Hospital-backed housing brings positive social return on investment: Health Affairs

Hospital Administration

Dive Brief:

  • A hospital-sponsored affordable housing program targeting social determinants of health in Baltimore is having a positive social impact on the community, according to a study published Monday in Health Affairs.
  • Rather than quantifying traditional return on investment, Health Affairs researchers used a social-return-on-investment (SROI) analysis to evaluate broader social, environmental and economic benefits of Bon Secours Hospital’s Housing for Health program.
  • They found the program generated between $1.30 and $1.92 of social return in the community for every dollar in yearly operating costs.

Dive Insight:

In the 1990s, Bon Secours Hospital saw an opportunity to purchase, repurpose and develop affordable housing units in its surrounding community with a high concentration of poverty, amid rising rates in vacant homes.

In 2019, it owned 801 units of affordable housing at 12 properties across West Baltimore, serving low-income individuals, families, people with disabilities and seniors.

The Housing for Health program is part of a larger movement from providers attempting to address social determinants of health – recognizing that a person’s circumstances can impact their health outcomes.

That’s become increasingly apparent with the COVID-19 pandemic, which has claimed a disproportionate amount of lives from Black, Hispanic and Native American communities, according to data from the Centers for Disease Control and Prevention.

Social determinants also affect health care spending, and new payment models are increasingly putting health systems at risk financially for the outcomes of their patient populations.

Previous analyses attempting to quantify the impact of such programs focused on traditional return on investment, comparing profits with capital invested. In this study, Health Affairs researchers attempted to quantify the community benefit.

Researchers used a “triple bottom line” approach to assess the effects of Bon Secours housing program on the local economy, environment and people.

They found it generated a significant social value in the community in 2018, ranging from $1.30 to $1.92 per year for every dollar of annual operating expense, according to the report.

Bon Secours’ operating expenses for maintenance, utilities, staffing and other services were $5.7 million in 2018, and offset by rent, according to the report. The community hospital, part of the larger Bon Secours Mercy Health System, has annual operating revenues of $121 million.

The holistic approach of SROI makes it a useful framework for quantifying the value for money spent on programs, particularly those that are difficult to measure through traditional methods,” researchers wrote.

One limitation though is that the study did not include the initial costs of purchasing or renovating the units, which were estimated at $107 million at the period of purchase, not accounting for inflation.

But the expenses were largely paid through a range of mechanisms such as the sale of Low-Income Housing Tax Credit equity and city loans, the report said.

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