Calif. Program 1st to Test Social-Impact Bonds for Health

Fresno, Calif., where one in five children is affected by asthma, will be the site of demonstration project aimed at enticing private investors to fund programs to manage the disease via social-impact bonds, The Fresno Bee reports.

The Fresno project is the first in the country to apply the funding method, also known as “pay for success,” to a health-care initiative. Investors in social-impact bonds are promised a return if a program shows measurable results. To date it has primarily been used on efforts to reduce recidivism among ex-prisoners.

The California Endowment put up $600,000 to launch the asthma effort in partnership with Collective Health, a Connecticut social-enterprise firm, and Boston nonprofit Social Finance. The two-year pilot project, involving some 200 lower-income children, aims to show that low-cost, in-home tools to manage asthma can reduce costly emergency-room visits.