An increasing number of people are suffering from type 2 diabetes, but preventive resources are scarce. Therefore, Region Stockholm decided to try a unique approach: Issuing a health bond, with Skandia as the investor and SEB as the adviser and arranger.
The cooperation between the private sector and the region has strengthened the region's capabilities to combat type 2 diabetes.
This is how the health bond works
- The bond of SEK 30 million has a maturity of five years. The money will be used for preventative measures focusing on lifestyle habits for 925 individuals at risk of developing type 2 diabetes.
- The participants are chosen through a health survey and follow-up testing. A health coach thereafter develops a personal health plan for them.
- In addition, the participants get a grant to buy services – within areas such as exercise, food, sleep and stress – to help develop a healthier lifestyle.
- If these measures prove successful, the investor – Skandia – gets interest on its investment.
- The interest rate will be slightly higher than if Region Stockholm would have taken a regular loan. At the same time, the cost savings for Region Stockholm will be significant, compared to a scenario where the participants had in fact developed type 2 diabetes.
- If the preventive measures fail to achieve the desired health effects, however, Skandia will receive a negative return.
Newsarticle from Region Stockholm, Promising result after two years with the health bond (in Swedish)