IIF Insights: Impact Investing in Preventive Healthcare

Healthcare costs are rising in Canada. The major drivers of healthcare costs are: (1) prevalence of long-term, chronic health conditions, and (2) labour costs. Those paying for healthcare (insurance companies, government) can reduce this financial burden if the population becomes healthier, and long-term conditions such as diabetes, cancer, and cardiovascular diseases become less prevalent.

There is an opportunity for impact investors. There is a clear need to fund initiatives that prove the effectiveness of preventive healthcare methods. Once the evidence is concrete, healthcare policy makers and private insurance companies can make a case for shifting resources towards covering methods like Integrative Medicine. Impact investors may be able to fill this gap through using emerging investment tools, such as Social Impact Bonds, Health Credit Markets, or supporting pilot projects with private insurance companies.

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