If we are to achieve the Sustainable Development Goals by 2030, governments and businesses will need to develop long-term strategies that take the goals seriously as time-bound, quantitative objectives that will yield positive socio-economic returns.

On the basis of available needs assessments, the Sustainable Development Solutions Network estimated that low- and lower-middle-income countries may need to increase public and private expenditure by an accumulated $1-1.5 trillion in the next 15 years with health and health care.

“It is also critical that governments and donor agencies adopt more efficient use of blended finance instruments to offset risks and encourage private financing towards a shared agenda of increasing access to UHC.”

These estimates underscore the need to look for new business and financing models in order to deliver on the ambition of the SDGs, particularly when it comes to ensuring healthy lives and promoting well-being for all at all ages — or SDG 3.

This will require collective action to address three key challenges:

1. The disconnect between short-term investment strategies and long-term returns.

The 2013 Lancet Commission estimated that between 2000 and 2011, about 24 percent of the growth in full income in low-income and middle-income countries resulted from the value of additional life years gained from improved health. In South Asia for example, the annual value of the change in mortality was equivalent to 2.9 percent of the average income during the period 2000-2011, which was almost half the size of the value of the increase in gross domestic produce.

Health and health care as a system has been effective in demonstrating the feasibility and effectiveness of specific interventions in reducing preventable causes of death and increasing life expectancy. However, we have seen less success when it comes to articulating the long-term returns of investing into populations’ health. Or in cases where this return was proven, such demonstrations failed to clarify how to translate the societal macro-level benefits into individualized return on investments to stakeholders contributing with point solutions to a redefined end-to-end ecosystem.

Understanding what businesses, governments and societies at large have to gain — collectively and individually — from investing in health, requires an approach that assesses full societal costs and full societal benefits of healthy populations, as well as an approach to share such benefits. Learning from other industries may be part of the answer.

In the field of infrastructure, or as energy networks get deployed as justified by long-term energy savings, this is not uncommon. For the businesses that have invested in basic infrastructure such as electric grids, schemes have been set up to reward them with a share of such savings, as long as grid utilization risks and unit pricing is well articulated upfront, and the allocation of such risks between public and private sectors is also clear.

Such a clear allocation of risks and benefits in the context of long-term partnerships has been limited with the health care industry. When not all parties see their full range of benefits clearly in a short time frame, and only have insight into what a particular intervention will cost them, there is potential for a disconnect that can deter investment. Thus, identifying externalities and mechanisms to align investors and beneficiaries will not only invite investment in the health care ecosystem, but will also help highlight the paths through which each stakeholder can yield direct and indirect returns within specific time frames. Increasing the sophistication of the measurement of returns on investment in health care, and finding risk allocation models that are reasonable and practical, will be critical to raise investment and implement sustainable business models to deliver healthier populations.

2. Reduced use of innovative financing tools to deliver on positive population health outcomes.

Another way to appreciate the solutions to bridging short-term investments and long-term return may from time to time involve other actors that will provide for financing solutions at a cost in exchange for derisking the joint public-private investment. When the cost for accepting the risk is minimal or nil, we talk about social financing mechanisms; when such cost is market standard in terms of the expected return, we typically see venture capitalists and private equity firms as potential interested parties.

In the second category, venture capitalists are starting to move toward health care in fast growing economies and more examples of such do exist, as is the case of The Abraaj Group heavily investing in health care infrastructure in Asia and Africa.

Another example is the Investment Fund for Health in Africa which aims to contribute to building sustainable health care in Africa. IFHA predominantly focuses on companies active in the following sectors: Care provisioning, health insurance, health care products manufacturing, wholesale, and distribution of health care products. It operates as a private equity fund with technical assistance provided by the African Development Bank. One example of its investments is the $68 million invested by IFHA in Nigeria’s leading private health care company, Hygeia Nigeria Ltd. Through this project, Hygeia will have the capacity to reach more than 2 million patients over the seven-year investment period.

The leading financing institutions in health, including The Global Fund to Fight AIDS, Tuberculosis and Malaria, Gavi, the Vaccine Alliance, and the Global Finance Facility have different financing models and tools that can showcase investments in health and identify lessons learned in mobilizing vast increases in domestic and international resources for the sector. But ultimately for SDG 3 we need to push for a health care financial system oriented towards sustainable investment for longer-term capital returns.

3. Need for a predictable government policy framework in order to attract commercial investment.

The Business and Sustainable Development Commission analyzed the size of the market opportunity in four economic systems: Food and agriculture, cities, energy and materials, and health and well-being. This work concluded that achieving the SDGs will open up $12 trillion of market opportunities in these systems, which together represent around 60 percent of the real economy and are critical to delivering all SDGs. To capture these opportunities in full, businesses need to accept a certain degree of risk and that the burn rate of investment in early years is going to create formidable returns in the long run. However, no business management team will ultimately be ready to assume risks that are either uncapped, or not quantifiable at the onset of an investment project.

Even more than above market returns, corporate decision makers do require a higher degree of predictability as they evaluate investment opportunities, and the moment health care will not deliver on such a basic requirement it will always show at the bottom of the list when compared to investments in infrastructure, energy, communication, and supply chain to name just a few. Hopefully, governmental policies can be shaped to offer predictability and stability in establishing health for all as a long-term priority.

A stable framework for health systems strengthening can be provided, and offer the ground for predictability which will in turn encourage investment, but only when certain requirements are met:

• Health care agenda translates universal health coverage into practice.
• Deadlines are set to invest in the implementation and deliver compliance with International Health Regulations.
• Investments are made in the education of doctors and nurses and the vaccination of children.
• A clear priority is given to accelerate access to primary care.
• The rules of the game are clear when it comes to the protection of intellectual property.
• The competition and tender practices and the pricing levels are set for the long term.

It is also critical that governments and donor agencies adopt more efficient use of blended finance instruments to offset risks and encourage private financing towards a shared agenda of increasing access to UHC.

If, collectively, we are able to leverage innovative financing tools and deploy transparent and predictable health care policy setting, we will foster a shift from short-term investment opportunities to those with longer term returns in health care. Ultimately, this will deliver positive economic returns, but most importantly it will accelerate the achievement of the health targets across the SDGs.