During a period of increasing concern about widening economic inequality, the community development finance sector has grown to channel nearly $3 billion of capital to high-need communities in the United States. Health care in low-income communities is becoming an increasingly important focus of these investments, in part because of its outsized impact on the well-being of people living at or near the poverty line.
A new social impact loan fund’s arrival on the scene will further catalyze investment in high-performing health care for the hardest to serve. The lender, Vital Healthcare Capital (V-Cap), is uniquely focused on two critical challenges: (1) investing in better models of care for vulnerable people such as the frail elderly, people with disabilities, and at-risk children; and (2) investing in better models of employment for the growing ranks of frontline health workers, who are critical to improving the well-being and reducing the overall cost of care for people with complex needs.
V-Cap was launched in 2014 with support from the Robert Wood Johnson Foundation and a number of other funders, including the Ford Foundation and Rockefeller Foundation.
V-Cap has just announced a new $30 million fund for flexible loans to community clinics, mental and behavioral health providers, senior care providers, community hospitals, and special needs health plans to fund better models of care for people with complex needs.
For this new fund, V-Cap draws from a diverse group of the nation’s largest philanthropies and community-focused institutions to create a new financial partner for safety-net providers: Atlantic Philanthropies, Ford Foundation, JPMorgan Chase Foundation, MetLife, Dignity Health, and Bank of America. These traditional grantmakers and investors have banded together to make capital available to mission-driven providers during a period of rapid change in how health care is delivered and paid for.
This kind of financing model is needed because safety-net providers often have trouble accessing capital, making it hard to keep pace with the demands of a changing industry. The shift from fragmented to better integrated care demanded by the Affordable Care Act requires a range of investments, and V-Cap is opening a path for safety-net providers, which are underserved by banks and other traditional sources.
V-Cap will make flexible loans to a range of providers from federally qualified health centers (FQHCs) to mental health crisis centers to rural health networks in remote parts of the United States to help them grow and develop high-performing care models that are less fragmented, more coordinated, and more centered on the patient. These dollars will help these innovators invest in needed systems, technology, new services, and workforce development to meet new demands and effect enduring change.
V-Cap’s goal is to be a catalyst and to promote integrated care systems that improve health as well as develop high-quality jobs for frontline health care workers in low-income communities. According to recent research, frontline health care workers represent about half of the 18 million people employed in the U.S. health workforce. They include medical assistants, patient navigators, and community health workers. Despite an increase in demand, compensation for these positions has decreased over the past decade. That same report shows that frontline workers, on average, earn less than $40,000 annually and typically have less than a bachelor’s degree education.
V-Cap is providing an infusion of cash at the right time. Many of the health providers in their current pipeline are small, but all are fostering transformative change in health care delivery in their communities.
Bank of America sees this as an opportunity to support innovation in lending in a tumultuous sector such as health care that has a direct impact on the economy.
At the same time, this investment holds significance for a traditional grantmaker like Atlantic Philanthropies. It is one of that foundation’s last grants in the area of U.S. health equity. And, it provides a strong opportunity to address critical gaps in the existing health infrastructure while creating a way to catalyze lasting improvements well after Atlantic has closed its philanthropic doors.
A key aspect of the V-Cap model is its unique focus on supporting the creation and enhancement of frontline health care jobs. As care moves from institutional settings to community-based sites, we need to make sure good jobs in hospitals are not being replaced by undervalued jobs in the community. Community-based health care jobs such as health outreach workers, home health workers, and health navigators are growing job categories. But these jobs are often undercompensated, inadequately integrated into clinical teams, and not supported with skill and career development. V-Cap wants to see job growth, but it also wants to see job mobility—improvement in pay, skills, and careers—so frontline workers are valued for their contribution to advancing a better health care system.
The investment is innovative because it could address both the supply and demand side of the job and job quality challenge. V-Cap has the potential to increase the number of high-quality jobs in the health care sector and signal to other investors that creative approaches to improving jobs and promoting career mobility can be profitable. Finding ways to improve the skills of the current workforce has the potential to provide new models of career pathways for increasing the numbers of low-income, low-skilled workers employed in the health care sector, one of the fastest-growing and often the largest employer in the communities where they live.
At a time when we’re all looking for innovative models to improve health, lower costs, and boost economic vitality, V-Cap offers a model for bringing capital to the many great and inspiring organizations around the country that are working to improve the health and well-being of those who need it most. I look forward to watching the fund grow and seeing what we can learn along the way.
Kavita Patel is on the board of V-Cap. She also is on the editorial board of Health Affairs.
from Health Affairs Blog http://ift.tt/1m00RjI
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