Growing Healthcare’s Anchor Mission

18% of U.S. GDP is dedicated to healthcare. To some, this statistic might make the idea of healthcare transformation a daunting prospect, but to Tyler Norris, Vice President of Total Health Partnerships at Kaiser Permanente, it is an opportunity: “18% of our GDP can become part of driving the economic, social, and environmental drivers of health,” Norris explained excitedly on a recent Dialouge4Health web forum hosted by the Public Health Institute. Kaiser Permanente is part of a growing cadre of institutions that are recognizing that in order to fully carry out their missions, they must bring all of their resources in alignment with community health. On January 27, Norris joined Steve Standley, Chief Administrative Officer of University Hospitals, Amy Slonim, Senior Program Officer with the Robert Wood Johnson Foundation; Matthew Marsom, Vice President of Public Policy and Programs at the Public Health Institute; and Democracy Collaborative’s David Zuckerman, Manager of Healthcare Engagement for a candid conversation about this growing movement.

Titled “Stepping Up to Make a Difference: The Vital Role of Anchor Institutions in Community Health Improvement,” the web forum focused on how University Hospitals and Kaiser Permanente are leveraging their business practices to strengthen their local communities, and more broadly, the growing anchor institution movement within healthcare. This approach is driven by growing recognition that health is determined primarily by factors outside hospital walls. Rather than access to care and treatment, health is most affected by the conditions where people live and work, making factors such financial security and stable housing critical components of community health. And because of its economic might, healthcare is in fact well situated to address these determinants. Hospitals are major employers, purchase vast quantities of goods, and have hefty endowment portfolios—all assets that can be brought to bear to improve community health.

UH provides an extraordinarily clear example as to why an anchor approach is needed. Despite the presence of multiple world-class medical facilities, the neighborhoods surrounding UH in the Greater University Circle experience alarmingly disparate health effects. Infant mortality is tremendously high, over twice the county average. Lifespans are over 20 years behind suburbs just 8 miles away. These same neighborhoods are some of the poorest in the nation with 24% unemployment and persistent generational poverty. Clearly, creating health and well-being relies on more than proximity to hospitals and clinics, necessitating new and innovative approaches. 

UH leadership recognized this and utilized their capital expansion and strategic visioning process to prioritize local job creation and neighborhood stability. The resulting Vision 2010 project, which included the construction of two new hospitals and thirty-six other major construction projects totaling over one billion dollars, put supporting the local economy and creating living wage jobs for residents at the forefront. Practices such as breaking apart contracts so they were more accessible to local vendors, using long-term contract agreements to get vendors commit to local hiring, and investing in the creation of worker-owned cooperatives that hired local residents were all part of the portfolio of innovative strategies Steve Standley employed. And these efforts saw remarkable results—Vision 2010 generated 5,200 jobs and over $500 million in salaries.

UH is just one of a growing number of health systems that are taking on the mantle of anchor institution. Kaiser Permanente is another. Across the country we are seeing healthcare institutions leveraging their purchasing, hiring, endowment portfolio, real estate and other assets to improve community health and well being. Currently, The Democracy Collaborative is working on a Robert Wood Johnson Foundation funded project to create toolkits in these areas, focusing on local & diverse procurement, local & diverse hiring and workforce development, and community investment. The goal is to synthesize best practices and usable resources so that institutions are better able to adopt and move forward these strategies within their own institution. This was also the topic at hand on this web forum, with a dynamic conversation between participants about the broad institutional shifts that need to happen to move this work forward. The presenters identified key drivers of success and ways to scale this approach across the field. These drivers include: 

1. Shifting the narrative from “doing good things” to total mission alignment
2. Linking anchor approaches to healthcare reform and calls for greater accountability
3. Changing institutional culture and getting buy-in from top leadership

Shifting the narrative from “doing good things” to mission alignment

All participants stressed that employing these strategies is not just about doing the “right thing,” but about more fully realizing the institution’s mission. “I think for most of us health systems it's a shift of mindset to recognize what we already are,” explained Norris. And that mindset shift is significant. Community benefit has traditionally been thought of as its own separate sphere, relegated to corporate social responsibility. Kaiser Permanente is taking a markedly different approach: “If we're going to have a measurable impact on population health, we need to move everything we've got. Not just the $2 billion that's community benefit. The other $58 billion is the rest of the enterprise.” Standley echoed this stating “you need to get traditional bottom line thinkers beyond the community benefit or social responsibility lens.” Community improvement should not be thought of an an ancillary activity, but a central tenant of how business gets done. Indeed, health improvement is a critical component of staying financially viable. Improving community health will only help to reduce preventable demand on the delivery system and lower healthcare costs, making this approach critical to long term success.

Linking anchor approaches to healthcare reform and calls for greater accountability

Leveraging resources to improve population health will become even more critical to meeting mission goals moving forward. Investing in upstream determinants can help institutions prepare for the inevitable changes coming in healthcare payment models that prioritize value over volume. Rather than being reimbursed for the number of patients seen, hospital payment will be based on keeping patients out of the hospital. Instead of just treating the sick, the hospital becomes accountable for the health of the surrounding community and will be penalized for re-admissions and other indicators of poor health.

Standley explained how UH’s anchor approaches have prepared them for this: “We are well positioned as healthcare reform came on that this now is going to be the vehicle for us to engage those people that are going to be responsible for.” Norris explicitly linked Kaiser’s anchor approach to reducing the preventable demand on their system, which will be a critical business practice moving forward.

The Community Health Needs Assessment requirements mandated by the Affordable Care Act also lay the groundwork for an anchor approach. Zuckerman explained how the two are intertwined: “While not having a lot of teeth, the CHNA has been a tool for framing a new conversation. When you see poverty, unemployment, housing affordability as issues that rise to the top in communities…Those need assessments have been an opportunity to build new relationships and also increase collaboration.” Given that many institutions are already cash strapped, in order to address these health needs, hospitals will have to think strategically about the money they are already spending, and how to direct existing resources towards these interventions.

On top of the legally mandated process for community benefit, healthcare is also increasingly subject to public scrutiny. Local governments and communities are demanding more from hospitals, especially not-for-profit institutions. Standley explained that this was a drive for UH: “We don't pay property tax. We are mostly in cities that have school systems that are needing dollars. We better do something to replace that position in a meaningful way so we're not taking care of the children but providing jobs for their parents so they can afford to take care of their children.” This public interest component has another effect—in order to attract new employees, hospitals will increasingly have to demonstrate that they have a presence in the community as this something highly valued by new recruits.    

Changing institutional culture and getting buy-in from top leadership

While mission alignment may be easy to see at the broad scale, in reality this approach goes against a lot of the organizational culture and existing practices, and even performance incentives. Standley and Norris both emphasized that implementing these strategies is no small task and requires a massive culture shift within the institution. “It keeps reminding your senior leadership culture that we're doing much more than the traditional healthcare mission, which is dramatic and big here. This is a completely new space for us,” explained Standley.  

Take purchasing, for example. Localizing spend goes against the over 20-year old philosophy of consolidating purchasing through group purchasing organizations. Procurement is traditionally assessed on lowest cost alone, and the contracting process prioritizes efficiency over accessibility. In order to meet their Vision 2010 goas, UH had to undergo a massive culture shift, reorienting the bidding process, how they awarded contracts, their vendor tracking system—virtually all parts of the supply chain. This reorientation requires leadership from the top, a theme that came up in the web forum time and time again. Both Standley and Norris named commitment from their CEO’s as critical for moving this work forward. “We have to change the way a couple hundred thousand people operate,” laughed Norris when describing the impact of CEO’s Bernard Tyson’s leadership.

One of the key ways leadership can ensure that this culture change takes root is by redefining the metrics for success. A breakthrough for UH was to define success in terms of jobs created rather than traditional measures of cost savings or time completed. UH translated these metrics into goals, which were then tied to performance evaluations and compensation. And perhaps most importantly, they were made public which ensured that UH was held accountable. 

Moving forward:

Mission alignment, accountability for population health, and commitment from leadership are critical components to growing an anchor mission approach in healthcare. The first two are present at all institutions: the importance of the social determinants of health, paired with shifting payment models that incentivize improving population health, make an anchor approach prudent and necessary for any hospital. As for the leadership component, this web forum highlighted examples of tremendous leadership and vision. But how do you build that at other institutions? Increasingly, it is communities are holding healthcare institutions accountable and pushing them to innovate. This past January, after an extensive community organizing effort, Yale University committed to hire 1,000 local residents from surrounding neighborhoods with high rates of unemployment and poverty. In a similar vein, Johns Hopkins rolled out an extensive local purchasing and local hire effort in response to calls for the institution to do more to enhance the local economy and address instability. More and more, institutions will realize that the mindset of UH and Kaiser Permanente is not just rooted in neighborliness, but responsibility. And more and more, communities will hold health systems accountable for their role in improving community health.

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The full webinar is available on the Dialogue4Health website, which includes presentation slides, a mp3 recording, and the transcript from the conversation. The learn more about the all-in-for mission approach discussed on the webinar, read The Democracy Collaborative’s paper Can Hospitals Heal America’s Communities, co-written by Democracy Collaborative Co-Founder and President Ted Howard with Tyler Norris. More information about UH’s Vision 2010 process can be found here, and Dave Zuckerman’s report on innovative community economic development approaches within healthcare can be found here.

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