TRENTON – Legislation sponsored by Senators M. Teresa Ruiz and Donald Norcross to create a new method of generating capital for programs designed to improve the quality of life for residents, particularly in the area of health care, and to reduce costs related to health care delivery was approved today by the Senate Budget and Appropriations Committee.
“We know that early intervention is absolutely essential to meeting the critical health care needs of our residents. However, far too often we are seeing individuals forego preventive care and turn to emergency rooms first for their health care needs,” said Senator Ruiz (D-Essex). “This is an opportunity to improve the healthcare delivery system in our communities through a program that encourages organizations to implement new and innovative strategies that will focus on preventive care and early intervention. This is about really thinking outside of the box about how health care services are delivered and through that process determining how the system can be improved to better protect the health of residents but also to lower program costs.”
The “New Jersey Social Innovation Act” seeks to attract private funding for programs aimed at reducing the public cost of providing health care services to residents. The bill (S-2710) would establish a five-year pilot program aimed at encouraging private investment in preventive and early intervention health care and reducing public expenditures related to those services. The Economic Development Authority (EDA) will administer the program and oversee a study commission established by the bill.
Under the bill, the New Jersey Economic Development Authority (authority) will establish a social innovation loan pilot program to guarantee loan agreements among lenders, eligible non-profit organizations, and public sector entities. The study commission will aid the EDA by determining a non-profit to receive the investment funds from private investors, and issuing annual reports detailing the progress of the program. The bill also seeks philanthropic donations to provide the loan guarantee for lenders.
“We have seen non-governmental entities make real strides in the area of healthcare through the creation of programs aimed at improving health outcomes for residents in our urban areas while also reducing costs,” said Senator Norcross (D-Camden/Gloucester). “By incentivizing private investment in more of these kinds of programs, we will spur innovation that we hope will lead to a variety of methods of improving the healthcare delivery system that can be replicated across the state.”
Similar programs have been introduced to address prison populations in New York and in England, as well as homelessness in Massachusetts. New Jersey is the first state seeking to utilize social financing to address issues in the healthcare system.
The bill was approved by a vote of 13-0. It now heads to the full Senate for consideration.