Federal Participation in Innovative Public Health Financing: the Social Impact Bond Act (HR 4885) and the Pay for Performance Act (S.2691)

Abstract

Social impact bonds (SIBs) are relatively new financing mechanisms that can be used to finance public health initiatives addressing issues such as asthma and infant mortality. Since 2010, when the world’s first SIB launched in the United Kingdom, several states and local governments in the United States have either launched SIBs or taken steps toward launching one. Legislation has recently been introduced in both chambers of Congress that would allow for a greater role in these arrangements. A bill introduced on June 18, 2014, to the US House of Representatives with bipartisan support would assist the efforts of state, tribal, local, and territorial (STLT) governments exploring SIBs. That bill, House Bill 4885, would authorize the federal government to enter in SIB arrangements with STLT governments. A similar bill, also with bipartisan support, was introduced in the Senate on July 30, 2014. The Senate bill, S.2691, mirrors the House bill to a large extent but contains some notable differences.