SEB participates in issuance of unique Health Impact Bond

Region Stockholm has issued a Health Impact Bond of 30 million kronor that will be used to finance preventative measures for people at risk of developing type 2 diabetes. Skandia is the investor and SEB has been the adviser and financial arranger of the bond.The financial model for the bond is thought to be the first of its kind, even internationally.

“It’s incredibly exciting to be part of the development of financing solutions that can contribute to strengthening the preventative work within the healthcare system”, says Hans Beyer, Chief Sustainability Officer at SEB.

The majority of the healthcare system’s resources is used to care for those who are already ill, and it is difficult for the regions who provide the healthcare to finance preventative care models. The Health Impact Bond is a pilot that will be used to test a scalable model for cooperation between the public and private sector, in which the investors get somewhat higher returns if the preventative measures result in lower healthcare costs.     
The issuance of the first Health Impact Bond is the result of close cooperation between Region Stockholm and Skandia, which invests in the bond, and with SEB, which acts as structural advisor and financial intermediary.

Preventative Measures

The bond of 30 million kronor has a maturity of five years. The money will be used for preventative measures focusing on lifestyle habits for as many as 925 individuals at risk of developing type 2 diabetes. The participants will be chosen through a health survey and testing to confirm they are at risk of the disease. A health coach with thereafter develop a personal health plan and a so-called health balance to give the participants access to services that help promote a healthier lifestyle, including areas such as exercise, food, sleep and stress.

If the project is successful and results in cost savings for Region Stockholm, the investor Skandia will get a return that is somewhat higher than Region Stockholm would have paid for regular financing. If the project fails to achieve the expected health effects, and thereby cost savings, Skandia will receive a negative return. 

“This is a unique financing model that offers risk sharing for the region and enables prevention on a large scale”, says Hans Beyer “That will in the longer term reduce human suffering and lead to lower costs.”