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Breathing life into local economies

Sarah Mahoney , special to AAMCNews
December 11, 2018

Buying locally. Offering job training. Investing in budding businesses. Medical schools and teaching hospitals increasingly collaborate with local communities to improve health and help cure economic ills.

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Veronica Inabigo harvests lettuce
Veronica Inabigo harvests lettuce at one of the Evergreen Cooperatives, a portfolio of worker-owned companies founded by hospitals and other economic anchors in Cleveland, Ohio.
Ken Weiss

Leaders at Rush University Medical Center were stumped. Despite their long-standing efforts to address Chicago’s health gap, the statistics remained dismaying. In the Loop, a tony downtown neighborhood, the average life expectancy was 85 years, while in poor neighborhoods a few miles west, it was a shocking 69 years.

So in 2016, Rush shifted strategy, reinventing itself as an economic anchor with the ambitious goal of halving that gap. “Before, we may have been helping the communities, but not in a coordinated, intentional way, and more important, we were not measuring efforts’ social impact,” says Patti O’Neil, Rush’s chief investment officer and treasurer.

Now Rush is thinking much bigger: It is collaborating with local leaders on hiring efforts, re-evaluating how it selects vendors, and lending millions of dollars to revitalize Chicago-based projects.

“An anchor mission means sustainably investing in low-income neighborhoods and communities of color, addressing not just health disparities, but economic and racial inequities as well.”

David Zuckerman
Director
Healthcare Anchor Network

Rush is among a growing number of academic medical leaders that are taking a broader approach to improving health. These institutions are training residents of nearby communities, investing in local businesses, improving housing stock, and more. Additionally, in 2017, several academic systems joined with other health care leaders to help launch the Healthcare Anchor Network (HAN), a group of more than 40 health systems working together on anchoring efforts that is supported by the Democracy Collaborative.

“An anchor mission means sustainably investing in low-income neighborhoods and communities of color, addressing not just health disparities, but economic and racial inequities as well,” says HAN Director David Zuckerman. “The genesis has been the growing realization that improving health requires a more comprehensive equity strategy.”

The move toward economic anchoring also comes from an increasing appreciation of medicine as an economic powerhouse. U.S. medical schools and teaching hospitals represented by the AAMC generate approximately 3.1% of the nation’s gross domestic product and support more than 6.3 million jobs. And 42% of the strategies AAMC members are using to address community health needs focus on poverty, including job creation.

“Medical schools and teaching hospitals can harness their clout and infrastructure to create the social and economic conditions we know are essential to improving the health of individuals and communities,” says AAMC Senior Director for Health Equity Partnerships and Programs Malika Fair, MD, MPH. “They are beginning to take that duty very seriously.”

“Nothing stops a bullet like a job”

In the past, hospitals have tended to hire workers who live outside their impact areas. Now, though, “hiring local” has become a rallying cry among anchor institutions.

“We know about 75% of all jobs are filled by networking. But people in high poverty areas just don’t have those networks.”

Cherita Ellens
Executive Vice President
Skills for Chicagoland’s Future

For example, in 2011, University Hospitals (UH) in Cleveland started working with an organization called NewBridge, investing $1 million to train local residents for in-demand jobs like phlebotomist and nursing assistant. So far, the program, which covers 100% of tuition, has trained 100 people, and once participants are hired, they can take advantage of job coaching for up to a year. “For many, this is their first job,” explains Heidi Gartland, UH vice president of government and community relations. “They need help learning how to handle things like a car breaking down or a sick child. Our HR department says it’s reducing turnover.”

At Rush, collaborating with local partner Skills for Chicagoland's Future (SCF) has produced 124 jobs. “We haven’t been asking Rush to take a chance on our people or create new roles for them,” explains Cherita Ellens, SCF executive vice president. “Instead, we start by asking, `Where are you having trouble filling jobs?’”

Her organization then connects appropriate applicants with Rush. “We know about 75% of all jobs are filled by networking,” she says. “But people in high poverty areas just don’t have those networks.”

Ellens is especially excited about a new effort to shepherd 10 students ages 18 to 25 through community college while also employing them at Rush. In addition to paying participants’ tuition and salary, Rush will provide intensive mentoring. Once the students graduate, the hope is to promote them to more skilled positions.

Darlene Hightower and Lisa Weichman meeting on how to address economic inequities
At a meeting on how to address economic inequities, Darlene Hightower (right), Rush University Medical Center’s associate vice president for community engagement, speaks with Lisa Weichman, head of a Chicago nonprofit.
Rush Production Group

Ellens says it’s hard to overestimate the impact of such efforts on residents of Chicago’s West Side, where violence is the second largest health issue. “People often say, ‘Nothing stops a bullet like a job,’ and it’s true. When young people are working, they are not in the environment where things like drugs and violence can hurt them.” 

Boosting businesses and jobs beyond health care

Hiring isn’t the only way that academic medical institutions are boosting economic growth; they are also working to bolster local businesses. These efforts not only create additional jobs but also stimulate local spending. That’s key, since research suggests that, on average, 48% of each purchase at independent businesses is recirculated locally, compared to less than 14% of purchases at chain stores.

One large, recent effort is the Johns Hopkins University and Health System’s HopkinsLocal campaign. During fiscal year 2017, leaders committed to allocate more than 20% of their construction budget to minority-owned, women-owned, or disadvantaged businesses. They also hired more than 330 employees from economically distressed parts of the city and increased their spending among local enterprises by 23%. That worked out to an impressive $20.5 million in spending at local businesses.

In Cleveland, leaders are taking a different approach with the Evergreen Cooperatives formed by UH, the Cleveland Clinic, Case Western Reserve University, and the Cleveland Foundation. There, they are helping to grow the co-op’s three businesses: a laundry, greenhouse, and lighting company.

“The idea is to incubate small businesses that provide goods and services for our anchors and other private sector customers, creating quality jobs in distressed neighborhoods,” says John McMicken, Evergreen’s CEO. The group’s 250 employees become partial owners after a year and share in the co-op’s profits.

In addition to serving on its board, the anchor institutions have made significant cash investments in Evergreen, which didn’t generate profits until 2013. This year, the cooperative achieved its biggest success yet: adopting responsibility for all of the Cleveland Clinic’s laundry. “It’s taken us almost 10 years,” notes McMicken. “It’s one thing to say we can start a small business. It’s another to make sure the business can handle this tremendous contract, servicing it reliably 365 days a year.”

At Virginia Commonwealth University (VCU), a key focus is construction jobs. Local experts teach four-week construction classes at VCU that are overseen by REAL Life and CARITAS, two local nonprofits that help homeless and other vulnerable residents. VCU Health leaders have a long-standing relationship with CARITAS, where medical students run a free health clinic that's meant to provide care while also getting future physicians invested in the city.

“None of these people had construction experience, so we taught them basics — how to use hand tools, construction math, and safety precautions,” says Marilyn Milio, a CARITAS program manager. “It’s amazing to see what a good job can do for people,” she adds. “They can start to give back to the community.”

There’s no place like home

Anchor institutions have also recognized the need to ensure that neighborhoods have reliable, safe housing.

For example, Robert Wood Johnson University Hospital New Brunswick is collaborating with other organizations in New Brunswick, New Jersey, assessing and remediating homes that cause asthma, allergies, and lead poisoning. The group has already finished 25 homes and plans to complete repairs on 75 more within two years.

At Evergreen, the focus has been on helping employees secure homeownership loans. “How stable can your health or finances be if you have to move your family every few months?” McMicken asks. Mortgage payments are deducted from employees’ paychecks. So far, 22 people have purchased homes this way.

And at Rush, the system’s $6 million investment project includes loans to residential development efforts. One such project is Community Rebuild, which hires local construction companies to develop vacant land and restore run-down homes.

Even more important, Rush’s efforts are not acts of charity, says O’Neil. “These aren’t grants," she says. “They are loans, and we absolutely expect our money back,” although at a lower rate of return than Rush would otherwise receive in capital markets.

O’Neil looks forward to spearheading and inspiring additional efforts. “We know $6 million, which is about 2% of our portfolio, isn’t enough to change the west side of Chicago,” she acknowledges. “But we hope it will grow and that others will join us.”

Fair thinks they will. “Medical schools and teaching hospitals have always been committed to improving health and now they are leveraging previously untapped resources to expand their impact locally,” she says. “As they focus on economic stimulation, these institutions are approaching their roles as members of their community in new and transformative ways.”

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