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  5. Mima City and Omuta City Start Projects utilizing the Social Impact Bond (SIB) System

Mima City and Omuta City Start Projects utilizing the Social Impact Bond (SIB) System

October 29, 2019

Since FY2016, the Ministry of Economy, Trade and Industry (METI), as part of its Project for Promoting the Creation of New Industries for the Enhancement of Healthy Lifespans,  has been advancing measures for supporting municipalities in introducing projects using the social impact bond (SIB) system and encouraging them to promote SIB-based projects in the healthcare ambit.

METI hereby announces that Mima City, Tokushima Prefecture, and Omuta City, Fukuoka Prefecture, successfully allocated the budget to SIB-based projects and started them, respectively. These are the cities to which METI provided support in developing such projects under the FY2018 Project for Promoting the Creation of New Industries for the Enhancement of Healthy Lifespans.

1. Outline of the SIB system

SIB is a public-private collaborative system in which the public sector commissions a pay-for-success project to the private sector in order to solve social challenges that the public sector is facing by utilizing the know-how and funds of the private sector.

The public sector sets target outcomes to be achieved and the private sector carries out efforts under their projects to achieve the targets. If the private sector successfully achieves the targets through their projects, the public sector pays returns to the private sector by making use of capital funds, i.e., funds that the public sector has invested for relieving social cost by enhancing efficiency in social matters.

This system has been diffusedworldwide, mainly in the United Kingdom, since the U.K. developed the world’s first SIB-based project in 2010.

2. Outline of the projects

(1) Mima-City Version of the SIB-based Vortis Conditioning Program

Mima City, Otsuka Pharmaceutical Co., Ltd. and Tokushima Vortis Corporation aim to contribute to the “Community Renovation of Beauty and Well-being” a program led by Mima City, and to encourage its citizens to enhance their health.With this purpose, the three parties will conduct the Mima-City Version of the SIB-based Vortis Conditioning Program.

Overview of the program

Purpose of the program To improve physical functions of people through the program and thereby to promote fitness habits among them and lead the habits to reducing the amount of benefits to be paid for medical or nursing care in the future.
Targets of the program 1,800 citizens aged 20 or older, who recognize their own bad posture or are suffering from chronic pain in their shoulders, back or other parts of their bodies, excluding those who need medical treatment or who have been receiving such treatment for sickness or injuries and those who have received a Certification of Needed Support or of Needed Long-Term Care.
Period Five years (from FY2019 to FY2023)
Details of the program Soccer team coaches of Tokushima Vortis will complete a program of physical training methods provided by R-body Project Co., Ltd., called “R-conditioning Project,” the company’s original personal training method for achieving better health conditions taking advantage of movement evaluation, and they will provide participants with the physical training program that they have mastered. In addition to the physical training program, participants will enhance training efficiency by making details of the program visible, e.g., nutritional support and ICT-based digitalization of daily activities, for eight weeks.
Scheme of the program
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Notes:

  1. Dr. Kono Ichiro, Emeritus Professor and Special Assistant to President, University of Tsukuba, will supervise the details and the entirety of the program.
  2. METI has commissioned the FY2018 Project for Promoting the Creation of New Industries for the Enhancement of Healthy Lifespans to The Japan Research Institute, Limited, and the company has been supporting the city in developing the program as part of the Project, playing the function as an intermediary.
Achievement indices
  • Number of participants in the program
  • Level of improvement in participants’ fitness habits
  • Level of improvement in data shown in a basic health checklist of target participants aged 65 or older
How to pay returns

Considering the predetermined amount of the entire program budget, Mima City will pay returns to the companies on a pay-for-success basis according to the achievement indices and the payment criteria. Considering the rest of the budget, the city will pay returns to the companies on a fixed basis.

Payment criteria:

  • Number of participants: The city will reduce returns if the number of participants falls below one-third of the target number.
  • Level of improvement in participants’ fitness habits: The city will reduce returns if the rate of participants who have improved their fitness habits accounts for less than 60%.
  • Level of improvement in data shown in a basic health checklist of target participants: The city will reduce returns if the rate of target participants who have improved their data shown in their basic health checklist accounts for less than 70%.
Total budget of the program Approximately 41.500 million yen

(2) Omuta City’s Project for: Supporting Patients who have Received a Certification of Needed Support Condition or of Needed Long-Term Care in Spending Independent Daily Lives by Themselves; and Preventing their Conditions from Becoming More Serious

Omuta City analyzed the certification level of patients who have received a Certification of Needed Support or of Needed Long-Term Care and who have been making use of outpatient nursing care facilities or outpatient rehabilitation facilities. As a result, it found that a certain rate of the patients’ health conditions has been degrading over two years, which is seen at every certification level. As the number of such patients who may receive a Certification of Needed Support or of Needed Long-Term Cares is expected to grow, the city is facing urgent challenges in keeping patients’ current certification level of Needed Support Condition or Needed Long-Term Care and Restraining the  degrading of these patients’ health conditions. To address this situation, the city decided to introduce a SIB-based project and will conduct the project to overcome the challenges.

The city called on applicant private businesses for a service provider under the project and selected Kumamoto Wellness Support Institute. Inc. through the examination of proposals submitted by applicants.

Overview of the project

Purpose of the project To maintain patients’ current certification level of Needed Support Condition or Needed Long-Term Care and restrain the  degrading of these patients’ health conditions, targeting patients who have been making use of any of all outpatient nursing care facilities or outpatient rehabilitation facilities in Omuta City.
Targets of the project All outpatient nursing care facilities or outpatient rehabilitation facilities in Omuta City
Period Four years (from FY2019 to FY2022)
Details of the project Based on the analysis results of a study on details of services provided at outpatient nursing care facilities or outpatient rehabilitation facilities in Omuta City as well as on the conditions of users of such facilities, the selected company will present tailor-made advice and instructions to the facilitates on how to improve their services. The company will introduce its own services, if necessary, and aim to keep users’ current certification level of Needed Support Condition or Needed Long-Term Care and to restrain the degrading of these patients’ health conditions.
Scheme of the project
Note: METI has commissioned the FY2018 Project for Promoting the Creation of New Industries for the Enhancement of Healthy Lifespans to The Japan Research Institute, Limited, and the company has been supporting the city in developing the project as part of the Project, playing the role as an  intermediary.
Achievement indices
  • FY2019 achievement indices: Proposals submitted by private businesses
  • FY2020 achievement indices: Same as above
  • FY2021 achievement indices: Proposals submitted by private businesses, provided that these indices should be those objectively indicating the improvement of life functions in a quantitative manner
  • FY2020 achievement indices: Rates of target patients who have succeeded in keeping their certification level of Needed Support Condition or Needed Long-Term Care
How to pay returns

The city will pay returns to the company on a pay-for-success basis as for the entire budget.

Payment criteria:
  • FY2019 achievement indices: The city will pay returns to the company only if the company has achieved the value equivalent to or beyond the target goals that it proposed to the city.
  • FY2020 achievement indices: Same as above
  • FY2021 achievement indices: Same as above
  • FY2022 achievement indices: The city will pay returns to the company in stages only if the company achieves 10% or more of the target patients who have succeeded in keeping their certification level of Needed Support Condition or Needed Long-Term Care (upper limit: 20% of the target patients).
Total budget of the project Approximately 13.600 million yen

Division in Charge

Healthcare Industries Division, Commerce and Information Policy Bureau