The economic and racial divides that drive health disparities within communities are stark and widening. Twenty-two percent of children in the United States live in poverty, a percentage that has remained relatively unchanged since 1960. The number of Americans living in concentrated poverty has doubled from 7 million to 14 million since 2000.
Even as the nation moves to a majority-minority population before 2050, the median net wealth for whites is 13 times greater than that of African-Americans and 10 times greater than that of Latinos. This gulf has only widened since the Great Recession. These disparities have contributed to doubling the difference in lifespan after age 50 between the richest and the poorest in the United States — now 14 years — since the 1970s.
At the same time, hospitals and health care systems have become their communities' largest employers. Nationally, health care institutions employ more than 5.5 million people, purchase more than $350 billion in goods and services annually, and have investment portfolios estimated at $400 billion.
More health care systems are adapting to unprecedented changes in reimbursement. They are increasingly at risk for patient health outcomes even when these outcomes are determined by economic, social and environmental factors outside their area of focus. Ultimately, health systems need to address these factors to control health care costs.
Toolkit for healthy communities
Across the country, institutions are embracing their role as a community anchor, but much more needs to be done. For example, only 2 percent of all hospital purchasing dollars are directed toward minority- and women-owned businesses. Hospitals Aligned for Healthy Communities, a free toolkit series developed with support from the Robert Wood Johnson Foundation, helps health systems use their hiring, purchasing and investing power to improve the health and well-being of underserved communities and communities of color.
This downloadable series explores best practices by leading health care institutions in inclusive local hiring and purchasing strategies, as well as place-based investment. It provides tools, templates and other interactive resources to improve outcomes in the communities that a health care system serves.
The first toolkit, Inclusive, Local Hiring: Building the Pipeline to a Healthy Community, explores how health systems can employ “outside in” and “inside up” strategies to provide opportunities for residents from low-income and diverse local neighborhoods. The outside in strategies create alternative pathways from the community into the institution, such as workforce intermediary partnerships, paid internship programs, and cohort models of learning and hiring. The inside up strategies connect front-line workers to pathways for career advancement within the institution, including job coaching, tuition assistance and on-site training programs.
University Hospitals in Cleveland works with community-based organizations to hire diverse residents from disinvested neighborhoods near the institution. It then connects them to internal career development and advancement opportunities. Over 2½ years, this initiative has led to more than 165 hires, increasing overall retention and reducing the interview-to-hire ratio for recruiters.
Across the country, health care institutions are recognizing that they can also use their supply chains to address economic and environmental inequities. The second toolkit in the series, Inclusive, Local Sourcing: Purchasing for People and Place, details successful examples of health care systems that are using their position as their community’s largest purchaser to address inequities. These systems understand that a thriving local economy is fundamental to a healthy community.
There are two primary strategies for developing inclusive, local purchasing strategies: creating connections and building capacity. Connection strategies link existing local and diverse vendors to contracting opportunities within the institution. Capacity strategies build up the ability of the local business community to meet health care system supply-chain needs.
In Cleveland, University Hospitals is employing its purchasing power to revitalize urban neighborhoods. By incentivizing vendors to hire local and minority residents, the system is helping incubate environmentally sustainable, employee-owned businesses that now employ more than 100 residents from low-income neighborhoods.
In West Virginia, Charleston Area Medical Center is intentionally growing the capacity of the regional food system by purchasing from local farmers.
Chicago Anchors for a Strong Economy has created a platform for member hospitals, universities and public institutions to foster inclusive, economic growth through purchasing and hiring practices in Chicago-area neighborhoods.
The final toolkit, Place-based Investing: Creating Sustainable Returns and Strong Communities, outlines the opportunity for health systems to use their investment portfolios to strengthen their local communities. Redirecting even a small portion of these resources can direct billions of dollars toward reducing economic and environmental disparities.
Hospitals and health systems have a range of high-impact opportunities. They can begin by shifting cash and cash equivalents to local community banks and credit unions, or by investing in low-risk, fixed-income products offered by community development financial intermediaries providing key financial services and resources to underserved communities.
Dignity Health, based in San Francisco, allocates up to 5 percent of its nearly $10 billion investment portfolio to below-market interest rate loans to nonprofit organizations that are improving health outcomes in their communities. Over the life of the program, Dignity has invested more than $180 million in loans and equity — an intentional strategy to complement its community-benefit grants and other commitments.
In 2015, ProMedica, based in Toledo, Ohio, began a pilot project to position additional deposits of more than $250,000 and up to $3 million with smaller community banks in certificates of deposit. The goal is to increase the resources those banks can reinvest in their communities through loans and other investments. ProMedica believes this is a powerful way to balance its fiduciary responsibility while improving the health and wealth of its local communities.
Nurturing the community
Health care systems need to to advance development strategies that foster a healthy and thriving local community. By harnessing their everyday business operations for community health improvement, health systems can ensure that dollars are flowing back into the communities that comprise their patient base.
In working with other large, local employers that are rooted in place — like universities, local governments and public schools — hospitals and health care systems can meaningfully increase the impact of these strategies. Shifting hiring, purchasing and investing practices locally and intentionally are powerful and necessary tools for health care to achieve its mission of improving the health and well-being of its patients and community.
David Zuckerman, M.P.P., is a manager for health care engagement at the Democracy Collaborative in Washington, D.C.
The opinions expressed by the author do not necessarily reflect the policy of the American Hospital Association.