concept of Outcome-Based Payments.

I recently saw a great example launched by The Big Issue, one of my favourite charitable organisations.

Homelessness in the UK: the challenge

Shelter estimates that there are about 300,000 people classified as homeless in the UK, with the National Audit Office estimating that there are about 4,450 people sleeping rough on any given night.

These are shamefully high numbers in such a rich and developed society as the UK.

How do Outcome-Based Payments and Social Impact Bonds work?

Social enterprises and charitable organisations target the social improvements that they want to achieve.

They find the relevant local authorities that would benefit from having these challenges dealt with and then enter into contracts with them. These contracts guarantee that the organisation will receive a certain payment once a measurable improvement has been made, known as an “Outcome-Based Payment“.

The organisation then provides the service in question and measures progress via the agreed methodology. Once this agreed target has been met, the local authority releases the agreed payment.

Of course, there is a delay between the provision of the service and the payment, meaning there is a need for startup capital. This capital can be issued in the form of a bond that is linked to the future income stream of the Outcome-Based Payments. Therefore, these bonds are often referred to as “Social Impact Bonds“.

Why are Outcome-Based Payments important?

This is a great model for local authorities because it means that the payments are made only after successful outcomes are achieved.

This means less taxpayer money is wasted on schemes that don’t work and it also means that funds can be diverted to the most effective strategies, obtaining maximum impact for the local authorities.

Big Issue Invest, the social investment arm of The Big Issue Group, launched the £10m Outcomes Investment Fund to target just these sorts of opportunties.

How could this work for homelessness?

Big Issue Investm via its Outcomes Investment Fund, has backed Changing Lives in its target to get 150 rough sleepers in Newcastle and Gateshead into long-term accommodation.

Source: The Big Issue, November 20-26 2017

I think this is a fantastic model that has potential to stimulate improvements for many other social challenges, such as mental illness.

What other organisations invest in Social Impact Bonds?

A non-exhaustive list of organisations that would make these sorts of investments are listed here.