As we move through the third year of the COVID-19 pandemic and increasingly come face to face with the health impacts of climate change, the need for more capital directed at improving health and well-being is apparent. Some of this capital will come from government and multilateral organizations, some from philanthropy—but this is not enough.

We believe that impact investors also have a big role to play. Healthcare is the second-largest sector of potential impact investments The Bridgespan Group has analyzed over the past several years, indicating the growing opportunity for investing in the sector.1 We would like to highlight three areas where the potential exists for impact-oriented investors to make a real difference. There are opportunities for both impact-first investors (who will accept below-market returns if there is strong impact potential) and those who are looking for both impact and market-rate returns.

Expanding Access to Care Globally

As if we needed reminding, COVID-19 has highlighted the global interconnectedness of health challenges and solutions. Nine months after researchers released the SARS-CoV-2 genetic sequence, there were 321 COVID-19 vaccine projects underway across six continents, with 33 in clinical trials enrolling participants in 34 countries. A little over a year later, researchers and doctors based in Botswana and South Africa made key contributions on sequencing and understanding the spread of the Omicron variant, which helped vaccine makers around the world develop new formulations.

Strengthening Mental Health and Wellness Supports

COVID-19 and its consequences—closed schools, widespread mortality, social isolation, disrupted work and personal lives—have only exacerbated the need for expanded access to high-quality mental health care. The prevalence of anxiety and depression went up 25% globally in the first year of the pandemic, according to the World Health Organization (WHO). The American Psychological Association (APA) notes that even before the pandemic, less than half of U.S. adults and children with mental health conditions were receiving treatment because of stigma, cost, lack of providers, or long waiting times. COVID-19 has brought more people to telehealth and other tech options for treatment. And these forces have met head-on with the ongoing shortage of mental health providers, creating what the APA calls a “perfect storm of funding opportunity.”

Supporting an Aging Population

According to the World Bank’s population projections, the number of people age 65 and over will increase by over one-third from 2020 to 2030 to reach 989 million people around the world. In the United States in 2030, 70 million people over 65 years old will represent 20% of the nation’s population.

One example of how impact investors are funding programs for this expanding population is InnovAge, whose US-based Program of All-inclusive Care for the Elderly (PACE) is an alternative to nursing facilities. Unlike many services for the elderly, which focus on more-affluent seniors, most PACE participants are eligible for both Medicare (age-qualified) and Medicaid (income-qualified) and can access the service at low or no cost. Through PACE, seniors receive customized healthcare and social support at a nearby center. Each PACE participant has a team of medical experts dedicated to providing personalized healthcare and support to help them age at home.

Read the full article about impact investing for health and wellbeing by Mariah Collins, Xueling Lee, Jenn Kozyra at The Bridgespan Group.