OK, real talk. I have taken a bit of heat over the years for trying to make a business case for empathy. When some folks saw my TEDx talk about how to trick leaders into being empathetic by showing them the benefits to the bottom line, they bristled. “How can you convince people to embrace empathy for selfish reasons?! That’s not compassionate at all,’ they said. My perspective has been and will always be that to persuade people to take action, you need to make a case for what’s in it for them to change. It’s basic human nature. And if it gets them there, they can be transformed from the outside in – and we all benefit.
That’s exactly what Andrea Feigl is trying to do. She is making the business case for the private sector to partner with public entities and invest in healthcare. When they do, they cut costs, improve performance – and grow the economy. Andrea calls this a blended finance model and it’s working.
Today, we discuss what blended finance is, what role empathy plays in health impact measurement, and why financing healthcare matters in the impact and finance spaces. We talk about how to measure the impact of healthcare access on companies and the economy, and essentially, how to make the investment case for health, as evidenced recently in blended finance partnerships helping to find and distribute vaccines for COVID.
To access this episode transcript, please scroll down below.
Key Takeaways:
- Blended finance means that you leverage public or philanthropic resources to de-risk investments in healthcare by the private sector. It allows for proper investment and accelerated spending and production of whatever you are trying to produce.
- While many recognize health as a right (not as a privilege), in the private sector, this is not always the belief and it needs to be communicated in language that aligns with the values of the company or investors can understand and relate to.
- Putting a $1 value on a health state is not an exact science like measuring a cubic meter of carbon emission. It’s informed by our value system. And because it’s informed by our value systems, reasonable people will disagree on what that value should be.
“We see that there is value in caring – not just caring about health for health sake, even though that is important – there’s value for the economy in caring and investing in health appropriately.”
— Andrea Feigl
About Andrea Feigl, CEO, Health Finance Institute
Andrea Feigl, Ph.D. MPH, envisions a world with less suffering from preventable diseases, where every person can live their life with full dignity and reach their fullest potential.
Andrea is the founder & CEO of Health Finance Institute and an adjunct professor at Georgetown University who brings passion and ambition to her work in global health policy, financing, and governance. Outside of her work in healthcare, Andrea is trained as a ballet dancer and holds an international teaching certificate in classical ballet.
Andrea writes and speaks publicly in order to close the knowledge and implementation gap when it comes to global healthcare, especially related to non communicable diseases. She has published reports and papers for Health Policy, the WHO Bulletin, the CUGH Global Health Project of the Year, the Center for Global Development, and WEF/Harvard. Andrea is recognized as the innovator of the Evidenced Formal Coverage Index metric for universal healthcare coverage.
A native of Austria, Andrea received her Ph.D. in global health from Harvard University, her MPH and BSc (First Class Honors) with a full scholarship from Simon Fraser University in Canada, and her IB from Red Cross Nordic United World College in Norway.
When she is not speaking, dancing, or traveling, Andrea enjoys playing the piano, skiing, and spending time with her son at their home in Washington, D.C.
Connect with Andrea Feigl:
Health Finance Institute: https://healthfinanceinstitute.org
Twitter: https://twitter.com/dr_feigl
LinkedIn: https://linkedin.com/in/andreafeigl1
The Health Impact Credit Podcast: https://open.spotify.com/episode/69apWnX6QlVOC9zqmGYAFq
An article on Blended Finance
The CGD event on assistive technologies: https://www.youtube.com/watch?v=JQ71XTY7A6I
Last year Skoll Open Forum – recording on solidarity: https://vimeo.com/700668875
Don’t forget to download your free guide! Discover The 5 Business Benefits of Empathy: http://red-slice.com/business-benefits-empathy
Connect with Maria:
Get the podcast and book: TheEmpathyEdge.com
Learn more about Maria and her work: Red-Slice.com
Hire Maria to speak at your next event: Red-Slice.com/Speaker-Maria-Ross
Take my LinkedIn Learning Course! Leading with Empathy
LinkedIn: Maria Ross
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FULL TRANSCRIPT BELOW:
Welcome to the empathy edge podcast the show that proves why cash flow, creativity and compassion are not mutually exclusive. I’m your host Maria Ross. I’m a speaker, author, mom, facilitator and empathy advocate. And here you’ll meet trailblazing leaders and executives, authors and experts who embrace empathy to achieve radical success. We discuss all facets of empathy from trends and research to the future of work, to how to heal societal divisions and collaborate more effectively. Our goal is to redefine success and prove that empathy isn’t just good for society, it’s great for business. Okay, real talk, I have taken a bit of heat over the years for trying to make a business case for empathy. When some folks saw my TEDx talk about how to trick leaders into being empathetic, by showing them the benefits to the bottom line, they bristled, how can you convince people to embrace empathy for selfish reasons, that’s not compassionate at all. They said, my perspective has been and will always be that to persuade people to take action, you need to make a case for what’s in it for them to change. Its basic human nature. And if it gets them there, then they can be transformed from the outside in. And we all benefit. That’s exactly what Andrea feigley CEO of health Finance Institute and health economist is trying to do. As the founder and CEO, and an adjunct professor at Georgetown University. She brings passion and ambition to her work in global health policy, financing and governance. She’s making the business case for the private sector to partner with public entities and invest in health care. When they do they cut costs, improve performance, and grow the economy. Andrea calls this a blended finance model and it’s working. She envisions a world with less suffering from preventable diseases, where every person can live their life with full dignity and reach their fullest potential. Andrea writes and speaks publicly in order to close the knowledge and implementation gap when it comes to global health care, especially related to non communicable diseases. She has published reports and papers for many prestigious publications, you can check them all out in her full bio in the show notes. Today, we discuss what blended finance is what role empathy plays in health impact measurement, and why financing health care matters in the impact and finance spaces. We talk about how to measure the impact of health care, access to companies and the economy, and essentially how to make the investment case for health, as evidenced recently in blended finance partnerships, helping to find and distribute vaccines for COVID. This is such a delightful episode, take a listen. Welcome, Andrea to the empathy edge Podcast. I’m so excited to have you here to talk about your work about around global health policy, and especially the role empathy plays in that because I love when empathy plays a role in things that people don’t think it does. So welcome to the show.
Andrea Feigl 03:57
Thank you, Maria, so much. Thank you so much for having me. I’m really excited to be on your show. And yes, I think I mean, healthcare and empathy go really well together. But when it comes to financing healthcare, we sometimes forget about that. So I’m very excited to be able to discuss this a little bit further with you today.
Maria Ross 04:15
Well, let’s jump right in. You talk about this idea of blended finance, in your work. What can we define that for people?
Andrea Feigl 04:23
Absolutely. And I’m glad you asked this question. So blended finance basically means that you leverage public or philanthropic resources to de risk investments in healthcare from by the private sector. So basically, the private sector looks at risk and return equation before they say we want to invest in market access. We want to invest as clinics or something like that. But blended finance basically creates creates a space where you can attract private capital, but it’s kind of catalyzed by philanthropic spending or Public spending as well. And they give you one example. Kovacs, and your viewers. Your listeners may have heard of it, which was basically an advanced market commitment. It for COVID vaccines in developing countries is an example of blended finance. So the governments of rich countries said we’re going to commit to spending X amount of money for X amount of vaccines. But then the private sector knew that the high income country governments were good for their money, and they were able to purchase bonds and accelerate the spending, and accelerate the vaccines and access and production by investing in these bonds. So that’s one example of blended finance. But had the public sector not put that money down, or the commitment of that money down, the private sector wouldn’t have stepped in? Well, I think that
Maria Ross 05:53
that’s so important, because when we look at things like health investments, or even financing health care, some people and I would say that it actually, you know, especially in the US here, it depends on your political party. But it’s often seen as something that the public sector should do. So why does Why should health matter? In the in the finance space, or the impact space, I know, you have a definite viewpoint, and a definite link that you have around health and how it impacts all these other things.
Andrea Feigl 06:24
I think you’re getting right to the heart of the matter with your question here. So for us that work in healthcare, we often do so because we’re compassionate, right? And there’s something I’ve read up a little bit on empathy, there’s something about something called compassionate empathy, where it’s not just feeling for somebody, but you are compelled to act, right. So I think for us in public health, we see a health burden, we see unnecessary suffering, and we want to say we want to do something about that. Now, so and recognizing this right to health is, you know, an empathy informed practice. However, we need to if we want to get the private sector on board, or, you know, those who have the capacity to spend on health on board, we need to translate that kind of language into language where their values align with it as well, because not everybody feels the same way, about the right to health that we in healthcare do. So what unhealthy economics does is basically saying, we are offering a conversion between the languages of health to the languages of money or finance, right? We’re saying we can create this much health without much money. If we create this much health, then this will benefit the economy. So some something others value or think about or care about. So health economics is that language, and that that creates understanding that doesn’t necessarily create action yet. Right? Okay. So that means by investing in health, you create that much financial value, okay, some other things create value as well. So why should we invest in that, and then I think you need to go one step further and say, well, it actually benefits you and everyone around you as well. So and then those with, you can align those with potentially, initially different value sets and different things they care about, on that same focus of why investing in health is really important, whether you see from a private or public perspective. So again, we’ll give you examples of numbers in the US, the under investment in preventative care and access to care around chronic diseases, actually manifests into in a 9% tax burden on an annual basis is literally like taxing our entire society, but 9% Because we don’t spend well. And, you know, that’s that is a lot. So, to help us become just an empathy issue anymore, like people can go, you know, you want to care about ours, and that’s great, but I care about my bottom line. And our stance is, well, you know, you care about the bottom line or caring about their bottom line actually can make people healthier as well, because investments in health have a high ROI, high positive ROI. And investments in health also benefit the economy beyond just the healthcare sector, which we see time and again. And I think we then we therefore need to move from that common understanding to actually getting people to act. So really, I guess, cracked and out on what compassionate and empathy and action oriented oriented Ness means or how this could be unlocked in health investing space. So so what we do at the Health Finance Institute is a lot about we focus a lot on translating that evidence, because we see that there is value and caring Not just caring about health for health sake, even though that is important, there’s value for the economy, but in caring and investing in, in health appropriately. So, yeah,
Maria Ross 10:13
yeah, no. And I, I love that approach, because that’s exactly the approach I took with my book. And my work is that, you know, unfortunately, the moral argument is not always enough to move people to action. So if we can make a business case, because it is good, and on all these other areas, it does provide benefits across all these other vectors. Why not? Why not meet people where they are and talk about the values they hold dear. It’s not about necessarily converting people into thinking the way we do or seeing the world the way we do, we’re really just trying to persuade them into action, for the benefit of the good we’re trying to create. And some people have a problem with that approach. I know, I have heard, I’ve taken the heat for, you know, trying to Trojan horse leaders into accepting empathy by talking about the bottom line. But if that’s what it takes to get them to change their point of view, and be willing to see someone else’s perspective, that’s actually going to transform them from the outside in any way. So whatever it takes to sort of get them there. I think that’s a good thing. And I love what you’re doing in terms of making health a matter of, of economic importance. And in the end, everybody wins. Because, you know, we become healthier, we get people the care they need, which again, creates a thriving country, it creates a thriving economy when everyone is in good health. So I want to talk a little bit about some of the systematic ways that the true value of health can be reflected in measurement. So when you’re trying to make this business case, or make this argument, what are some of the measurements you’re looking at? And how are you quantifying them?
Andrea Feigl 12:05
Yes, they are an amazing question. And it’s unhealthy code. As a health economist, I love talking about the codification of health and in economic terms. So traditionally, what we’ve done in health economics, we are basically looking at what how do certain investments in health care, it result in specific health outcomes? And how can we value these health outcomes in financial terms? So and then these there’s different ways of arriving at this number, but very, like, very in a very simple format, think about it as direct cost rate, like how much are you spending to get to that better health state? versus how much does the treatment of the associated health impacts costs? Right? Do we prevent tertiary care? Do we prevent hospital visits if we invest there? So a lot of it is like, how much are we actually saving, or spending less if we invest upfront in certain health care, interventions, and that’s the direct cost analysis. But that often has a very specific either pay or government angle, and doesn’t really get the societal societal impacts as well, which are also quite large. The second thing is that we measure our productivity of the workforce and early retirement due to ill health, absenteeism, presenteeism, and those types of societal impact, taking time off work, because, you know, you have to take care of a sick dependent, and so on. And these can also be summed up and integrated. But again, the perspective is still very focused on those who are directly impacted by their health, better health care, and those who pay for health care, such as insurance, the government insurance, and then those those in a family. Now, from an finance perspective, we are trying and working on expanding that and trying to capture the health impact that the private sector or companies have in a good or bad way as well. So on an analogy, there is sort of like the, you know, the carbon credit market or the carbon market where you’re saying, basically, well, if companies are producing great products, but they’re actually harming the environment as they go along and doing as they go along. And as they produce their products, or bring their products to market, then we need to find a way to integrate those costs into the cost of the products because someone is actually paying for it. And those who are causing that harm, aren’t paying for it. And in healthcare and health, we’re just starting to think about it that way. So we have started, for example, to introduce health specific taxes, so sugar, sweetened beverage taxes, cigarette taxes and others and they have been quite effective at Reducing this type of harmful behavior and effective at increasing public health budgets. But I think we can go a step further by basically saying, let’s look at the larger impact the larger footprint, certain companies have, you know, whether it be producing vaccines really quickly through to modern technologies, which has a great impact, or, you know, producing healthier food or moving from meat based to plant based products. And conversely, by peddling, you know, sugar sweetened beverage to low income communities, which will be a negative health impact, because somebody’s actually paying for these impacts. And we’re not integrating it. And so the thesis is, if we integrated these types of metrics, and showed that those who perform better in creating better those who create better health also have better, better ROI, better rates of returns. And as compared to those who do not perform well, in terms of the health impact, then it becomes much easier to say, please invest in health related impact investment vehicles or things like that. And what what kinds of
Maria Ross 16:11
things are you looking at in terms of the policies you’re asking companies or private partners to invest in? Can you give us some examples? You mentioned the Kovax, consortium initiative? And how that came together? What are some others that people may not know about?
Andrea Feigl 16:30
Yeah, I mean, I think that so there’s, there’s two approaches. One is that a lot of companies are already asked to report on their performance against certain ESG. Right now rather loose indicator framework. So it’s environment, social, and governance indicators. And the social doesn’t have specific health metrics associated with it. So companies actually are in the space where they want to quantify what their health impact is, because if they can do so they can improve and be they can also prove to their investors that they’re doing well in this space. And they are very much aligned in terms of their incentives. And because it’s becoming more of a thing right now. And even executive compensation is directly aligned with it. So it’s not even us asking companies to do things certain ways. We’re just asking companies to actually produce better metrics, and think about in a standardized fashion for agents to do things they already asked to do, and incentivize to do, but with better clarity and with better knowledge, they can make better decisions. So that’s, that’s one thing. I think in terms of the Kovacs example, that blended finance example. It’s in health, the blended finance in various different sectors has been quite common, like public private partnerships, to build bridges, to build hospitals, to even municipal bonds can be examples of public private partnerships, that, you know, build your schools and your playgrounds and everything else. And the question then is, is there a case to be made, or an avenue to invest in a similar fashion in under finance, vulnerable settings in emerging markets, especially like an African continent where healthcare spending is still quite low when you look at public spending, and universal health care isn’t reachable by 2040. And there, it gets a little bit trickier because you need certain conditions, such as visibility funding, first loss capitals, or capital, that is basically put on a table by donors that they are willing to walk away from, if they’re not, if there aren’t any returns, plus very good value propositions through good data and indicator frameworks, so that the private sector feels comfortable that they are willing to put their money at risk in these spaces. And there we only see, so the entire field of blended finance, we only see about 8% of blended finance deals in the healthcare sector. But it should be at least in the, you know, mid double, you know, 15% or 20%, in terms of the size of the market that health occupies versus the blended finance space. And there, it’s much harder to say what they should invest in, because they’re the thing, what do they care about? Because it does this? Do these investments relate to these companies, initiatives? They’re their core business, they’re where they want to expand? What are the other opportunities in going into this planet finance deals versus these other deals. And I think this is actually much more complicated at the project and disease specific level than it is at the corporate level, where you can actually try and integrate these, these metrics that companies already have to perform against anyways, so I hope I answered your question there but feel free to I think So my follow up questions. Yeah, I
Maria Ross 20:01
think we’re looking for just maybe some examples of where this is actually working well, this other than you know is are there other examples other than Kovacs, where this blended finance model is working?
Andrea Feigl 20:12
Yeah, so there is one example. And I just thought that I went over it with my students last week in Georgetown. So and so I an example, like the references is something called the medical credit fund. And it was basically set up as a structure to provide small loans to small and medium enterprises, and the African continent that word credit worthy in the current market conditions. So there was a lot of concessional so again, capital that was given in grant form or as a first loss format by donors such as skates, just as you as the ID of others, to basically set up this medical credit fund, that also helped give technical assistance to get the term sheets of the small businesses ready to accept the loans and pay them back. So they basically so that then was a de risking have to unlock capital from that providers to then channeled through small medium enterprises. And they had really great success that they were able to reach over 95% repayment rates of the loan. So 95% of the businesses who got loans did not default, they actually were able to pay it back. They made the debt providers money through the lending business. And because it was working well, and the technical assistance transferred knowledge more locally. Over time, that concessional capital, so the grant funding portion actually decreased. So sort of success for story here is really twofold. It’s because you actually there was technical systems, you could unlock cash, there wasn’t a capital, that wouldn’t have been unlocked. But his businesses, the businesses grew, people made money, people got access to health care, and a reduced reliance on donor funding or in the long run. So I think that’s a great example. But again, you need to think very creatively about and you needed that concessional capital to basically prime the pump.
Maria Ross 22:21
No, do you ever get any pushback on you know, we talked about this at the top of the interview on trying to put $1 amount to health care to quantify it to, again, you and I are speaking the same language where we understand that you in order to persuade anybody to do anything, you need to speak to what they actually want, what they need. And but do you ever get any pushback on Oh, health care should be the sacred thing? This is all about humanity and compassion, and we shouldn’t have to make a business case for it. What’s your what’s your response to that?
Andrea Feigl 22:59
I mean, we get that quite a bit. And I think that field in general of health economics has gotten that in the past. And there’s, you know, putting $1 value on a health state is not an exact science, right? It’s not like measuring a cubic meter of carbon emission. It’s not like determining another, like, you know, and that a decimal of the gravitational constant, it’s really, it’s informed by our value system. And because it’s informed by our value systems, reasonable people will disagree on what that value should be. Others also say, well, health is invaluable. Therefore, we should always, you know, save a life and so on and so forth. However, when you try to create a budget for healthcare, we’re when policymakers are faced with constraints. So we have to deal with these constraints. And if we don’t deal with these constraints in a meaningful manner, then you end up in a not even at best scenario, second best scenario. And then a third best scenario, where you’re making decisions without actually being informed about it, being reasonable about it or applying evidence, right. So how economics is a tool to make you better help you make better decisions. And they’re wonderful frameworks out there right now, that combine the ethics of giving access to those who are worst off, because it’s always more expensive to favoring the weakest in society to taking a life course approach, saying all people across the Life Care spectrum should have the same access to health care, but that access may differ whether you’re a nine, eight, versus whether you’re two years old. And that’s either right or wrong, but it’s just another way to think about it. So there are thankfully these decision decision making frameworks that then we defer to integrate in the policies that we support. And then we also get pushed back and say, Well, you know, there shouldn’t be co pays and there shouldn’t be this shouldn’t be that. In an ideal case scenario, sure. We all want that to be accessible and free. But the reality is, that by 24, De, even in the best economic scenarios, less than 40% of least least developed countries are going to have universal health care, or even close to 5% of the government’s GDP spent on how now if we can improve that number through, quote unquote, second best solutions, then I think we have to try that. Because you’re basically leaving not just money, you leaving health on the table. And so that’s sort of the the approach and the viewpoints that we hold, and that we I think we’re quite quite comfortable with but you know, not everyone will disagree. Not everybody.
Maria Ross 25:40
Yeah, no, I applaud it. Because, I mean, it’s one thing to be sort of self righteous, and try to take the moral ground all the time about what people you know, what people or companies or governments should do. But that’s just beating our heads against a wall. And it’s not helping solve the problem. So you know, especially like, the similar approach I’ve taken with trying to get companies and leaders to embrace empathy is, it already does provide all these benefits, these economic benefits, these growth benefits, these engagement benefits, and so why not talk about that, if that’s what’s going to move people into action. So I completely applaud your approach. And I love that you are creating a framework where, where companies can understand that this kind of blended finance model benefits them just as much as the benefits of government just as much as it benefits all of us who, who get the benefit of a healthy life. Right. So I love the work you’re doing. And I wish you continued success with it. So we’re gonna have all your links in the show notes, of course, Andrea, but for folks on the go, where can they find out more about how finance Institute’s work and possibly connect with you?
Andrea Feigl 26:58
Thank you so much. Yes, so we have a website on health, finance institute.org, you can sign up for our newsletter there, we have, I think a great newsletter coming out on a monthly basis, we would love to have you read it, join us support us, then we are quite active on LinkedIn through my own LinkedIn account. It’s LinkedIn. For it’s gonna be in the show notes. file. So follow me on comment on my posts, engage. I look forward to your comments, debates and so on.
Maria Ross 27:31
And if there’s so a leader of a company listening right now, no matter what size they are, is there a way they can get involved in your efforts at the institute?
Andrea Feigl 27:41
Absolutely. So we work actually with quite a few companies. And we’re developing a framework and are seeking company partners to look at what their health impact is like what would be their health impact scores around along the verticals and horizontals that they’re working on, and ease of performance against that actually benefiting their bottom line. So you’re working with a couple of really forward thinking great leading companies on this, but I would love to grow and expand our portfolio.
Maria Ross 28:10
I love it. Thank you so much, Andrea, for your insights. And again, for the great work that you’re doing. We really appreciate having you here.
Andrea Feigl 28:17
Thank you, Maria, thank you for your work and your leadership.
Maria Ross 28:21
And thank you everyone for listening to another great episode of the empathy edge podcast. If you liked what you heard you know what to do. Please share the show with a friend or colleague and don’t forget to leave a rating or review. We love that. And until next time, please remember that cashflow, creativity and compassion are not mutually exclusive. Take care and be kind.
Maria Ross 28:50
For more on how to achieve radical success through empathy, visit the empathy edge.com. There you can listen to past episodes, access shownotes and free resources. Book me for a Keynote or workshop and sign up for our email list to get new episodes insights, news and events. Please follow me on Instagram at Red slice Maria. Never forget empathy is your superpower. Use it to make your work and the world a better place.
