Intermountain Health and NewWest Community Capital partner to improve the health of Utah communities
Social determinants of health—such as housing, food, clean water and a safe neighborhood—can drive as much as 80 percent of health outcomes, according to the Robert Wood Johnson Foundation. That’s why Intermountain Health recently announced a $10 million investment in a partnership with NewWest Community Capital, headquartered in Boise, Idaho. The partnership will work on developing affordable housing for those in need.
NewWest is one of 1,300 community development financial institutions (CDFIs) in the country, an organization that seeks to generate economic growth in distressed communities. “We often argue: Are we an industry, or are we a movement?” NewWest President Dutch Haarsma says. “Frankly, we’re a little bit of both.”
On the CDFI Coalition’s website, the organization claims CDFIs measure success by focusing on the double bottom line: economic gains and the contributions they make to the local community. These institutions make decisions about how to meet community needs best, creating a ripple effect that goes far beyond the bottom line.
“We’re getting to the multibillion-dollar mark at this point in terms of this space,” Haarsma says. “I think there’s empirical evidence that these things really do perform well, in good times and bad times, on a risk-adjusted basis. It shows that you can do well by doing good. I think that’s an important component. If we don’t have a good business case, we’re not going to be able to attract capital in this space.”
And capital is needed. According to the Kem C. Gardner Policy Institute, 40,000 renter households in Utah earn less than $24,000 a year. These households face homelessness and eviction as they struggle to pay 50 percent of their income toward housing and utilities.
Intermountain’s contribution to NewWest’s projects will be combined with other contributors who want to invest in affordable-housing projects. NewWest will work with developers to make it happen, but the specifics are unavailable to the public at this time, Haarsma says. “The investment funding from Intermountain Health won’t be around long. We’ll put it to work pretty quickly on projects that we’re comfortable are going to happen next year.”
NewWest currently has projects in Utah, Montana, Idaho, Arizona, New Mexico and Nevada, Haarsma says. “Intermountain Health will be one of many investors in every project that we work on,” he adds. “So rather than target specific projects, it goes into a little bit of every project that we do. We do 10 to 12 projects a year, typically.”
Nick Fritz, director of impact investing at Intermountain, says the purpose of impact investing is to support place-based initiatives that contribute to health and well-being. Intermountain’s place-based investing program accomplishes this by providing flexible capital to projects that address social determinants of health within the health system’s service area.
To date, Intermountain has invested $69 million on housing initiatives, adding up to 1,757 affordable housing units, Fritz says.
"I think this work is really about community first, and it has the power to resonate in large cities and small rural towns. Across the political spectrum, folks see that it's really about problem-solving in very practical ways."
What encouraged Intermountain and NewWest’s partnership?
Part of the reason Intermountain is focusing on place-based investing is due to its membership in the Healthcare Anchor Network, a unique organization started in 2017 that is rallying large hospitals nationwide to throw their resources and clout into impacting their communities, Fritz says.
The Healthcare Anchor Network has 74 health systems that, together, employ more than 2 million people, purchase $100 billion annually and have $200 billion in investment assets.
David Zuckerman, president and founder of Healthcare Anchor Network, says hospitals can have a huge impact when they leverage their assets to build more inclusive local economies. In particular, they can use their hiring, purchasing and investment power to address the root causes of poor health.
“It’s an example of how health system anchors, like Intermountain, can lead and bring along public resources,” Zuckerman says. “I think this work is really about community first, and it has the power to resonate in large cities and small rural towns. Across the political spectrum, folks see that it’s really about problem-solving in very practical ways.”
Zuckerman says health systems are increasingly focused outside their four walls on doing more to address why people come to their emergency rooms in the first place. “As health systems have gone down this path, they really have discovered that it’s because people don’t always have the means to keep themselves healthy in their communities,” he says. “And oftentimes, that’s because we haven’t made investments in the community to allow them to do that in the first place.”
Encouraged by its membership in the Healthcare Anchor Network and the voluntary goals the Network has set for hospitals, Intermountain started allocating a portion of its investable assets to place-based investments in 2018, Fritz says. “The idea with each of these investments is to invest in projects that do two things: one, address the social determinants of health for the communities that we serve, and two, earn a small financial return, basically to maintain the spending power of the portfolio.”
Intermountain is one of the leaders in the Network, Zuckerman says. “They have really taken this to heart and have embraced place-based investing as a strategy, and so they should be commended for that.”
How intentional investments payoff
Most of Intermountain’s place-based investing has addressed housing stability for people in the health system’s service community. “We believe this is backed by research that stable, healthy and safe housing really underpins some pretty critical health outcomes, as well as being linked to a bunch of other outcomes, including education and economic outcomes,” Fritz says.
Intermountain is keenly aware of the affordable housing need and the housing shortage all across the West. The partnership with NewWest was a perfect match for Intermountain, Fritz says. “We found them to be a really mission-aligned partner. They seek to serve a low-income population, which is exactly the population we are trying to serve with our place-based investing. And they’re working in the very same geographies that we consider to be our service area.”
According to Fritz, Intermountain’s investment in affordable housing is only the tip of the iceberg. Several years ago, the health system started screening patients for social determinants of health in almost all its care settings.
“Starting in Utah, and now we’ve started expanding outside of Utah, we are asking patients some simple social determinants of health questions,” Fritz says. “Do you have somewhere to go when you leave here? Do you have a way to get home? Do you have enough food in the cupboard?”
Intermountain is using the data from these questions to inform their ongoing work addressing social determinants of health, but there is still so much to do. If a patient needs housing assistance, Intermountain advises pursuing it through government and nonprofit avenues, but the waiting line for that assistance is long. Much more affordable housing needs to be available, he says.
“I don’t think we have a great answer for people when they say, ‘No, I don’t really have a place to go,’” Fritz says. “That’s why we’re doing work right now to improve what we have to offer.”