I intend to add to this list over time. If you know of other relevant work, please mention it in a comment. I also may create a tag for relevant posts.
The Health Impact Fund (cited above by MichaelA) is an implementation of a broader idea outlined by Dr. Aidan Hollis here: An Efficient Reward System for Pharmaceutical Innovation. Hollisâ paper, as I understand it, proposes reforming the patent system such that innovations would be rewarded by government payouts (based on impact metrics, e.g. QALYs) rather than monopoly profit/ârent. The Health Impact Fund, an NGO, is meant to work alongside patents (for now) and is intended to prove that the broader concept outlined in the paper can work.
A friend and I are working on further broadening this proposal outlined by Dr. Hollis. Essentially, I believe this type of innovation incentive could be applied to other areas with easily measurable impact (e.g. energy, clean protein and agricultural innovations via a âcarbon emissions savedâ metric).
Weâd love to collaborate with anyone else interested (feel free to message me).
Summary: The broad concept that Hollisâ paper proposes (âoutcome-based financingâ) has already been applied to several other areas such as reducing homelessness, improving specific health outcomes, etc. Recently, McKinsey, Meta, and a few others agreed to spend $925m to fund a similar mechanism to incentivize carbon capture technology innovation. Seems like thereâs lots of interest in expanding this type of financing model from big funders. Maybe something for the EA community to become more engaged with since there seems to be an appetite.
More details: As I understand it, Hollisâ paperâs proposal fits into a broader concept known as âoutcome-based financingâ. The space is much more developed than I had thought when I wrote this previous comment. Two primary outcome-based financing models existâpay-for-success (âPFSâ) contracts (also known as social impact bonds) and advanced market commitments (âAMCsâ). Hollisâ paper (from 2004) describes an application of PFS contracts. Both, PFS contracts and AMCs, are already applied to several industries including health and clean energy.
Definitions:
PFS rewards innovators based on some per unit metric (e.g., QALYs per drug sold in Hollisâ example).
AMCs reward innovators in a pre-specified lump-sum fashion (e.g., the WHO, World Bank, a few countries, and the Bill and Melinda Gates Foundation funded a $1.5 billion AMC for entities that could create a vaccine for pneumococcal diseases).
Real-world Examples:
PFS
Hereâs a link to Oxfordâs PFS database (~200 projects//â$500m since the concept was formalized in 2010). PFS contracts are used most commonly for reducing prison rates, improving health outcomes (in developed and developing countries), reducing homelessness, and upskilling labor. Check out the database for more details.
Hollisâ org is trying to set up a clean energy PFS fundâseems promising, but I think doing this in cleantech is an extra tricky.
Iâve been engaged with a group thatâs trying to get funding to do this for a specific pharmaceutical application (see Crowd Funded Cures).
Seems like thereâs a lot of momentum for outcome-based financing. Perhaps, the EA community should become more directly engaged in promoting this since it seems tractable.
Thank you!! Itâd be great if you want to write it as a top-level post, to get more visibility and to be more easily indexable, or maybe add something to this wiki page.
Crowd Funded Cures seems like an amazing initiative, wish you all the best!
Collection of sources relevant to impact certificates/âimpact purchases/âsimilar
Certificates of impactâPaul Christiano, 2014
The impact purchaseâPaul Christiano and Katja Grace, ~2015 (the whole site is relevant, not just the home page)
The Case for Impact Purchase | Part 1 - Linda Linsefors, 2020
Making Impact Purchases Viableâcasebash, 2020
Plan for Impact Certificate MVPâlifelonglearner, 2020
Impact Prizes as an alternative to Certificates of ImpactâOzzie Gooen, 2019
Altruistic equity allocationâPaul Christiano, 2019
Social impact bondâWikipedia (highlighted as relevant by Toby Ord)
Health Impact FundâWikipedia (highlighted as relevant by Toby Ord)
I intend to add to this list over time. If you know of other relevant work, please mention it in a comment. I also may create a tag for relevant posts.
The Health Impact Fund (cited above by MichaelA) is an implementation of a broader idea outlined by Dr. Aidan Hollis here: An Efficient Reward System for Pharmaceutical Innovation. Hollisâ paper, as I understand it, proposes reforming the patent system such that innovations would be rewarded by government payouts (based on impact metrics, e.g. QALYs) rather than monopoly profit/ârent. The Health Impact Fund, an NGO, is meant to work alongside patents (for now) and is intended to prove that the broader concept outlined in the paper can work.
A friend and I are working on further broadening this proposal outlined by Dr. Hollis. Essentially, I believe this type of innovation incentive could be applied to other areas with easily measurable impact (e.g. energy, clean protein and agricultural innovations via a âcarbon emissions savedâ metric).
Weâd love to collaborate with anyone else interested (feel free to message me).
Hey schethik, did you make progess with this?
@EdoArad
Summary: The broad concept that Hollisâ paper proposes (âoutcome-based financingâ) has already been applied to several other areas such as reducing homelessness, improving specific health outcomes, etc. Recently, McKinsey, Meta, and a few others agreed to spend $925m to fund a similar mechanism to incentivize carbon capture technology innovation. Seems like thereâs lots of interest in expanding this type of financing model from big funders. Maybe something for the EA community to become more engaged with since there seems to be an appetite.
More details: As I understand it, Hollisâ paperâs proposal fits into a broader concept known as âoutcome-based financingâ. The space is much more developed than I had thought when I wrote this previous comment. Two primary outcome-based financing models existâpay-for-success (âPFSâ) contracts (also known as social impact bonds) and advanced market commitments (âAMCsâ). Hollisâ paper (from 2004) describes an application of PFS contracts. Both, PFS contracts and AMCs, are already applied to several industries including health and clean energy.
Definitions:
PFS rewards innovators based on some per unit metric (e.g., QALYs per drug sold in Hollisâ example).
AMCs reward innovators in a pre-specified lump-sum fashion (e.g., the WHO, World Bank, a few countries, and the Bill and Melinda Gates Foundation funded a $1.5 billion AMC for entities that could create a vaccine for pneumococcal diseases).
Real-world Examples:
PFS
Hereâs a link to Oxfordâs PFS database (~200 projects//â$500m since the concept was formalized in 2010). PFS contracts are used most commonly for reducing prison rates, improving health outcomes (in developed and developing countries), reducing homelessness, and upskilling labor. Check out the database for more details.
Hollisâ org is trying to set up a clean energy PFS fundâseems promising, but I think doing this in cleantech is an extra tricky.
Iâve been engaged with a group thatâs trying to get funding to do this for a specific pharmaceutical application (see Crowd Funded Cures).
AMCs are less common. However, last week McKinsey, Stripe, Meta, and a few others decided to finance a $925m carbon capture utilization and sequestration AMC.
Seems like thereâs a lot of momentum for outcome-based financing. Perhaps, the EA community should become more directly engaged in promoting this since it seems tractable.
Thank you!! Itâd be great if you want to write it as a top-level post, to get more visibility and to be more easily indexable, or maybe add something to this wiki page.
Crowd Funded Cures seems like an amazing initiative, wish you all the best!