Future of Healthy: How to Realize Returns on Health
January 26, 2016
World Economic Forum
This report focuses on the role of different stakeholders in shaping an ecosystem of health and how to use market forces to make such a system, and the associated returns on health (RoH), happen.
Maximizing Healthy Life Years (MHLY) are investments in preventing non-communicable diseases (NCDs) and mental ill-health. These investments can pay off and generate opportunities across all industries, not just typical healthcare players. All industries are becoming concerned about the health of consumers through the direct or indirect impact of products and services they use, the impact of corporate operations on communities, and the health of employees and the work environment.
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An ecosystem of health is always specific to a particular issue, i.e. the RoH sought. Such an ecosystem can align stakeholders with different perspectives around a common goal about desirable returns. The fundamental architecture of an ecosystem of health is based on two roles: health shapers and designers/deliverers. Health shapers who are motivated by social benefits, such as government and non-governmental organizations (NGOs) or organizations from the private sector, can utilize a range of mechanisms to (re)shape markets in a way that ensures delivering on health outcomes is a viable business. By setting standards and norms, aggregating demand or catalysing behaviour change, these health shapers align RoH with return on investment (RoI) and enable positive business cases for a second type of stakeholder that designs and delivers offerings. This report illustrates these concepts of ecosystem roles (shaping, designing, delivering) and includes multiple examples from different sectors and industries.
In some cases, RoH and RoI are already aligned in the current environment, delivering a short-term payback for private ventures. If they are not, health shapers can strengthen the alignment either by decreasing barriers or by creating additional incentives, such as cost/benefit sharing. Cost/benefit sharing is a renegotiation of costs and benefits and can take either the form of spreading the cost of improved health among stakeholders, sharing the benefits, or both. It can unlock the value of healthy living when beneficiaries of good health and investors are not aligned. This is particularly critical if the project requires a large investment but benefits different stakeholders.
An ecosystem of health creates the foundation for market-driven solutions to tackle NCDs and MHLY. Because markets depend on customers, the individual must be at the centre to make these ecosystems happen. The engine to set MHLY in motion is to increase both demand and supply for healthy products and services. The behaviour of individuals and their underlying habits and social norms play an important role in creating demand and ensuring supply translates into demand. On the other hand, important levers to translate demand into supply include financial viability, either by providing a short-term payoff or through attractive cost/ benefit sharing. Supply can also be driven by an attractive long-term payoff, often a combination of direct financial returns and indirect returns, such as a competitive advantage. Long-term payoffs are more durable with innovative financing models, such as impact bonds, or stronger ties of health impact to shareholder value, e.g. through inclusion of health in stock market indices.
Looking ahead, key areas for action are laying the foundations for ecosystems of health, shaping an individualcentric environment for MHLY and providing the tools and platforms for multistakeholder collaboration and innovation.
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