Okayama City has introduced a scheme linking healthy activity to improving people’s health, adopting the Social Impact Bonds (SIBs) concept originating in the UK.
As part of the ‘The Okayama Kenko Campaign’ project (Okayama Kenko Dai-sakusen), residents can gain points for activities related to healthy living and win special rewards such as gift certificates and goods from catalogues, in this project funded and organised with local businesses.
The project includes the largest scale business investment of JPY 370 million (£2.8 million) in Japan for this kind of initiative, by several local companies from a variety of sectors, despite often being competitors, who are investing in social projects around promoting citizens’ health.
Background
Okayama City has a high level of medical infrastructure such as the number of doctors and hospitals in comparison to other ordinance-designated cities in Japan. However, even though the average life expectancy is higher than the national average, the number years citizens are physically independently active (meaning not needing nursing care support on a daily basis) is below and medical expenses related to lifestyle-related diseases for those above 65 years old are also above the national average. As the issue of Japan’s ageing society continues to become more challenging, there are fears that the cost of social security will continue to increase, meaning it became necessary for Okayama City to take new measures.
A previous central government lead ‘Kenkou Point Project’ held in six cities nationwide in 2014, had the effect of increasing walking by participants to over 2000 steps a day, improving BMI by reducing the average per participant, keeping medical expenses at an average of JPY 40,000 (£302) per person over a two year period along with other benefits, on the back of which Okayama City decided to expand the scheme further with financing through SIBs.
Upon expansion, it was expected that using SIBs would result in a reduction of administrative costs, private funds would be used to tackle social issues, and the acquiring of evidence for health projects leading to the development of new healthcare services.
Okayama City Hall
Stakeholders
Okayama City established a programme which targeted citizens over 35 years old working or living in the city to participate in the project, with an objective of 15,000 participants, although individuals as well companies and groups can participate.
Participants earn points by recording exercise at fitness gyms and sports facilities, nutritional and dietary life (buying healthy lunches, eating at restaurants, getting nutritional guidance at pharmacies), social participation in sporting and health events as well as designated classes, attending health checkups, and recording steps taken on walks.
Depending on their league ranking, participants can receive benefits such as gift certificates by accumulating points. There are benefits for individuals as well as companies and groups, with fun activities and an element of gamification as regularly published ranking tables promote competition and increasing healthy activities for all taking part.
Managing the project
To launch the programme, local companies and citizens invested in the project and an initial JPY 30 million (£225, 000) was raised. The funds raised were distributed to service providers such as fitness clubs, supermarkets and pharmacies through funding by city authorities via an intermediary support agency. The service provider presented a range of options such as designated products and services (for example special ‘menus’ in restaurants) connected to health-related activities, which was paid for with the investment and participation fees from citizens. In the final year of the programme, 2022, Okayama City will pay a dividend through the intermediary agency to investors, depending on the success of the project.
The present and the future
Although the project is still in the middle of the initial three-year implementation period, 11,627 people have so far participated (as of the end of March 2020), and participants reported that they were encouraged by the benefits and were able to walk better than before, as well as being able to review their eating habits.
In addition, some local businesses are seeing good sales connected to the initiative, and are developing new products. At the beginning of the project, the number of stores taking part was about 80, but it has increased to about 140 (end of March 2020), and citizens are aware of health issues and healthy living styles are increasing.
There are some similarities in the social issues of Japan and the UK, such as increased medical costs and severe financial conditions for local authorities. While there are challenges for a city such as Okayama City, with a relatively large population, to realise a project which has an impact in reducing medical costs for the city as a whole, but the City continues to implement measures utilising the energy of private companies and citizens, with the goal of improving citizens’ health and reduce medical costs for individuals.
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Social impact bonds (SIBs) are a commissioning tool that can enable organisations to deliver outcomes contracts and make funding for services conditional on achieving results. Social investors pay for the project at the start and then receive payments based on the results achieved by the project. There now exist over 30 SIBs across the UK, supporting tens of thousands of beneficiaries in areas like youth unemployment, mental health and homelessness.
https://www.gov.uk/guidance/social-impact-bonds
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Located in the southern part of Okayama prefecture, which is east of Hiroshima prefecture, and is a government-designated city, it is a relatively large city in Japan.
Population: Approximately 710,000 (October 2019)
Area: 789.95㎢ (October 2019)
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Number of hospitals: 7.9 facilities per 100,000 population (4th place out of 20 government ordinated cities) (“2018 medical species facility survey”, Ministry of Health, Labor and Welfare)
Number of doctors: 434.5 per 100,000 population (2nd among 20 cities designated by Cabinet Order) (“2018 Doctor / Dentist / Pharmacist Survey”, Ministry of Health, Labor and Welfare)
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Healthy life expectancy: Male 71.6, female 74.3 (national average male 72.1, female 74.8)
(“2016 Basic Survey on National Life”)
