By Merrill Goozner | May 19, 2018
Social scientists know a lot about the root causes of so much of
the ill-health in our society, yet healthcare systems have rarely acted on that
knowledge. That's finally starting to change.
Next week, a 2-year-old network of major healthcare systems dedicated to combating the social problems contributing to ill health in their own backyards will go public. They've chosen to highlight a San Francisco Bay Area food production center that will be up and running by the end of this year.
Located in Richmond, a working-class community that's two-thirds Hispanic and African-American, the center will employ about 200 people in what its sponsors promise will be living-wage jobs. Hospitals belonging to Kaiser Permanente, Dignity Health and the University of California at San Francisco will purchase fresh meals from the facility.
Organizers say this is just the start of a nationwide movement to use healthcare systems, often a community's largest employer and purchaser, as an "anchor" institution for local economic development. Three dozen major systems, which collectively represent 600 hospitals with over 1 million employees in more than 400 cities and towns, have already signed on to the Healthcare Anchor Network. They are pledging to use their hiring, purchasing and investment decisions to promote better-paying jobs.
It's a promising development in healthcare's evolving approach to population health. The core concept rests on the belief that achieving better health outcomes for the populations for which they're at risk financially will ultimately depend on improving the social conditions that spawned their diseases.
It's well-known that 5% of patients with multiple chronic conditions like diabetes, heart disease and many cancers account for about half of healthcare spending. People suffering disproportionately from those conditions have spent much of their lives in social environments marred by unemployment, poor housing and food insecurity.
Despite that correlation, the U.S. invests less than any other advanced industrial country—just 4% of gross domestic product—in ameliorating adverse social conditions.
Can health systems in their roles as employers, purchasers and investors make up for the government shortfall? Using anchor institutions like universities, hospitals, governments and major employers to foster jobs and economic development has a long pedigree.
Since the 1970s, governments and large employers have promoted purchasing policies and construction contracts that favor small, minority and woman-owned businesses. Major institutions use preferential hiring to increase their roster of employees from disadvantaged backgrounds.
More recently, health systems have begun integrating direct social service provision into their treatment plans. When illnesses are directly related to social conditions, patients are referred to food banks or housing agencies in the hope improved living conditions will help prevent trips to the emergency department.
However, the old saying is still spot-on. The best anti-poverty program is a good job. But getting low-income people into better-paying jobs—the goal of the network—is a tall order. A few years ago, Ascension, the nation's second-largest health system, made headlines by announcing it was raising its minimum wage to $11 an hour. That is still less than a living wage in most areas of the country. What would it cost to go higher at the nation's 5,000 hospitals?
Concentrating food, laundry or other services at socially conscious employers will probably raise costs, especially if the previous vendors won contracts by beating down workers' wages. And how many CEOs, CFOs and boards will be willing to accept lower returns from investing in low-income housing or job-creating enterprises?
It is possible to get to yes on becoming an anchor institution. All it requires is embracing healthcare's mission and having faith the investments will pay off in the long run.
It's nice to see some of the nation's leading systems taking that risk.
Next week, a 2-year-old network of major healthcare systems dedicated to combating the social problems contributing to ill health in their own backyards will go public. They've chosen to highlight a San Francisco Bay Area food production center that will be up and running by the end of this year.
Located in Richmond, a working-class community that's two-thirds Hispanic and African-American, the center will employ about 200 people in what its sponsors promise will be living-wage jobs. Hospitals belonging to Kaiser Permanente, Dignity Health and the University of California at San Francisco will purchase fresh meals from the facility.
Organizers say this is just the start of a nationwide movement to use healthcare systems, often a community's largest employer and purchaser, as an "anchor" institution for local economic development. Three dozen major systems, which collectively represent 600 hospitals with over 1 million employees in more than 400 cities and towns, have already signed on to the Healthcare Anchor Network. They are pledging to use their hiring, purchasing and investment decisions to promote better-paying jobs.
It's a promising development in healthcare's evolving approach to population health. The core concept rests on the belief that achieving better health outcomes for the populations for which they're at risk financially will ultimately depend on improving the social conditions that spawned their diseases.
It's well-known that 5% of patients with multiple chronic conditions like diabetes, heart disease and many cancers account for about half of healthcare spending. People suffering disproportionately from those conditions have spent much of their lives in social environments marred by unemployment, poor housing and food insecurity.
Despite that correlation, the U.S. invests less than any other advanced industrial country—just 4% of gross domestic product—in ameliorating adverse social conditions.
Can health systems in their roles as employers, purchasers and investors make up for the government shortfall? Using anchor institutions like universities, hospitals, governments and major employers to foster jobs and economic development has a long pedigree.
Since the 1970s, governments and large employers have promoted purchasing policies and construction contracts that favor small, minority and woman-owned businesses. Major institutions use preferential hiring to increase their roster of employees from disadvantaged backgrounds.
More recently, health systems have begun integrating direct social service provision into their treatment plans. When illnesses are directly related to social conditions, patients are referred to food banks or housing agencies in the hope improved living conditions will help prevent trips to the emergency department.
However, the old saying is still spot-on. The best anti-poverty program is a good job. But getting low-income people into better-paying jobs—the goal of the network—is a tall order. A few years ago, Ascension, the nation's second-largest health system, made headlines by announcing it was raising its minimum wage to $11 an hour. That is still less than a living wage in most areas of the country. What would it cost to go higher at the nation's 5,000 hospitals?
Concentrating food, laundry or other services at socially conscious employers will probably raise costs, especially if the previous vendors won contracts by beating down workers' wages. And how many CEOs, CFOs and boards will be willing to accept lower returns from investing in low-income housing or job-creating enterprises?
It is possible to get to yes on becoming an anchor institution. All it requires is embracing healthcare's mission and having faith the investments will pay off in the long run.
It's nice to see some of the nation's leading systems taking that risk.
Merrill Goozner served as
Editor of Modern Healthcare from December 2012 to April 2017. As Editor
Emeritus, he continues to write a weekly column, participate in Modern
Healthcare education, events and awards programs and provide guidance on
coverage related to healthcare transformation issues. Over the course of his
four decades in journalism, he served as a foreign, national and chief
economics correspondent for the Chicago Tribune and professor of journalism at
New York University. He is the author of The $800 Million Pill: The Truth
Behind the Cost of New Drugs (University of California Press, 2004), and has
contributed articles to numerous publications. Goozner earned a master's degree
in journalism from Columbia University and a bachelor's in history from the
University of Cincinnati, where he received the Distinguished Alumni Award in
2008.
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