Four Insights from Our First Learning Lab With Hospitals

Nonprofit hospitals and health systems are increasingly looking beyond the clinic to strategies like housing, food security and asset building to improve the health of community members. These same organizations have an array of assets-financial resources, land, and expertise-that can be put to work to create more equitable, sustainable, and healthy communities. Accelerating Investments in Healthy Communities (AIHC) is helping a cohort of nine innovative non-profit hospitals and health systems to advance and deepen their efforts to invest in their communities. We are committed to sharing lessons learned from this pioneering group both to inspire action and move the field forward.

Earlier this year, CCI hosted the first set of AIHC Learning Labs. At the labs, teams of 4-5 individuals from the nine participating hospitals and health systems worked through exercises designed to:

  • sharpen their definition of the problem they are trying to solve,
  • consider the appropriate scale for their work given the magnitude of the problem, and
  • reflect on the relationship between their proposed strategies and the results they hope to achieve.

The teams analyzed the ecosystem, communities and markets in which they are situated and calibrated how their institutional goals and approaches fit their context. They also analyzed potential partners and explored how to leverage their contributions by building capital stacks that blend investment from stakeholders with different objectives for mission, risk, and return.

We are eager to share our insights from this first round of work:

  • Team diversity matters: It was valuable to bring together teams that crossed institutional silos and included perspectives from clinical leaders, community benefit staff, finance executives and executives responsible for managing the systems' insurance plans. Each department brought its own motivations for investing upstream, and combining these diverse perspectives made the case for action that much more powerful.
  • Focusing the portfolio: As anchor institutions in their communities, health systems are buffeted by numerous requests for grants and investments by different actors in the community. By taking a more systematic view of the problems that are most important to solve, the health system and community partners have a greater chance of moving from an opportunistic portfolio of investments to a focused strategy.
  • Clarity about scale and role in results: Reflecting on the scale of the prioritized problem and what portion of that problem the health system hoped to address helped ground an analysis of the resources and partners that would be required for success.
  • Lessons in leverage and risk mitigation: Health system leaders whose backgrounds were not primarily in the financial arena were interested to learn how grant resources could be stacked and leveraged to mitigate investment risk for other actors. The metaphor of "sheet cake" vs. "layer cake" was useful here: spending grant dollars on affordable housing results in a dollar of housing for every dollar of grant (sheet cake). If instead health systems used their grant dollars as loss reserves or other forms of credit enhancement to reduce risk or increase return for banks, then a dollar of hospital investment could produce $3-5 of affordable housing (layer cake). Similarly, if health systems invested in housing using low-interest rate loans or other flexible capital, they could help build out more robust capital stacks, increasing the flow of resources to these important community priorities.

The nine health institutions will meet again in about a month from now to further refine their goals and strategies. We look forward to sharing what we learn via our newsletter.

Transforming investment in communities

The Center for Community Investment at the Lincoln Institute of Land Policy is supported by the Robert Wood Johnson Foundation, The Kresge Foundation, the John D. and Catherine T. MacArthur Foundation, and the Surdna Foundation.

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