Supersize what works!

By Esther Dyson

As the founder but not the CEO of HICCup, my job is mostly to interfere – to let the team and the five Wellville communities run the show, but to push for us to go faster. The communities are now moving towards launch – determining what projects to roll out and how to do so.  I’m noticing a tendency to think in terms of pilots: We’ll try this. Let’s test this obesity program in one class in one school.

But when McDonald’s opens a new store, it’s not a test (though it may test one menu item against another). It’s a new store, expected to operate effectively and to make a profit like most McDonald’s stores.  The initiatives we are planning are likewise not exotic new experiments, but well-known programs with predictable results. Yes, they depend on trained people to carry them out, and they are being offered to people who greet them with varying degrees of enthusiasm…  But the whole point of the Way to Wellville is to help communities apply well-known techniques in sustained initiatives that are accountable, measurable and ultimately fundable.

What we’re looking for are not pilots of an idea, but rather implementations of known approaches. By now, it’s clear that you can dramatically improve a variety of measures of health if you properly prepare girls or women for giving birth, provide effective early childhood education, provide access to healthy affordable food, address people’s mental health and substance abuse issues, solve transportation problems and so on.

The challenge is to do so at scale.  In the commercial world, there are mechanisms for doing so, primarily franchised operations or stores, branches or outlets of various kinds of services. There’s a process that scales and that can be replicated widely.  (And there’s an incentive for it to scale – both to the local partners and to the owner or investor that funds the scaling.)  It’s this combination of tested operating processes and of the profit motive, which provides both incentives and accountabilty, that HICCup aims to bring to the production of health.

Supersize in many places… 

That means that in many cases we’ll be working with partners, such as the nonprofit Nurse Family Partnership, or an early childhood education program, orSchool Food Focus, an organization that helps school districts not just reimagine but re-engineer their food programs.  Hint: It’s more about logistics and procurement than about the complexities of nutrition science or personalized medicine.  (And to be clear: School Food Focus works with larger communities than ours, but we hope to learn from them.)

To scale like this in practice, you need both the (usually) external expertise and local implementation capabilities.  People need to be trained, goals need to be set… and yes, somehow the effort needs to be funded.  In some cases, there’s local money available, whether it’s from Medicaid’s newly expanded remit, or from local benefactors or even tax revenues.

But more often, the initial investment needs to come from outside. That could be foundation or government grants, but it can also be investors who want a return.  They are more likely to believe in a vetted program… and the capacity for training, for modeling and predicting outcomes, is also there.

So right now our mission is to match these programs and investors with local partners… both for implementation locally and for initial investment from outside.

But that investment ultimately needs to be repaid, usually from local value creation (often in the form of savings vs. what would have happened without the investment).  For example, who saves when pre-term births and NICU use drops dramatically – the standard experience when Nurse Family Partnership comes in?  Who saves when the transitions to diabetes, and later to diabetes-related morbidities, reduces? Usually it’s a combination of Medicaid and the various health payers, though employers, welfare budgets and the like also benefit.  Our second job is figuring out how to get these benefiting institutions to agree to share their cost savings with the investors in a complex, long-term contract.

Such contracts are common in everything from infrastructure projects to the Social Impact Bond projects (aka Pay for Success).

Obviously, such projects will be complex and slow to stand up. But for that very reason, we plan to do them not as pilots – with, say, 200 schoolchildren or 300 pre-diabetics.  The overhead of creating the financial, reporting and legal structure would kill the profitability of the project and produce negligible impact.

We know these kinds of initiatives work, and so we plan to do them at scale. That’s the whole point: We may be experimenting with financial incentives, but we are in the business of changing communities, not of exploring with tentative projects.

Accelerating Change in Wellville

Prepare communities to succeed
•    leadership/alignment
•    operations/capacity
•    business case/willingness to pay (or share gains) based on outcomes

Recruit major partners and investors
•    evidence of effectiveness
•    scale to implement in five community sites
•    willingness to contract using new financial models

Of course, the local entities in charge of the projects will be experimenting in the small, like any startup.  They’ll be refining their training programs, tweaking their messaging, trying out new incentives to encourage healthy behavior. But they won’t be experimenting any more than someone opening a franchised restaurant is experimenting.

What is experimental in the HICCup approach is the financial underpinnings to accelerate large-scale change. To be sure, we are not alone; there are many institutions now working on various kinds of social-impact finance…but there’s still limited deal flow – i.e. few actual opportunities structured for them to invest in.

To make this approach pay off for Wellville investors, we need partners working at a scale large enough to drive efficiencies and community-level impact.  Indeed, that means that the first few such projects are likely to have a philanthropic component in terms of, say, non-recourse loans or grants to work out the legal structures. But the overall idea is to implement, at a scale that makes a meaningful and sustainable difference, not to pilot.