According to a recent Gallup poll, just 3% of Americans see COVID-19 as the most important problem facing America. Instead, many more Americans—1 in 5, according to the poll—are now focused on the next threat to the nation’s health: growing financial insecurity. Driven by the highest inflation rates in decades, more families are forced to choose between healthcare and basic living expenses. Hospitals and health systems can address this new crisis by investing directly in the economic well-being of the communities they serve.
The links between economic stress and poor health are well documented. In the face of financial hardship, expenses like rent, food and gas take priority over seeking preventive care or needed medical attention. At the same time, making those difficult decisions can impose extraordinary stress.
Financial insecurity is associated with poor mental health, depression, obesity and chronic disease. Among low-income Americans with chronic and behavioral health problems, nearly 1 in 3 experience serious psychological stress, compared with fewer than 1 in 10 higher-income people with similar health conditions. Conversely, a recent study found that people with greater financial security reported better mental and physical health.
The pandemic exacerbated and deepened well-worn economic divides, with poorer communities—often communities of color—experiencing more job loss and barriers to financial assistance, while having fewer options to financially weather tough times.
Hospitals and health systems hold significant economic power and influence. Through impact investing, a form of values-based investment that’s used to deliver positive, measurable social and environmental benefits, they can strengthen the health of the communities they serve.
Health systems can deploy their resources to influence upstream, economic levers that drive community health. Directing investments to affordable housing and local businesses has the potential for long-term returns on community health. The Healthcare Anchor Network is bringing together health systems across the country to support equitable economic development in their local communities.
Kaiser Permanente, one of the nation’s largest health systems, a leading not-for-profit health plan, and a founding member of HAN, has been impact investing since 2018, when it established the $200 million Thriving Communities Fund—recently doubled to $400 million—to help overcome systemic barriers and reduce wealth disparities in our communities.
Impact investing coupled with grantmaking strategies can lift up local economies, including small businesses. For example, Amanda Gordon, the first Black woman owner of a car dealership in Colorado, was able to strengthen her cash flow, increase employee pay, and lay the groundwork for future expansion due to technical assistance from initiatives from Inner City Capital Connections and Pacific Community Ventures, organizations funded by Kaiser Permanente. To date, Kaiser Permanente’s support for small businesses has benefited more than 18,000 business owners, 78% of whom are entrepreneurs of color.
This approach can also provide in-depth financial assistance to individuals in need. Health systems can collaborate with expert organizations in the communities they serve to provide financial coaching—support to help individuals get out of debt, increase savings, build credit and pursue financial goals, while increasing financial security and resilience.
Investing in communities isn’t just the right thing to do; it makes business sense for health systems. People with financial stability enjoy better health and better health coverage, which means fewer uninsured or underinsured people skipping treatment or requiring costly, often uncompensated care that burdens hospitals and health systems. And strong community health can help ensure we’re more resilient to future health crises.
The economic hardships and inequities made worse by COVID-19 and inflation are deeply entrenched, but health systems are uniquely positioned to address this intersection of health, wealth and equity. It’s time to reimagine the role of health systems beyond prevention and individual care to improving community health and equity. Impact investing—working in conjunction with not-for-profit experts in building and maintaining individual and community financial health—can help us get there.
Financial insecurity is the next great health crisis is written by Dr. Bechara Choucair for www.modernhealthcare.com