Thursday, 10 March 2016

Social enterprises in health: can you make profit for the greater well-being of all?

Posted by Peter van der Graaf, AskFuse Research Manager, Teesside University

Is it ok to make money in public health? This was one of the key questions that that came out of the Quarterly Research Meeting on social enterprise and health last month, which was jointly organised by Fuse and the Institute of Local Governance (ILG), in association with the North East Social Enterprise Network (NESEP). Social enterprises are often involved in pioneering and transformational work that may help reduce pressure on public health providers within local authorities. But are we taking enough notice of their potential and is there an evidence base for such interventions? The event aimed to explore this theme, highlight best practice and identify barriers and opportunities for future work and research in this area.

The key note speakers first engaged in a bit of myth-busting: a social enterprise is not a legal form and does not mean the same as not-for-profit. They are not replacing the NHS or public health, are not promoting budget cuts and are not a form of corporate social responsibility. So what are they then? Professor Cam Donaldson from Glasgow Caledonian University offered the following definition: “organisations that trade for the common good (e.g. addressing social vulnerability) and where the profits of that trade are used for social and community benefit”.

Making profit for a good cause sounds like a good idea, particularly for cash-strapped health and voluntary and community sectors, but the discussions at the event made clear that this comes with a number of strings attached, which can have far reaching and often unintended consequences for organisations. For instance, bidding for contracts can shift organisational focus from addressing local needs. Organisations also have to be size and investment ready, with plenty of larger competitors out there going for the same contracts. And this can be a big ask, particularly for small community organisations that have no interest in developing a business strategy.
There is also an ethical dimension to this decision: moving health provision from the public sector to social enterprises means one less link in democratic accountability. Who governs the governors of social enterprises? Cam Donaldson referred to this as “the shadow state”. Is the market also the right model for public health and wellbeing delivery or does it cause further distortion of social priorities? One participant put it as follows: “Although commissioners understand the importance of well-being, they are unlikely to pay for it unless you can demonstrate that it will save them money”. If everything is all of a sudden an asset, where does that leave an ideology of free access to health and social care for all?

In summary, social enterprises in health leave a lot of questions unanswered but can make quite a difference, be it for better or for worse. Unsurprisingly, there was an urgent plea from participants to academics to develop more research in this area. Studies looking at social enterprises in health are rare and particularly their impact on health and the wider determinants of health is unknown.

Interestingly, participants argued for a move away from “REF impact research” and government favoured approaches, such as Social Return On Investment (SROI) analysis. They argued that economic models were less suited for capturing the wider range of health and social outcomes that social enterprises aim to deliver. Outcomes of social enterprises are often produced in co-production between commissioners, providers and service users and, therefore, needed to be measured as such. Therefore, participants advocated a more anthropological approach to impact research for social enterprises that allowed researchers to leave outcomes and their measurement more open from the start of the research to accommodate new meaning of impact along the way.

Would that perhaps be the greatest asset of social enterprises in health: turning co-production of evidence into a profitable approach?

A summary report of this QRM can now be found here.

Picture attribution:, Tom Simpson, "I've always been able to turn mistakes into big profits!", 

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