Public Health Bonds: A New Way to Fund a Healthier Future for America

America’s public health system is being eroded. Proposed federal cuts would slash core programs by half, even as communities face rising infectious disease outbreaks, worsening chronic disease, and shrinking access to basic prevention. Faced with this widening gap, we have a choice: accept declining health as inevitable or build new, locally driven ways to sustain the prevention infrastructure that keeps people safe. One promising model is taking shape: the public health bond.

What are Public Health Bonds?

This shared financing model allows organizations to pool resources, reduce risk, and partner across sectors to invest in prevention. Collaboration across health plans, public health agencies, and hospitals may not be the norm, but mutually beneficial investments can help knit the work of these organizations together. In simple terms, it’s a way for health-related organizations to all chip in to fix the roof before it leaks: investing a little now to avoid bigger harms and higher costs later. Of course, public health bonds aren’t a substitute for restoring core government funding, but communities need practical tools to prevent further erosion while long-term policy debates play out.

How Do They Work in Practice?

Public health bonds are not debt instruments in the traditional sense, rather they function as shared-risk agreements. Once a payer organization or hospital system recognizes the value of a particular health intervention – for example, home visits for low-income mothers, smoking cessation services, or mobile clinics and outreach services in rural communities – they invest accordingly. Importantly, a critical mass of health care organizations in each community would be needed to mitigate issues related to churn of patients across systems or plans.

A philanthropic partner with shared interest in the issue or in a particular area would provide seed funding to catalyze support for the initiative and potentially could serve as a local or regional convener. Public health partners serving that area are then responsible for delivering those interventions and generating measurable outcomes.

Unlike social impact bonds, these arrangements involve no outside investors expecting financial returns; instead, they are shared-risk, shared-savings commitments among organizations already responsible for community health.

If the given intervention returns positive outcomes, such as reducing unnecessary hospitalizations or preventing expensive complications, the resulting savings can be partially redirected back to the public health agency, creating a virtuous cycle of reinvestment and maintaining funding for important services. If the outcomes fall short and cost savings do not materialize, the three partners work together to return to the drawing board and reimagine the intervention. All are accountable not only to one another, but ultimately to the communities they serve. 

Shared Financing in Action

This kind of partnership is novel, but not unprecedented. During the COVID-19 pandemic in 2021, New York City’s health department collaborated with seven health insurance plans to create a vaccine outreach program. With upfront city funding and in-kind support from health insurers, health care providers were reimbursed for proactive outreach counseling calls to unvaccinated patients. The program was operationalized in only six weeks and nearly one million residents were identified for outreach. The initiative demonstrates how cross-sector collaboration between public health organizations and payers can quickly close critical, mutually concerning gaps in care. The broader vaccination campaign in NYC generated net savings overall, with every $1 invested yielding more than $10 in cost savings — demonstrating how shared financing strategies paired with coordinated outreach can produce both health and economic returns.

Taking the First Steps

To maximize their impact, efforts to implement public health bonds should be targeted in key areas of disinvestment, like HIV prevention services, which are facing cuts across the country. Since 2018, a 12% drop in new HIV infections has saved the U.S. more than $5.1 billion, but even a modest decrease in prevention services could reverse all of the progress made in reducing HIV transmission within the last decade. State health departments could partner with a state-based insurer and a local philanthropic organization to pool resources to fund local HIV prevention programs in their jurisdiction. 

Another potential use is in funding Community Health Workers (CHWs). During the pandemic, substantial investments expanded the reach and impact of CHWs, who played critical roles in connecting individuals with testing, vaccines, and health care. However, many of these positions were funded through temporary grants now being eliminated. Public health bonds could provide a more stable, long-term financing mechanism for this work.

Finally, immunization information systems also face growing threats as funding declines. These databases are essential to tracking vaccine uptake, monitoring gaps in coverage, and coordinating with health care providers. Without sustained support, these programs are being dismantled in some states, undermining the infrastructure needed for both routine immunizations and emergency responses.

The Path Forward

Public health bonds aren’t a panacea, but they can turn competition into collaboration and scarcity into shared investment. Just as communities issue municipal bonds to fix bridges or shore up levees before the next storm, public health bonds allow us to strengthen key prevention systems that protect our nation’s health. They’re investments in the vital infrastructure that allows each of us to enjoy more healthy birthdays with our families and friends. The future of public health depends on how we navigate these trying times. While we can’t use philanthropy to dig our way out of this crisis, catalytic capital can help us innovate our way through it, together.

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