Leaders in Investment Community and Monarch Support Measure
On December 6, 2012, the New Jersey Assembly’s Commerce and Economic Development Committee approved on a 6-0-1 vote a pay-for-success measure to fund and expand preventative healthcare programs.
The Committee passed A-3289 which would create a pilot program, which opens the door to Social Impact Bonds, a type of pay-for-success contract. The Assembly Appropriations Committee will now consider the bill where it will be amended.
The goal of the NJ Social Impact Bond Act is to improve healthcare in New Jersey without using taxpayer dollars. Social Impact Bonds have the potential to help end homelessness by funding the Housing First model, which could potentially provide significant savings in emergency room and hospital care for the chronically homeless.
“The public health crisis plaguing Camden City and many of our state’s urban centers has to be addressed,” said Assemblyman Fuentes. “Opening the door to new resources while reducing government costs is crucial to building sustainable programs that improve quality of life while not burdening taxpayers.”
A-3289 has received widespread support, including testimony by Monarch, with several leaders of the investing industry submitting testimony in favor of the legislation.
“Assemblyman Fuentes and Chairman Coutinho should be commended for leading New Jersey in the pursuit of these innovative projects that change the way government allocates and invests its resources by focusing on results,” Geprge Overholser, founder and CEO of Third Sector Capital Partners said. “Pay for Success and Social Impact Bonds have the potential to improve the lives of New Jersey’s most vulnerable residents while generating valuable fiscal savings for the state.”
“As the legislators of New Jersey have demonstrated, there is an imminent need to rethink the way critical social service programs are funded in the face of unprecedented budgetary constraints,” added Tracy Paladjian, CEO and Co-Founder of Social Finance. “We are excited about New Jersey’s exploration into social impact financing and the role commercial capital can play in expanding social services in the state.”
“We know that prevention is a better investment than paying for care in the ER or hospital,” said Rick Brush, CEO of Collective Health, which has pioneered the development of Health Impact Bonds and is leading related projects throughout the U.S. “The challenge is that most of our health care dollars are spent after people get sick. Health Impact Bonds allow us to expand proven prevention programs to a much greater number of people who will benefit.”