As outlined in our article About the Health Impact Transfer Institute, medical prevention is a key concern of the institute. We are aware of the significant lack of funding for both research and concrete projects that explicitly try to avoid specific medical conditions.

Sadly, the main motivation for most stakeholders in the healthcare sector is directly or indirectly based on the sufficient number of patients. This is to some extent logical, understandable and perhaps unavoidable, but the unapologetic fervor with which some entrenched institutions are defending some their reluctance to change is indeed heart-wrenching, considering that they involve continued yet possibly avoidable suffering by generations.

Many preventive measures are indeed expensive. The desired health outcome might be a reduced mortality rate along with the discovery of otherwise undiagnosed patients who would otherwise continue to live in great discomfort. Any healthcare system has to make some tough decisions about what to invest in, based on explicit value judgements, making sure that the planned or realized investments are effective and in accordance with the set goals. This is not an easy task and many countries struggle with these challenging choices. This applies to both more affluent nations and to those at a different development stage.

However, there is a significant subset of preventive measures that can actually be cost-saving, especially if the undiagnosed and untreated condition is costly or results in catastrophic emergencies that could have been partially avoided altogether. Health economists will point out that the long-term effects, especially when accumulated in a population over many years, are also a very significant factor that might even outweigh even significant immediate costs.

Once the payor in any given system recognizes this effect, it should be a reasonable decision to make the necessary investments in order to prevent these future costs. However, in many cases, there are a number of obstacles to such an approach:

  • first, there are often simply too many other things to do, as many institutions and health care professionals are already challenged to secure an adequate level of service (crowding out dilemma);

  • second, there are usually not enough resources available at any given moment to prioritize more long-term, less immmidiately effective activities (urgency bias);

  • third, in most cases there is insufficient medical evidence from clinical studies that give a degree of certainty commensurate with the fiduciary respnsibility of the payor to expend their resources judiciously (uncertainty bias).

As has been pointed out repeatedly in the pertinent literature, allocation of scarce health care resources encompasses the evaluation of alternative courses of action. The outcomes of these different choices are often uncertain and fraught with risks which themselves need to be studied and assessed.

One solution is to disintermediate these risks by transferring the financial loss resulting from a measure not having the desired health and economic effect to a third party, i.e. a typical investor, defined as someone who, in exchange for an appropriate chance of profit, will take on more risk than a given payor. Because the payoffs of prevention can be significant, there is more than enough room for a feasible profit margin for both the healthcare payor and the financial investor, while of course also contributing to the attainment of public health goals.

In economic appraisals of health care programmes two aspects are of paramount importance. First, budgetary considerations should always be based on medical assessments in terms of health outcomes, meaning that finanial considerations can only be a part - albeit an important one - in the overall analysis. It has to be stressed, that the economic cost of a particular action within a health care system is not only monetary, but also the forgone benefit of measures that could otherwise have taken place. Which leads to the second aspect, namely that the option of ‘doing nothing’ is also a choice and that simply keeping the status quo is a course of action that also needs to be evaluated against possible alternatives.

Services like Health Impact Transfer can help alleviate this conundrum for health administrators and decision-makers.