Kaiser Permanente is spending $400 million on affordable housing initiatives
The system framed the investment as part of an overall push to address the impacts of the COVID-19 pandemic.
Photo: Ezra Bailey/Getty Images
Kaiser Permanente is joining the ranks of healthcare organizations making investments in affordable housing, pledging $400 million toward economic development and housing. This doubles the nonprofit organization's financial commitment to its Thriving Communities social impact investment fund.
The integrated healthcare system based in Oakland, California framed the investment as part of an overall push to address the impacts of the COVID-19 pandemic among underrepresented communities, including low-income and communities of color. The health and economic well-being of these communities have suffered especially during the pandemic, Kaiser said.
The Thriving Communities Fund, which was launched in 2018 with $200 million, is on track to create and preserve 15,000 units of affordable housing by 2025. Doubling the fund, the system said, will allow it to increase that total to preserve 30,000 units by 2030.
Another focus of the fund will be advancing inclusive economic development to address the systemic economic disadvantages and discrimination that underpin the ongoing housing crisis, the system said.
WHAT'S THE IMPACT
Kaiser Permanente described the monetary commitment as "impact investing," a form of value-based investment geared to deliver benefits such as affordable housing, community social services and small-business financing.
"Kaiser Permanente views impact investing as a meaningful way to support healthy, financially strong communities – where all people can keep a roof over their heads, put food on the table, get the medical care they need when they need it, and lead the lives they want to live," the system said in a statement.
The organization made the case that healthcare systems are ideally suited to be impact investors, as their resources have the potential to move economic levers that positively affect community health. Directing investments to areas such as affordable housing increases the long-term potential for returns on investment by strengthening community health, according to Kaiser.
"By bringing together the capabilities of the health and investment sectors, Kaiser Permanente can strengthen neighborhoods, improve health, and help communities thrive," said Dr. Bechara Choucair, senior vice president and chief health officer for Kaiser Permanente. "Kaiser Permanente supports equitable economic opportunity through its approaches to hiring, purchasing, building, investing, and partnering with communities. Ultimately, this work will help our communities overcome systemic and structural economic disadvantages."
THE LARGER TREND
The integrated health system isn't the only one making investments in this area. UnitedHealth Group, which owns the nation's largest insurer in UnitedHealthcare, recently announced a $100 million investment toward affordable housing initiatives with a focus on the Health and Housing Fund, a partnership with Stewards of Affordable Housing for the Future and National Affordable Housing Trust.
To date, the company's investments total roughly $800 million, and according to a statement, this has resulted in the creation of nearly 19,000 homes for those struggling with housing insecurity. The new investment will add about 1,000 homes to that total.
Since 2011, through its UnitedHealthcare and Optum businesses, UHG has helped build new affordable housing developments in 26 states and Washington D.C. for people in need of affordable housing supportive services. The investments are made through the use of Low-Income Housing Investment Tax Credits, Community Reinvestment Act loans and direct investments.
Along with factors such as transportation access, substance abuse and behavioral health issues, low income is a social determinant of health that can suppress the ability of modern medicine to improve lives, according to a 2019 PricewaterhouseCoopers report.
By investing earlier in social determinants strategies that help people with housing, exercise, mental health support and the ability to afford medications, governments and health systems stand to save money in the long term and improve health outcomes.
PwC's results suggest that action on the SDoH front isn't optional; healthcare leaders who don't act on social determinants will likely spend more and more money on worse and worse health outcomes.
A 2017 National Academy of Medicine report found that 80% of an individual's health is determined by what happens outside of a doctor's office. And according to the National Low Income Housing Coalition, COVID-19, coupled with economic conditions, has brought harm to millions of families, with 70% of the nation's 10.8 million extremely low-income renter households being severely burdened by housing costs – spending more than half of their incomes on rent and utilities.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
