Aiming to save the state money while providing New Jersey communities with important public health care services, a bill sponsored by Assembly Democrats Bill Moen and Daniel Benson to establish a five-year social innovation loan pilot program was recently signed into law.
The New Jersey Social Innovation Act (formerly bill A-998/2349) will create this pilot program within the Economic Development Authority (EDA). Under the program, the EDA will guarantee loans on behalf of eligible organizations so that they can provide health care services that generate positive social outcomes and reduce overall public costs.
The EDA will only repay the loans in an amount equal to the money the government saves by having these private organizations supply public health services. As such, the government will only be responsible for repaying funding for demonstrably successful services that meet agreed upon objectives.
The law also establishes a study commission to assist the EDA in implementing the program. The commission will also assess both the impact of the pilot program and the feasibility of eventually expanding it statewide.
Upon the bill becoming law, Assemblymen Moen (D-Camden, Gloucester) and Benson (D-Mercer, Middlesex) issued the following joint statement:
“With the COVID-19 pandemic’s negative impact on our state’s revenue and the health of New Jersey residents, now is the time to establish a program like this.
“These public-private partnerships will require non-profits to acquire the upfront financing necessary to implement services that benefit public health. That means the government will only be responsible for repaying the loans these organizations receive if their services are verifiably successful in generating positive social outcomes and cost savings.
“As such, New Jersey won’t have to find the money to provide important public health-related services at a time when we need to promote good health and fiscal responsibility more than ever before. By partnering with non-profits through social impact bonds, we can benefit from their expertise and only pay for that which actually helps residents.
“This pilot program is our opportunity to help residents right now while seeing how beneficial a statewide program could be going forward, even once the pandemic has ended.”