The community development and health sectors can and should work together to reduce health disparities and improve everyone’s health.
By David Erickson and Nancy O. Andrews Posted on July 22, 2012
Safe, vibrant neighborhoods are vital to health—far more so than medical care is, in fact. In a path-breaking study of death certificates published in Health Affairs in 2002, researchers found that medical care only contributed to 10 percent of premature deaths. Genetic predisposition accounted for 30 percent. But 60 percent were explained by social circumstances, environmental conditions, and behavioral patterns. As Robert Wood Johnson Foundation president Risa Lavizzo-Mourey often says, when it comes to your health, “your zip code is more important than your genetic code.”
The Role of Community Development
The solutions to health disparities “really lie within the domain of community development,” argues David Williams, a Robert Wood Johnson senior fellow. And yet, despite the place-based nature of health, it often goes unrecognized how much community development has contributed to better health outcomes for low-income people. Some of this work is obvious, such as building a clinic or financing a grocery store in a food desert. Other times the health dimensions of community development interventions are less obvious. For example, there is some evidence that when a family stays put during early childhood the children develop a greater resistance to illness as adults. Long-term affordable housing in safe, well-served neighborhoods can make that stability available to more families. Community development also reduces the health-eroding stress experienced by low-income people in various ways, including: providing access to credit and affordable savings products; financing high-quality day care and schools; increasing access to good jobs through workforce training and small business lending; and organizing residents to feel a greater sense of empowerment.
But there are also many opportunities for the community development sector to work more directly with the health care sector:
Transform the next generation of federally qualified health centers. The Affordable Care Act provides $11 billion over the next five years to operate, expand, and build new community health centers. Capital Link estimates that $16 billion of investment will be required to support these neighborhood health centers. This is an opportunity to recast the community clinics as community developers themselves. Many clinics already think of the entire community as their patient.
Federally qualified health clinics could coordinate more closely with community development financial institutions and community development corporations and become better builders of social support networks. A bridge between clinics and community development would allow the medical community to plug into a network of strong connections to community groups, local government, local social service providers, and a host of funders.
Enlist the mainstream medical community. As ideal as clinics are as coordinators in integrating health and community development, they do not have the resources to effect the system change we hope is possible if we enlist the larger mainstream medical community. Recently, a hospital administrator characterized her job as changing the focus of her hospital from treating illness to promoting wellness. But she had never heard of a community development financial institution and was only vaguely aware of community development. Reaching out to hospitals and other medical institutions could bring considerable new resources and expertise. Nonprofit hospitals might be increasingly motivated to connect if this activity helps them maintain their community benefit status in the tax code.
Measure the health outcomes of community development programs. There is enthusiasm now for programs such as the federal Healthy Foods Finance Initiative, a half-billion-dollar-per-year program jointly administered by the CDFI Fund and the Department of Agriculture. But do we know the full health value of access to fresh produce and healthier foods? That is essential to the success of the program and to evaluating potential trade-offs. Maybe there would be better outcomes if we used that money on school lunch programs? Or maybe it would be better to invest in better transportation to take people to existing stores? Or a combination?
A partnership with the public health community, with its skill in measuring and tracking health outcomes, could help us figure out if scarce community development dollars are being spent in the most effective way. And having data that tell a story of improved health would add enormous light and power to the community development movement.
Build a business model. It is already possible to use existing community development funding streams to make community and health-improving investments, but there are ways to strengthen and institutionalize this connection.
The Accountable Care Organization (ACO) provision of the Affordable Care Act, for example, creates groups of providers who receive financial incentives for hitting various outcome and cost-saving benchmarks. In low-income areas, community development would be a natural partner in delivering the preventive services, case coordination, and community investments that would help ACO providers substantially improve the health outcomes for their patients.
Social Impact Bonds and other so-called “pay for success” models also have the potential to unlock new sources of capital for community development. Pay-for-success financing is based on the promise of a future payout, likely from a government agency, for delivering specific predetermined social outcomes. In the Social Impact Bond pilot, for example, the targeted outcome is a reduction in recidivism. As recidivism goes down, the payout to investors in anti-recidivism service providers goes up.
Similarly, a supportive housing pay-for-success program could raise private capital for wrap-around services like an on-site health clinic or a social service coordinator. The project’s investors would bear the risk of the initial investment based on a contract with public health agencies to pay for improved health among the building’s high-risk population. This accomplishes two important goals. First, it aligns the incentives of the project developer with those of public health officials. And second, it encourages cost-effective innovation at the project level because investors will need to weigh the risk of capturing the potential rewards against the upfront costs needed to secure them.
Combined, these two important features create a business model that captures downstream health care savings to support programs that improve health.
Finally, there needs to be some long-term initiatives that study the possible benefit of “bending the cost curve” for the entities that are ultimately on the hook for medical expenses: the federal government (through Medicare and Medicaid) and private health insurers. If health/community development integration can be proven to save medical costs, then it might be a cost-saving strategy for both government and private insurance companies as well.
Moving beyond coordination to integration will require the health sector to see the community development sector as its partner in addressing the “upstream” factors that influence health. And it will require the community development sector to work with the health sector to generate data and measurement to help build the business case for constructive interventions in low-income neighborhoods. Working together, both sectors can build a new sustainable business model to improve communities and improve health.
David Erickson is director of the Center for Community Development Investment at the Federal Reserve Bank of San Francisco.
Nancy O. Andrews is president and CEO at the Low Income Investment Fund.
- Overcoming Obstacles to Health, by Paula Braveman and Susan Egerter, Robert Wood Johnson Foundation Commission to Build a Healthier America, 2008.
- David Williams, “Exploring the Intersection of Community Development and Health,” Federal Reserve Board of Governors Healthy Communities Conference, 2010.
- “The Case for More Active Policy Attention to Health Promotion,” by J. Michael McGinnis, Pamela Williams-Russo, and James R. Knickman, Health Affairs, March 2002.
- Unnatural Causes, PBS television documentary.
- “Social Impact Bonds,” Social Finance.