A massive shift is taking place across the nation: hospitals have increasingly become the economic engines of their communities. With annual purchasing of half a trillion dollars and billions in their investment portfolios, hospitals are a powerful economic force that, if employed strategically, could have a major positive impact on community health and well-being. As a result, a growing number of hospitals are engaging in community economic development, recognizing the importance of environmental hazards, poverty, unemployment, and other social factors in determining health outcomes and the vibrancy of their communities.
In moving further upstream to address socioeconomic factors, these innovative hospitals have advanced beyond their traditional practice of simply providing acute care, acknowledging that today this historical core competency is insufficient if they are to accomplish their nonprofit and public missions of “health promotion.”
Some hospitals, like Bon Secours Health System, have explored affordable housing to reduce homelessness and inadequate housing conditions. Others, like Dignity Health, have recognized that utilizing a portion of their endowment for community lending can send powerful and positive ripple effects through the communities they serve. University Hospitals in Northeast Ohio has prioritized localizing its nearly $1 billion in annual procurement, “discovering that hospitals can help heal entire cities through economic development,” as its CEO Tom Zenty noted. Leveraging previously untapped institutional resources, Kaiser Permanente has adopted a philosophy called “Total Health,” understanding the environmental, community and economic factors that impact health outcomes, and has begun to fully realign their organization to achieve this vision.
Another critical factor driving these shifts is an often overlooked provision of the Affordable Care Act, which requires every nonprofit hospital to complete a Community Health Needs Assessment in their community every three years. This is a strategic new opportunity to shift the conversation: a health system must for the first time engage its local community on its health—not healthcare—problems and explain how the hospital intends to address them. Often, when so engaged, communities identify joblessness, poverty, affordable housing, and clean and safe streets—and not just the presence or absence of disease—as major factors affecting the health of their community.
In many communities, anchor institutions like hospitals remain on the sidelines in the face of pressing economic and health challenges. But across the country, more and more healthcare institutions are shifting their historically inward gaze away from a circumscribed and incomplete vision of health promotion and outwards toward the total well-being of the communities they serve — a positive trend that will hopefully continue to grow.
Southwest Baltimore’s primary anchor institution has adopted an approach to community and economic development that focuses on revitalizing neighborhoods and rehabilitating housing, providing family and women’s services, offering youth employment and workforce development, and expanding financial services.
The center of this $8.5 billion health system is spurring local revitalization of the surrounding region and Downtown Rochester, consciously targeting local and diverse suppliers, and pioneering an anchor-led community land trust that has created 875 units of permanently affordable housing.
This three-state rural health system is breaking new ground by using its anchor power to help sustain its communities and the environment, from helping start an innovative multistakeholder food cooperative to implementing extensive renewable energy initiatives.