The HICCup Manifesto

NEW YORK - It is hard to find anyone in health care who does not believe that spending $100 now on healthy behavior - exercise and proper nutrition, counseling for pre-diabetics, risk monitoring, and so on - could yield more than $200 in reduced costs and improved outcomes later. The numbers are fuzzy, of course, and there are plenty of methodological caveats, but there is little dispute about the desirability of such an approach.

And yet neither individuals nor communities seem to act on the basis of this knowledge. Individuals often lack willpower or access to healthy food or convenient exercise facilities, and are surrounded by poor examples that encourage instant gratification rather than effort and restraint. And, on a broader, institutional scale, the money spent and the money to be gained do not belong to the same pocket.

Instead of just complaining, I recently decided to create HICCup, the Health Intervention Coordinating Council, a self-appointed counseling service aimed at persuading local institutions to embrace a long-term perspective and launch a full-scale intervention in their communities. For practical reasons, there are a few guidelines - but anyone who wants to do this without following our rules is welcome to do so.

For starters, HICCup will focus on communities of 100,000 people or fewer. The majority of the community and its institutions must be enthusiastic. If most community members work for just a few employers and obtain health care from just a few providers, the effort of corralling the players will be easier. And, of course, community leaders - the mayor, city council members, and others - must work together rather than undermine one another.

So, how will this be funded? Not by HICCup. The trick is to capture some of what is being spent on health care already. As a rough calculation, assume $10,000 in annual per capita health-care costs, or $1 billion per year in a community of 100,000. (There are also all the separate costs of bad health, which are much harder to count or capture.) That money ultimately comes from individuals and employers who pay it in taxes, insurance premiums, or direct payments, and should be intercepted somewhere between the payers and the health-care delivery system.

Instead of spending $1 billion a year, imagine spending $1.2 billion the first year, but, say, only $750 million in the fifth year. That sounds like an attractive proposition - but someone must make the initial investment in exchange for a claim to the later savings. (And, one way or another, the investor will need to repurpose the health-care facilities and workers to some other role, including prevention, serving outsiders, or conversion to another use entirely.)

This is where the first miracle is needed - a benevolent but ultimately profit-driven billionaire or hedge fund, or a philanthropy that sees a way to do good while earning money for future goodness. There are a lot of billionaires out there, some with vision. There are health-care companies that might bite, hedge funds looking for large-scale projects and so-called social-impact bonds. There also are large employers that might decide to work with other employers in certain communities.

All of these entities would be taking a substantial leap of faith. But I think it is doable - especially if they work together to figure out the numbers, study the effects of small-scale healthy-living/preventive health-care efforts, and encourage one another to move forward. Regardless, each investor must work with existing institutions - if only to access revenue streams initially and benefit from the lowered costs later on.

Although grants are a nice source of funding for demonstration projects and research, only a for-profit approach that attracts broader investment will ensure that this scheme catches on. The funder makes a deal with whoever is responsible for the health-care costs: upfront investment in exchange for continued payment of the $1 billion yearly baseline, with the funder to keep the future savings against originally predicted costs. The money may be paid by employers, private insurers or government health-care funds (the trickiest source).

Community officials and voluntary organizations also need to sign on - or, indeed, they could drive the process and find the investors themselves. They could also contribute with complementary changes in school meals and gym classes; zoning and other planning measures to encourage cycling, walking, and the like; provision of health counseling; and perhaps by working with local restaurants and food stores to subsidize healthy choices and discourage unhealthy ones.

Indeed, HICCup will not choose which communities participate. They will choose themselves. HICCup’s role will be to advise them and help them to communicate and learn from other communities going through the same process. We also want to be a clearinghouse for vendors of health-oriented tools, services, and programs. There are many bargains to be struck between communities and vendors offering discounts in exchange for wholesale adoption of their tools or programs.

There is, however, one unbreakable rule: To work with HICCup, communities must collect and publish a lot of independently vetted data. For starters, they will need benchmarks of current conditions and projected costs, and then detailed statistics on the adoption of the measures, their impact and costs, and what happens over time. HICCup will spend a lot of time with lawyers and actuaries!

Indicators to be measured include not just rates of obesity, high blood pressure, and incidence of disease and related costs, but also absenteeism, school grades and graduation rates, employment statistics, accidents, and the like. Although the funder keeps the reduction in health-care costs, the community gets all of the many payoffs from a healthier population - including an enhanced reputation.

It is now time to try this on a broad scale. Five years from now, we will wonder what took us so long to get started. So, again, who will those investors be?

Copyright: Project Syndicate, 2013.

* The author, principal of EDventure Holdings, is an entrepreneur and investor concentrating on emerging markets and technologies.

by Esther Dyson