Eyes on the Prize: When Innovation Meets Reality

Gulf Coast Housing Partnership
Grandparents playing with grandchild.

It’s easy to fall in love with an idea. Sustaining that loving relationship, however, is challenging when the idea collides with the inertia of reality. Our Health + Housing idea is exciting. It aims to collectively address significant housing and health inequities in the Gulf Coast communities we serve by understanding and facilitating the link between health and housing. We believe we can bring critical new forms of low-cost capital from health care payors to affordable housing creation through low-cost solutions that improve health care by addressing social determinants of health (SDoH).

As an affordable housing developer, GCHP is all too familiar with the financial challenges and funding gaps that exist in affordable housing creation. The basic economics of low regional income levels combine with relatively high construction costs to create an often insurmountable uphill battle to meet the need for quality housing. As a partner in the communities we serve, we are also aware of the significant health challenges that low-income populations face. By simply being born in Mississippi, a person will, on average, live a shorter life than if they were born in any other state in the country.

To stay true to our innovation’s vision, it has been critical to remember what we aim to accomplish. For our idea to be successful, it must:

  1. Create healthy affordable housing that would otherwise not have been possible.
  2. Improve health outcomes for the people who call that housing home.
  3. Break through the status quo and be scalable

We know from a growing body of SDoH research that low-cost interventions delivered through housing can lead to significant health improvements. It’s also clear that health care payors have an economic incentive to improve health outcomes for their beneficiaries. Those two concepts formed the basis of our Health + Housing idea. We set out to leverage an economic incentive for improved health into additional sources of critical low-cost gap financing to create affordable housing.

Our initial research and conversations with stakeholders and partners directed us to Medicare Managed Care Organizations (MCOs) as entities that would clearly have an aligned incentive to reduce health care costs for people with low incomes; the financial capacity to provide flexible and low-cost financing at scale; and the wherewithal to quantify that impact.

As we push our Breakthrough Challenge innovation forward, here are three challenges we’ve encountered and how we’re moving beyond them. 

Reframing to Reduce Resistance to Change

Affordable housing creation is hard. Our industry faces the inescapable reality that it costs more to create quality affordable housing than families with low incomes can afford to pay. We need subsidy – and, typically, multiple sources of subsidy – to make affordable homes happen. Although critical, subsidy intensifies capital stack complexity as well as creates additional design, construction and operating requirements for project managers, designers, builders and property managers. Our Health + Housing idea means additional complexity at almost every level – especially for pilot projects – which, not surprisingly, has faced some early friction from staff and partners at all levels.

To push through that friction, we’ve sought to ensure that partners and team members understand our goals and motivation from the outset. In every case, introducing those goals early and as clearly as possible has made it easier to get everyone on board. For example, in implementing FitWel building and construction standards, we have worked with multiple design professionals. When we added those requirements further along into the engagement rather than from the start, we faced more pushback.

Among staff and partners alike, we’ve also found that the root of resistance and hesitation usually lies with the fact that we’re introducing new or unfamiliar concepts – and not because the additional requirements create additional burden. To address this resistance, it’s been helpful to frame our approach through the lens of what we’ve done in the past. Although we haven’t built affordable housing to FitWel’s healthy building standards, we have built dozens of developments that meet Enterprise Green Communities™, Builders Challenge, LEED and other green building standards.

Similarly, we haven’t operated housing serving a specific group of health care payor beneficiaries, but we have regularly operated housing targeted for veterans, people who have been homeless, people with disabilities and other resident populations. And while we haven’t received restricted loans from health insurance companies that flow through to transactions, we have received restricted loans from foundations, corporations and financial institutions that do just that.

Rather than completely re-inventing the wheel – and facing the resistance that goes along with that – we’ve learned to reframe our Health + Housing innovation so that it builds upon our existing core competencies.

Understanding and Tapping into Our Partners’ Core Competencies

When we lack core competencies to build upon, we are learning to lean on the right partners. That entails getting the right people to the table and asking the right questions. The answer has often been closer than we realized. For example, as we conceptualized our approach to Health + Housing, we knew that data linkages between health insurance payors and on-site clinics would be critical – both for the interventions themselves and demonstrating impact.

Before we had health insurance companies fully on board, we explored software and began to think through some of the complex privacy issues we would need to address. When we eventually got the right data and medical professionals involved at the health insurance company and health clinic levels, we discovered that much of the interconnectivity already existed. Had we continued our own siloed approach, we would have wasted critical resources that would have been better served building and expanding our own core competencies. 

End Goal vs. How (We Think) We Will Get There

We were confident from our research that community-based health interventions promise a significant health impact by addressing SDoH through housing. We were also confident that those improvements would have a financial impact on health care payors by reducing health care costs for their beneficiaries. The examples were clear – and they still are.

However, a recent conversation with a partner at a large health insurance company we have been working with for over two years, gave us pause. Now that the company is receiving data on new work related to improving health outcomes through their SDoH focus, they are finding costs can often fail to decrease – in fact, they can increase as more people use the available services. Admittedly, our initial reaction as one of alarm. We had built a model on – and put a significant amount of effort into – the expectation that Health + Housing could save health care costs. If that foundational component was not true, what were we doing?

Putting our fears to rest, our health insurance partner explained that a rise in health care costs due to increased services utilization was not a primary concern. From their perspective, while it would be helpful to reduce costs, their core focus is improving health. And improved health still has positive financial impacts for insurers because as reimbursement rates go up, they can win and maintain state contracts, and they can operate a more predictable and competitive business.

While we fully expect that Health + Housing can provide quantifiable, long-term health care cost savings, our overarching goals are to improve health outcomes and leverage new sources of low-cost financing to provide more quality homes for people with low incomes. Lowering health care costs is the primary avenue through which we conceptualized meeting those goals. If we can get there taking another route, our approach will still be a success.

Getting there will take meeting the challenge of adapting and re-adapting our idea as it confronts all the nuances of reality. We’re up for it.