Supporting healthy communities How rethinking the funding approach can break down silos and promote health and health equity

Article Sections

As health care shifts toward treating people before they get sick, community partners and government agencies are becoming involved, aiming to address social factors such as education and housing. More players, though, means more complications, particularly in funding. One possible solution: a hub model.

Introduction: Moving from sick care to health care

As the political debates over the future of American health insurance continue, the health care system is slowly shifting from a fee-for-service model to one that places more financial risk and responsibility on insurers, providers, and states. At the same time, policymakers and practitioners increasingly recognize that the social determinants of health—including income, education, and housing conditions—often have a greater impact on health than does medical care.1

These developments suggest that it is critical for the country to move from a system of sick care, in which we treat patients after they fall ill, to one of health care, in which we help people stay healthy in the first place.

This goes far beyond a change in semantics or mind-set: Meeting this demand will require a fundamental shift in the way state and local governments and other community partners interact. Instead of operating in silos that create structural and cultural barriers to care, medical and community services will need to work together to coordinate care and services for the most vulnerable people in our population.

In fact, we see cross-sector coordination as key to tomorrow’s health care system functioning—and we recognize the challenge for organizations unaccustomed to collaborating. In this article, we offer an approach to address a particularly challenging aspect of coordination—that of coordinating funds. Our proposed Healthy Communities Funding Hub model builds upon a series of convening sessions and reports launched by the nonprofit Trust for America’s Health (TFAH) to define policies aimed at improving community health and health equity.

A number of health care organizations and government programs—both state and federal—have already taken steps toward more coordinated care, launching pilots to test new delivery and payment models. The goal: better results in the areas of cost, care, and population health. One such model is the Accountable Health Communities model developed by the Center for Medicare and Medicaid Innovation; see sidebar, “Better care through screening, referring, and coordinating.”

Better care through screening, referring, and coordinating

The Center for Medicare and Medicaid Innovation’s Accountable Health Communities model aims to address the gap between clinical care and community services by testing whether systematically identifying and addressing beneficiaries’ health-related social needs improves health outcomes, quality of care, and costs.2 The model includes screening beneficiaries to identify unmet health-related social needs, referring and providing navigation services to beneficiaries to improve access to community services, and encouraging alignment between clinical and community partners by investing in advisory boards, data, gap analysis, and improvement strategies.

Meanwhile, communities across the country are innovating to coordinate funding from traditionally separate and categorical funding streams at the local level, including health care, public health, and social services funding. These locally based models represent new, sustainable ways to effectively direct funds to improve community health, and supporting their growth can help public and private funders maximize their impact on health outcomes and costs. Local structures can bring together traditionally siloed sectors and funding streams to identify community needs and shared priorities, manage a coordinated effort toward achieving shared outcomes, and provide financial management and accountability to the community and funders.

While these efforts indicate progress toward more coordinated, community-based health improvement, barriers still exist to scaling these models and ensuring their sustainability:

  • Nationwide, there is inadequate leadership capacity and a lack of sustainable funding mechanisms for health improvement efforts.
  • Current funding processes fragment the distribution of resources, discourage the coordination of funds, and limit the ability to jointly address common risk and protective factors.
  • Health care, public health, social services, and other sectors function and are funded in silos, with different funding requirements and often-incompatible data collection and information systems. These silos make it difficult to coordinate efforts, integrate data, and assess shared impact across sectors.3
  • Although investments in one sector can affect outcomes and generate cost savings in another, individual sectors generally consider only their own investments and benefits—“the wrong pocket problem.”4
  • The multiple sectors that affect health—driven by a variety of stakeholder and interest groups—have different cultures, values, and vocabularies and generally lack experience working together. Such differences can impede partnership and collaboration.

The Healthy Communities Funding Hub model proposes a place-based “hub” where many of these barriers can be addressed.

The Healthy Communities Funding Hub model

Looking to define policies to improve the health and health equity of communities, Trust for America’s Health convened a series of policy discussions that informed development of the hub model. One of the key challenges that emerged from TFAH’s work was the lack of sustainable financing mechanisms that support holistic community-level efforts to improve health and health equity. While there is a growing recognition of the impact of nonclinical factors on health outcomes, efforts to address social determinants are seen as—and funded—separate from health care.5 And while the trend toward value-based payment holds promise for incentivizing investment in prevention,6 the delivery mechanisms are not yet in place to fully realize this potential. There remains a yawning gap between knowing what people need to be healthy and delivering what they need to become and stay healthy.

To explore how to better coordinate and sustain funding for community health improvement, TFAH and Monitor Deloitte conducted a series of expert interviews and workshops in the summer of 2016. The aim: to identify ways to leverage the growing focus on social determinants of health and increase in value-based incentive structures to move toward a system that supports health both inside and beyond the doctor’s office. In-person and telephone interviews tapped the knowledge of more than 75 experts from a variety of backgrounds, including leaders from the White House, the Centers for Medicare and Medicaid Services, the US Department of Health and Human Services and other federal agencies, state and local health agencies, private health insurance plans, the community development sector, and innovative local efforts. Additionally, 40 practitioners, representing multiple sectors, participated in four workshops, providing in-depth input on the model’s design and practical implications.

The result—the Healthy Communities Funding Hub model—offers a way to bridge a gap in many communities where there is no existing infrastructure for sustainably funding multi-sector (and multi-funding-stream) efforts to improve health.

What would such hubs look like? They would be place-based organizations bringing together funding from federal, state, local, and philanthropic sources across the many sectors that affect health. Each hub would serve as a trusted intermediary and formal financial manager, equipped with the necessary financial capacities to coordinate health improvement funds, and be a single point of financial accountability to stakeholders.

In serving as a financial manager, a Healthy Communities Funding Hub could be the same entity as the lead partner within a local health improvement partnership (the integrator, backbone, intermediary, or quarterback) or could be a separate financial manager that works closely with the lead partner. It should also have the capacity to identify, apply for, and coordinate various funding streams to ensure sustainability.7 The appropriate entity(s) to assume this role will depend on the community’s needs and assets, the lead organization’s capacity, and the willingness of the community and other local organizations to entrust the lead organization with the fiduciary role. In some communities, there may be models with multiple leads working together to fulfill this fiduciary role. (See sidebar, “Taking the lead.”)

Taking the lead

Any local health improvement initiative will need a lead partner to play a convening role and take broad strategic responsibility for the partnership and initiative. The integrator might be an already-established community institution, health organization, social service agency, or philanthropy. In some areas, major institutions such as hospitals and universities—as recognized community leaders, employers, and economic drivers—may have a strong vested interest in serving as a lead or major partner.

Key functions would include a range of responsibilities: bringing partners together to develop, implement, and invest in strategic planning, goal setting, and needs assessments; overseeing program implementation; managing and integrating funding from diverse sources and programs; analyzing shared impact; and ensuring accountability and continuous quality improvement.

A hub’s core roles and functions

At its core, a Healthy Communities Funding Hub would play a straightforward role: bringing together funding from various sources and coordinating spending to best address community health needs and goals. To that end, the hub would manage funds and reporting, allowing community-based organizations to focus more time on serving their populations. A financial manager would bring these fiduciary capabilities to local health improvement efforts, aiming to ease the financial complexity inherent in cross-sector work. (See figure 1.)

How a hub operates

Among its key functions, a Healthy Communities Funding Hub would:

  • Provide fiduciary oversight and management to coordinate multiple funding sources. A hub would need to have the capacity to meet multiple funders’ accounting and accountability requirements, as well as the skills and credibility to engender trust across a range of public and private sector funders.
  • Identify and leverage funding sources that are not typically coordinated (such as nontraditional, innovative funding streams from community development and other sectors). A hub would develop strategies for securing public and private funding from a range of funders across various sectors, such as:
    • Federal, state, and local governments, including grant programs
    • The health care system, including public and private providers and insurers, hospitals, and community benefit investments
    • Social services, including housing, anti-hunger, domestic violence, and other sectors such as agriculture, transportation and/or environmental agencies/ community organizations
    • Businesses
    • Philanthropic organizations
    • Social impact financing mechanisms
  • Govern the prioritization of spending on evidence-based interventions to ensure accountability to the target community. Entrusted with funders’ investments, a hub would have a responsibility to manage partners in order to achieve the funders’ goals. It would need to have mechanisms in place to govern the prioritization of spending to ensure that the multi-sector coalition is accountable to its community.
  • Serve as a trusted fiscal intermediary between sectors that affect health that have different missions, cultures, and ways of operating—and that likely lack experience working together. The Healthy Communities Funding Hub would help bridge the gap between these sectors, creating accountability for the use of funds, translating the different “languages” of health care and community-based organizations, connecting interests and investments to the proper activities on the ground through targeted funding, and catalyzing shared experience and successes.

In many localities, Healthy Communities Funding Hub-like organizations may already exist (see sidebar “How it works in Baltimore”), and a range of public or private community entities could play the role of a hub, including (but not limited to) local nonprofits, hospitals, community health centers, community foundations, Community Development Financial Institutions, community development corporations, public health departments, local management boards, and local health and human services departments.

How it works in Baltimore

Family League of Baltimore, launched in 1991, is a local management board with an ambitious goal: “By 2030, all children in Baltimore will be born healthy, succeed in school, graduate high school and transition into higher education and the workforce.” Family League manages funds from about 40 different sources, with some 93 percent of this funding from government sources.

In turn, Family League funds a variety of community organizations: 80 percent of its money is distributed to other organizations in the form of direct grants, 10 percent is used to provide technical assistance/coaching and other support, and 10 percent goes toward administrative costs. Family League focuses on strengthening organizations, leading collaboration, and influencing systems across a number of projects focused on health and education.8

Policymakers, community leaders, and health and social service providers could consider piloting a Healthy Communities Funding Hub model as part of the suite of evolving delivery and financing models. Lessons learned from these initial efforts could be used to inform further development and refinement of the hub model. Lessons learned from other approaches to improve community health through place-based efforts, such as California’s Building Healthy Communities initiative, should also be taken into account. (See sidebar “At the community level.”)

At the community level

Building Healthy Communities is a 10-year, $1 billion program of nonprofit foundation The CA Endowment, aimed at helping 14 low-income communities across California improve the health of their population by developing social, political, and economic power in those communities: building collaborative relationships, harnessing private-sector investment, and addressing social determinants of health.

The program’s recent five-year report9 outlines some key lessons learned relevant to leaders looking to implement the Healthy Communities Funding Hub model as part of their local health improvement initiatives:

  • A rigid and prescriptive planning process is unlikely to be successful; effective planning requires directly engaging the community and allowing community leaders and residents to set goals and strategy and flex their civic and political power to effect health-promoting systems change.
  • Intermediary organizations often serve many roles in the community and likely have responsibilities beyond their duties as an intermediary. To reduce confusion, it is helpful to separate intermediary and other functions into different entities or clarify roles and responsibilities in other ways.
  • History, context, relationship, and trust at the local level play a key role in what is possible, and in some communities, a single centralized entity or process for community health may not be a realizable or desirable goal. It is important to customize community health improvement models to meet local realities.

Expert interviewees and workshop participants identified two other important components of the proposed Healthy Communities Funding Hub model:

Certification: The hub model is a mechanism to help locally based organizations identify, secure, and coordinate funding streams. Certification could help establish this model’s credibility, bestow benefits to hubs, and could be structured to be adaptable to meet the needs of different communities.

Involvement from the health care system: To fully realize the hub model’s potential to improve health and reduce costs by coordinating funds to invest in prevention and nonclinical services, participation from the health care sector is critical, given the sector’s size and scope and its central role in service provision. Securing insurers’ and providers’ participation will require structures and incentives that make it easy for the health care system to participate and invest in hubs.

Making the hub a trusted entity

Accountability is a critical component of coordinated funding. Stakeholders—in particular, funders—need assurances that their funds will be spent with integrity and properly accounted for. Certification could be helpful to build this accountability for Healthy Communities Funding Hubs. Experts participating in our review process suggested that certifying hubs10 could help establish baseline criteria and capabilities and would support local health improvement by helping to ensure that funds are used for designated purposes. Certification would signal to funders that the hub is a dependable mechanism through which they can channel their investments to achieve outcomes. This gives local communities the ability to focus on partnerships, performance, and delivering outcomes.

Certification serves as a signal, communicating an entity’s legitimacy and accountability. Expert interviewees and workshop participants identified key benefits of a Healthy Communities Funding Hub certification process: generating credibility and transparency, establishing accountability, creating standardized criteria and a uniform level of rigor, reassuring funders about the integrity of coordinated funds, providing a gateway to flexibility in exchange for demonstrated results, and facilitating a shift from reporting on compliance to reporting on outcomes.

To foster this credibility and reassure funders, potential certification criteria should be designed to gauge two attributes. First, an organization’s ability to receive and monitor integrated or coordinated funds. Second, an organization’s accountability to the communities it serves. Potential certification criteria for Healthy Communities Funding Hubs could include:

  • A defined mission of advancing community health and wellness that aligns with identified community priorities, or a partnership with an organization with this mission
  • Support from community stakeholders, such as funders, community organizations, and political leaders
  • Incorporation as a legal entity, allowing them to enter into agreements and contracts, incur and pay debts, and be responsible for actions
  • Demonstrated ability to meet fiscal accountability standards, including the capacity to manage funds from multiple funders, monitor and track funds, and audit and evaluate activities
  • Capacity and mechanisms for ensuring transparency to the community it serves and to funders

Workshop participants also suggested that there could be additional designations or “badges” for organizations that meet more advanced criteria, such as for strong data integration capabilities (including legal safeguards) and for the use of evidence-based practices.

In return for certification that provides funders and partners the confidence that a Healthy Communities Funding Hub will be able to navigate the community’s health landscape, the hub could receive flexibilities that allow it to more efficiently fund efforts to address the community’s health priorities. Interviewees and workshop participants identified key benefits that could accrue over time to certified hubs with proven track records for management and improved outcomes. These benefits include increased flexibilities and reduced bureaucracy in return for demonstrating outcomes, similar to the flexibilities provided by the Performance Partnership Pilots; see sidebar “Connected funding for disconnected youth.”

These flexibilities11 could include:

  • access to funding streams via uniform, simplified processes
  • greater latitude in coordinating funds and reporting
  • eligibility to apply for consolidated funds
  • preferences for funds
  • waivers to fund and report on evidence-based practices
  • ability to retain and reinvest savings
  • access to grants and supports from a Healthy Communities Funding Hub Fund, a new fund that would provide certified entities with funding and technical assistance

Connected funding for disconnected youth

The Performance Partnership Pilots for Disconnected Youth allow grantees to blend discretionary funds from the US Departments of Education, Housing and Urban Development, Justice, Labor, and Health and Human Services, along with the Corporation for National and Community Service and the Institute of Museum and Library Sciences, to implement outcome-based strategies for serving disconnected youth.12

Flexibilities for distributing, using, and reporting on funds are built into the program: Federal agencies may waive the program rules and requirements associated with individual programs contributing funds to make it easier for grantees to implement a youth-centric strategy.13

There are a few options for designing certification criteria and selecting the organization to manage certification. The certifying body could be positioned in the federal government or the appropriate state government agency; alternatively, it could be operated by a consortium of experts and affiliated entities that help provide similar certifications, such as the Association of Government Accountants. There would also need to be designated funding—through the government and/or a set of engaged stakeholders—to support the certification process.

Putting the “health” in hubs

A Healthy Communities Funding Hub could provide the greatest impact by working with a variety of sectors, engaging the right stakeholders, and garnering the appropriate funds for a multi-sector approach. The experts participating in our review process emphasized that fully realizing the hub model’s potential to improve community health by coordinating funds would require the health care sector’s participation. Given a hub’s focus on improving health, the sector would, by definition, play a critical role in enabling that hub to fund a comprehensive suite of services, supports, and system changes.

With market pressures mounting to improve population health and bring down costs, insurers and providers are increasingly looking for ways to achieve better outcomes, which are often driven by investments and conditions outside the clinical setting. The shift toward value-based care incentivizes the health care sector to invest in prevention and health determinants outside of the clinical sphere, which may motivate involvement with hubs.

In most communities, there are already organizations, systems, and infrastructure that address social determinants and prevention. A Healthy Communities Funding Hub could help health care providers and plans navigate and invest in these structures and initiatives (as opposed to duplicating existing community resources by creating new systems and infrastructure). Indeed, a hub can serve as a trusted partner for insurers and providers to work with and through as they look to invest outside of the traditional clinical realm. Expert interviewees and workshop participants identified key benefits that could result from health care participation in the hub model:

  • The health care sector would be able to direct dollars to evidence-based or evidence-informed interventions that improve community health. The hub (or the integrator) could perform the legwork of identifying the appropriate interventions and provide funds to the community partners most effective at delivering the desired services or outcomes. In this way, the hub would serve as an honest broker allowing health care organizations to “buy” services and supports that lead to improved health outcomes.
  • The hub would aim to bridge the gap between community and health care organizations, serving as an intermediary able to speak the “language” of both health care and community organizations and to build trust between these sectors. As a certified fiduciary manager, the hub could “translate” the dollars spent on community programs and interventions into the outcomes important to health care organizations.
  • Health care organizations could bring important assets to the hub model, contributing to the development of robust community needs assessments, informing planning to achieve health outcomes, and providing technical and financial resources.

Interviews and workshop participants also noted important limits on health care’s role in the Healthy Communities Funding Hub model:

  • Health care would not pay for everything the hub supports, nor should any other individual sector. A key strength of the hub model is its ability to bring in funds from multiple sources and sectors to support comprehensive efforts. A hub would leverage funding from public health and other sectors to maximize the impact of health care dollars and support strategies and programs that health care entities cannot or are not incentivized to fund.

Funding hub example: Comprehensive fall prevention

Consider how, for example, a Healthy Communities Funding Hub could fund a comprehensive fall prevention program. Health care funds could be used to provide specific patients with vitamin D supplements and physical therapy services to address physical imbalances that can lead to or aggravate a fall. The hub could coordinate funds from Medicaid, the Administration on Aging, the Department of Housing and Urban Development, the Centers for Disease Control and Prevention, and funds from private sources, such as philanthropy, to provide home modifications, support exercise programs for the elderly, and support an education and awareness campaign. The ability to coordinate dollars allows a hub to provide a holistic, coordinated, and accessible set of programs and services.

The upshot: Health care insurers and providers will be motivated to work with hubs if they have a financial incentive to do so and can trust the results. And with the continued move to value-based payment and managed care, those incentives are mounting.

In addition to insurance coverage and reimbursement (including leveraging flexibility in managed care), health care institutions can invest in social determinants and prevention with nonprofit hospital community benefit funds and by using “anchor institution” strategies to catalyze changes in social determinants of health and improve local economies—for example, by purchasing, hiring, and investing locally.14

For health care to fully engage with and benefit from a hub, there should be greater recognition and action at the federal, state, and local levels in support of health care investments in social determinants and prevention, including providing clarification on nonclinical services that currently qualify for reimbursement and providing greater flexibility and changing statutory restrictions, where appropriate. For example, the Healthy Communities Funding Hub model would benefit from an expansion of waiver authority that allows state Medicaid funds to flow to hubs for health-related social interventions.15 Additionally, there could be a federally designated set of evidence-based and cost-effective interventions for which health care coverage is automatically approved.

Looking ahead

While the Healthy Communities Funding Hub model holds much potential for scaling the practice of coordinating funds across sectors for purposes of community health improvement, there are a number of factors that must be considered and addressed for the model to succeed, including:

  • Federal and state government agencies operate in siloes, often with walls guarded by administrators and advocates concerned about protecting funding for their particular program. Yet solutions to issues often involve working across sectors. Leaders need to demonstrate the political will to work across sectors—and construct mechanisms to coordinate different programs and funding streams.
  • The hub model may raise concerns about “blending” of funds and the potential creation of block grants. While block grants may in theory support cross-sector ventures, in practice, they have often resulted in cuts to funding, diminished political advocacy to prevent funding streams from being discontinued, and unintended limitations on service provision—since there is only one set of requirements, if a particular need cannot be covered by funds under that set of requirements, there is no other stream with different requirements to tap. Given these concerns, the hub model focuses on coordinating funds (maintaining separate and distinguishable funding and financing streams) rather than pooling funds.
  • Coordinating funds within a broken system will only take us so far. Underlying systemic changes are needed to support collective impact efforts, align outcomes, and measure results across sectors. Yet making these changes will require overcoming a number of challenges. Funders need to agree upon shared outcomes and, where possible, link funding and financing to these shared outcomes; this also requires agreeing upon common outcome measures. Stakeholders have different time horizons and risk tolerances with respect to seeing outcomes and return on investment, which can make coordinating funds challenging. Measuring—and even more so, capturing—the social value of community health initiatives is extremely difficult. More funding is needed for cross-sector research, and there is a need to address barriers to accessing the data to identify and measure cross-sector impacts.
  • Local organizations are often unaware of the variety of funding sources that can be braided in support of community health initiatives.
  • Moving to a multi-sector approach requires political will from community leaders to invest in the initial infrastructure and to continually engage in public policy processes to sustain change over the long term.

Leaders across sectors show increasing interest in addressing these concerns and advancing meaningful coordination to improve community health. Based on our series of expert interviews and workshops, we conclude that the Healthy Communities Funding Hub model would provide valuable infrastructure to coordinate funding streams in communities and strategically channel these resources into the community to implement and sustain health improvement efforts.

Key areas for further exploration include:

  • Determining the precise financial capabilities and skills that hubs need to successfully solicit, coordinate, and manage funds.
  • Identifying strategies to ensure meaningful engagement of and accountability to the community and funders.
  • Identifying benefits and flexibilities that could be granted to certified hubs.
  • Determining what changes are needed in payment and delivery systems to motivate health care insurers and providers to engage with hubs.
  • Establishing key actions that the federal government, funders, and others could take to establish, pilot test, and modify the hub model.