There’s a growing body of evidence that many unreimbursed health care costs incurred by hospitals can be avoided simply by making investments that stabilize the lives of people who are high-frequency, uninsured patients.
Recognizing the positive effects that result from hospitals investing in their host communities, New Jersey’s Housing and Mortgage Finance Agency (HMFA) recently announced a program to encourage hospitals to accelerate their investment in housing.
For hospitals that are interested in taking advantage of the HMFA program but that might be daunted by unfamiliar issues, it could be helpful to consult with peer institutions that are working together to exchange information and to learn from one another.
The NY-NJ-CT Anchor Opportunity Network (AON) includes healthcare and higher education institutions that are working together to exchange best practices to advance effective approaches to investing in communities.
Connection between Housing and Health Care Costs
The HMFA program hopes to promote outcomes similar to those documented in recent research.
Researchers in Hudson County, NJ, tracked the health care use patterns of 25 “frequent user” patients before and after being placed in stable housing situations, and found that medical and shelter costs for that group decreased from $850,000 to $450,000 within a single year of the patients receiving housing placements.
In Camden, NJ, researchers have found that providing housing to the chronically homeless has led to a 60 percent reduction in health care services sought. More systematic research by the Center for Housing Policy and the Robert Wood Johnson Foundation make similar findings based on a review of housing and health care costs around the country.
The mutual benefits for hospitals and patients that result from stabilized housing conditions is just one connection between hospitals and the communities they serve, one that unites hospitals’ healthcare mission with economic efficiency.
Other Connections between Hospitals and Host Communities
Other ways that hospitals can connect with their host communities to provide mutual benefits include:
- Investment in employee housing: The benefits of housing provision extend beyond neighborhood stabilization and improved health outcomes to support housing opportunities for hospital employees, and can improve hospital access to critical workers.
- Coordinated capital investments: When hospitals and local governments coordinate their respective infrastructure planning, they improve efficiencies and can multiply their impact.
- Local hiring and workforce development: Training and hiring local and diverse residents can create a reliable workforce for anchor institutions while building effective career ladders.
- Inclusive, local purchasing: Directing purchasing by institutions toward local businesses strengthens local economies while attracting private investment.
HMFA Program – Implications for Hospitals
The HMFA has asked interested hospitals in New Jersey to submit letters by December 17th expressing interest in building housing on hospital land and describing the projects they are interested in building. By partnering with HMFA, interested hospitals can get access to HMFA funding, and potentially even access to HMFA financing of hospitals’ share of funding.
It is too early to tell how many hospitals will submit proposals under this program. Providing housing on hospital land to achieve the diverse goals envisioned will require project designs that may not be familiar to hospitals, which are usually more focused on reliable operations than on creating community places. It will also require developer partnerships, project funding and finance, and business case analysis that’s different from the usual projects that hospitals advance.
Together with RPA and its partner, Dovetail, institutions in the Anchor Opportunity Network will be watching NJ HMFA’s work with interest. AON will be eager to discuss proposals being considered and share its own lessons learned as part of its mission to engage with anchor institutions, municipal leaders and local communities to create meaningful and sustainable partnerships that drive community well-being and equitable economic growth, as described in the network’s recently released Strategic Action Plan.