In follow-up to our introductory post, this post is intended to answer three frequently asked questions associated with the SIB model.
- Are SIBs a privatization of social services?
- Why are SIBs needed?
- Shouldn’t we wait for the concept to be proven?
1. Are SIBs a privatization of social services?
No. SIBs are meant to fund preventive programs that otherwise would not exist. SIBs do not replace existing services. The savings associated with a SIB are realized by slowing the growth of acute care delivery (e.g., operating less prisons, carrying out less emergency medical procedures, providing fewer people with welfare); in other words, saving money by creating a healthier society. A valid argument is made around the difficulty of realizing cashable savings from slower future growth, but that is a challenge that has been addressed in other sectors and can be addressed here as well. SIBs are not alleviating the work of government to provide basic services, but rather creating a situation in which less basic services are required.
Social impact bonds must also be seen as part of a broader solution. SIBs are meant to catalyze a shift in spending from acute care to preventive care and support a transition to results-based budgeting (by supporting development of new data systems). Medical doctors and academics alike have been calling for a greater emphasis on preventive care since the 1960s, but we have lacked the tools for execution. Well-intentioned governments have been unable to prioritize preventive spending because money has been required for high-cost acute service delivery. Unable to invest in prevention, the need for acute services has only risen and we have been caught in a cycle of reactionary spending. The SIB model injects new money in the system to break out of this cycle. Once we have created an ecosystem of preventive programs the SIB model is no longer needed. The SIB model acts as a priming mechanism to enable a broader shift in policy and identify what preventive programs are most effective at achieving the results we desire. This catalytic use of the SIB model should further alleviate concerns of system privatization.
Once we accept SIBs as part of our broader solution we can further dismiss the idea of system privatization by realizing that we are already comfortable with organizations delivering discrete private services throughout the public system without making the system privatized (e.g., equipment suppliers, consultants, certain outpatient centres).
2. Why are SIBs needed?
SIBs are needed as a catalyst (as discussed above). The SIB model allows rapid expansion of preventive programs and provides year-over-year financial stability to service providing organizations. Other government-only initiatives could shift funding to preventive health programs, but such a system-level change is difficult to accomplish without deep collaboration. The SIB model is particularly useful because it provides a formal mechanism, which we can use today, to align the motivations of people across traditionally isolated sectors (non-profit, public, and private). Rather than demanding our government design a solution in isolation and then seek the participation by NPOs and the private sector, SIBs bind parties together through co-development and formal lines of accountability.
3. Shouldn’t we wait for the concept to be proven?
The SIB model supports a conversation on outcomes, rather than outputs. The model also supports collaboration among traditionally divided sectors of the economy, injects new funds into our social system, and allows the expansion of successful preventive programs. Since 2010 we have seen SIBs work in the UK, US, and Australia to enable interventions that otherwise would not exist and bring together parties that otherwise would not collaborate – to this end the model is already proven.
The results of the initial SIB supported intervention, launched in the U.K. in 2010, will be more indicative of the success of the particular intervention, rather the model itself.