Seeking Financing for Population Health? Here Are 5 Resolutions for the New Year
Financing population health—the act of rewiring financial flows in a community to transform its health—can seem like a “pie in the sky” pursuit. Sure, many community collaboratives are securing enough grants for projects that improve health on a micro-level. But it’s no secret that grants are not intended to be truly transformative on their own. Grants are excellent kickstarters for communities to launch big ideas off the ground, but they are not typically a standardized, routine source of income for the long-term.
So how will we take concrete steps forward? How can we ensure our efforts aren’t merely geared toward fundraising, but also toward sustainable financing? It’s a nascent field, and we certainly don’t have all the answers. But our ReThink Health Sustainable Financing Team has learned a lot by working with communities and others who have been taking innovative first steps. For those who are ready to take on the complex work of figuring out how to get started, we suggest five resolutions for 2017.
Resolution 1. Believe sustainable financing can be done. Then, look again at what you’ve already got.
Collaboratives can assert that “there’s just no money to do anything.” Or they can acknowledge that there is money, and folks are just not willing to spend it on population health (yet!). Although the latter sounds a little bit like an accusation, it can also be seen as a statement of faith. If there is no money, or no means of getting any, then we might as well stop believing that financing is possible. But if we’re just spending money in other places, then we must know we could use our (actually abundant) resources differently. And from that recognition comes possibility.
Take a good look at your assets. Now look closer. Ask yourself what’s possible. What do you have in your community—in your own organization, in your collaborative, or in your geographic area—that could be used differently?
The Moapa River Indian Reservation in Nevada did this, and found that their abundance—land—is something that the federal government and corporations need to advance green energy. Partnering with First Solar, the tribe stands to earn millions of dollars in leasing fees for use of the land, in addition to fees for providing sand and gravel for the project. There will be jobs, too. And this partnership is right in line with their value of protecting the earth.
Resolution 2. Recognize your backbone organization’s value. Then, act on the notion that value has worth.
The backbone organization coordinates the various dimensions and stakeholders involved in your collaborative, and is therefore the most likely candidate to lead the process of financing population health in your community. But most can’t get to that work, as they are focused on raising the funds they need to operate at a basic level. If Backbones are providing value, they ought to be paid for it.
At the Michigan Health Improvement Alliance (MiHIA), every stakeholder who regularly comes to the table pays a membership fee that is determined on a sliding scale by size. They understand that the Backbone helps them to further advance their own organizations and missions by providing the space and leadership for development of cross-sector partnerships and information sharing.
And the Commonwealth of Massachusetts finds backbones so important that the Department of Public Health divided the state into 27 Community Health Network Areas, each with the potential to operate like a backbone. To finance them, the Department ensures (under the DoN or Determination of Need statute) that five percent of health care facilities’ planned capital expenditures go to Community Health Initiatives.
This aspect of the DoN statute has been in place since the early 1990s, and is currently being reconfigured because it has proven to be imbalanced. Construction happens more in urban areas than in rural ones, for example. But the state’s essential value in arranging this financing is clear: community members ought to be a part of determining whether new projects will truly benefit them, and ought to have funds to fill any needed gaps that the projects will not address. The backbone plays a major role in making that happen.
Resolution 3. Imagine your barriers aren’t actually barriers. Then, find the work around.
Collaboratives can work around rules. When someone tells you a financing idea can’t be done, that shouldn’t end the conversation. This is an opportunity to open a creative conversation about under what conditions it could be done.
In 2006, the Consumer Federation of America found that “38% of those with incomes below $25,000 think that winning the lottery represents the most practical way for them to accumulate several hundred thousand dollars.” This prompted researchers involved with the Doorways to Dreams Fund and the Filene Research Institute to seek out a creative way to provide the excitement of winning alongside a scalable opportunity for financially constrained households to increase their frequency of saving in order to build wealth.
They quickly learned that federal and state laws were not in place allowing banks to have prize-motivated saving programs. But no one said anything about credit unions! Partnering with the Michigan Credit Union League & Affiliate in 2009, they developed a Save to Win product for members throughout the state. For every $25 deposited, members earn a chance (limited to 10 per month) to win both a $100,000 grand prize jackpot and a host of smaller, monthly prizes.
In the course of 11 months, over 11,500 Michigan residents saved more than $8.5 million in Save to Win accounts (and $115 million since). What’s more, because of these efforts in Michigan, and subsequent success in other states, federal law now allows prize-linked saving programs. Fifteen states have passed legislation as well, opening up access to an estimated 78 million individuals.
Resolution 4. Embrace financing as a journey. Then, navigate it!
Financing is not a task to be done and checked off the list. Instead, it requires collaboratives to commit to a journey, where many twists and bends are expected along the way. Navigating this journey will require leading with strong values, making smart choices, confronting fears, continuously innovating, and persisting over the long haul. What journey will you choose to start this year?
Last April, Chobani CEO Hamdi Ulukaya made headlines for distributing shares of the yogurt company to its 2,000 employees as part of “a mutual promise to share purpose and responsibility.” The average value of the shares is roughly $150,000, and the company is valued between $3 and $5 billion. But Chobani was no overnight sensation. Ten years ago, Ulukaya borrowed $800,000 to buy a defunct yogurt plant. He hired five employees. Two years later, he began making Greek yogurt, spurring a new competitive phase in the yogurt market.
Finding great success, Ulukaya and his team chose to spend nearly half a billion dollars to build the largest yogurt processing plant in the world, a one-million-square-foot facility in Idaho. But its production and food safety operations hadn’t kept pace. Chobani needed a $750,000 million bailout loan to bring its operations into order, and tensions quickly emerged between Ulukaya and the lender about the future direction of Chobani. But Ulukaya persisted past these and other struggles. Today–in part due to Chobani’s successful new product lines–those original five employees will receive stock that may be valued at over $1 million.
Resolution 5. Stop seeing financing choices as a burden. Then, welcome them as a privilege.
Financing is fundamentally about choices. Just look at all of the examples included in the previous four resolutions! Each of these choices involves actors embracing a mindset that choices always exist (even when they aren’t immediately obvious) and that they must be made (even if we wished our choices were less limited). Do you think Chobani wanted a bailout? No! That Doorways to Dreams wanted a federal law at the outset? Yes!
It’s a privilege to be in a position to make choices. They are hard sometimes, but your perspective in addressing the difficulty is critically important. Chobani chose to see the privilege of finding a way forward (Ulukaya could have ran for the hills in fear of the situation), and this paved the way to billions! And Doorways to Dreams had the privilege of finding another means to advancing prize-linked savings, showing federal and state governments a new way forward.
Likewise, collaboratives and their members have the privilege to make decisions that affect the lives of people in their communities. It’s time to embrace the opportunity to make financing choices that reflect the trust being given to you. My colleague Stacy Becker, director of sustainable financing at ReThink Health, will delve further into this topic here on the ReThinkers’ Blog next #FinanceFriday!
When your collaborative is ready to commit to financing in addition to fundraising, and making some of these resolutions, you’ll find that many possible ways forward start to come to light. What resolutions are you inspired to work on in 2017? Have you embraced any of these resolutions already, with any success or challenges? What is your community collaborative working on to finance population health?