Excerpt from an article that appeared on Oct. 13, 2019, Section BU, Page 1 of the New York Times, NY edition with the headline: A Steady Paycheck Is Good Medicine for Communities.
Forty-one nonprofit medical systems across the United States, plus four government providers, have formed the coalition, the Healthcare Anchor Network, with the mission of doing more business with local companies in the communities they serve. Most are concentrated in major American cities, from Chicago to Los Angeles. This coalition of nonprofit health care providers is investing in the notion that ample paychecks, stable housing and nutritious food are no less critical to well-being than doctors, medical equipment and pharmacies.
Excerpt from NYTimes, Oct 2019. A version of this article appears in print on Oct. 13, 2019, Section BU, Page 1 of the New York edition with the headline: A Steady Paycheck Is Good Medicine for Communities.
The American health network is part of a global movement through which activists are pressuring companies to target spending toward improving local fortunes, rather than contracting with distant corporations. Such initiatives are being driven by anger over the workings of global capitalism — how it has produced unprecedented riches for some while leaving hundreds of millions of people coping with economic insecurity.
Collectively, these systems spend more than $50 billion a year on a range of services — from construction to catering to laundry. Traditionally, they have directed much of that money to huge, national corporations that distribute their profits to shareholders around the world. The basic goal among the participants in the Healthcare Anchor Network is to shift their spending to local companies, keeping the wealth close by. Kaiser Permanente, which erected the new medical center near Baldwin Village, is one of the largest medical systems in the network.
The health systems are also directing their reserve funds toward so-called impact investments — loans to nonprofits that buy homes to spare low-income people from eviction; capital for minority-owned businesses; child care for the working poor.
This initiative was behind Kaiser’s decision to reserve a third of the construction jobs at its new campus for people who lived nearby. Among them were 70 former prison inmates employed as plumbers, carpenters and electricians.
“You have individuals building homes rather than doing home invasions,” says John Harriel, a former gang member turned tradesman who has helped Kaiser recruit previously incarcerated people at the construction site.
Backlash to Inequality
The idea that turned into the Healthcare Anchor Network began with a man named Ted Howard, who co-founded the Democracy Collaborative, an advocacy and research institution that experiments with fresh ways to attack economic inequality.
A decade ago, in the midst of the Great Recession, Mr. Howard used his hometown, Cleveland, as a laboratory for a new approach toward recovering from factory closings and joblessness. He started three cooperative companies in low-income neighborhoods, including a laundry service that gained a contract to wash linens at the Cleveland Clinic, a world-renowned health care provider.
The laundry hired people from surrounding communities. It won the contract on competitive terms, with an important guarantee: It paid workers better than rival national chains. It could deliver on that promise because it was a cooperative. It merely had to break even rather than enrich shareholders with dividends.
“These are businesses,” says Mr. Howard. Unless they produce returns, “you lose all the social benefits. We think it’s really important to open up the imagination to successful models.”
The approach is especially tailored to the United States, where efforts to increase support for government programs confront a strong American aversion to taxes. Rather than wring hands over the difficulty of prying money from Congress for social programs, he pressured deep-pocketed companies to spend, and invest, locally.
“Our epiphany is that one answer to the supposed scarcity of funds is that the money is right there in the community now,” says Mr. Howard. “It’s in institutions that are locked in place.”
His success in Cleveland has captured attention far beyond the American Rust Belt, sending Mr. Howard around the world to evangelize. He found adherents in northwest England, where political leaders in the city of Preston were wrestling with years of national austerity that had decimated local government services.
Drawing on Mr. Howard’s counsel, the city government, Lancashire County, the police department and a pair of local universities joined forces and directed their spending toward local companies.
“We had the double whammy of austerity, and also an economy that wasn’t working for people,” says Matthew Brown, the leader of the Preston Council. “We took inspiration from Ted.”
Beyond the Hospital Walls
In the United States, health care has become especially fertile ground for Mr. Howard’s approach, in part because of the passage of the Affordable Care Act, better known as Obamacare, which aimed to expand medical coverage to the tens of millions of people lacking access.
The program requires that nonprofit hospitals annually assess the health needs of their communities in a broad context — including job markets and the availability of affordable housing — while coming up with ways to improve local life. Given that 56 percent of community hospitals in the United States are nonprofit, this amounted to a significant potential alteration of American health care.
Kaiser, which operates nonprofit hospitals and provides health care for more than 12 million people, was already conducting such assessments under California regulations. Obamacare, passed nearly a decade ago, extended the obligation nationwide.
“It brought a discipline to the industry so that we all had to think about this,” says Bernard J. Tyson, Kaiser’s chief executive officer, during an interview at the company’s headquarters in Oakland. “It forced the industry to think outside its own box.”
The Democracy Collaborative convened the first participants in what would become the Healthcare Anchor Network in Washington in December 2016. In the years since, it has sought to coax medical companies to formalize and expand financial commitments that are now voluntary and vaguely defined — more like an accepted social compact than a firm obligation.
The logic is driven by large numbers: Hospitals and health care providers across the United States collectively spend more than $780 billion a year, control investment portfolios worth some $400 billion and employ more than 5.6 million people. Even a minor shift in how they manage their money, contract for services or hire workers will have an impact on the American economy.
“We encourage a pledge of 1 percent of assets as a starting point,” says David Zuckerman, the coordinator for the health care network. “This conversation is moving very fast and moving in a very powerful way. These institutions are just being exposed to this idea.”
Over the last two years, members have pledged more than $300 million toward local investments, with Kaiser alone promising two-thirds of those funds.
The company has taken its cue from volumes of literature attesting to the fact that poverty is lethal. People who experience homelessness have shorter life expectancies than the rest of the population. People without jobs do not eat as well as those who are fully employed. Financial stress can breed other ills, including substance abuse. Health care costs have risen so rapidly that many Americans fret about how to pay their bills.
“One in four Americans are having to make a choice between ‘Do I buy milk today?’ or ‘Do I pay my co-pay to get my prescription?’” says Bechara Choucair, Kaiser’s chief community health officer, citing a recent company survey.
For health care companies, improved community fortunes help the bottom line. More jobs mean more people in stable homes, lowering the cost of care when they need hospitalization. It means more people can afford medical plans, which spreads health care costs across larger populations.
That reasoning prompted Dignity Health, another health care provider that joined the anchor network, to deliver a $1 million loan to La Cocina, a San Francisco nonprofit that helps women of color start catering and restaurant businesses. Since its inception in 2005, the organization has produced 55 now self-sufficient businesses. Two of its graduates have been finalists for the prestigious James Beard Award.
La Cocina is using Dignity’s money to turn a shuttered post office in San Francisco’s Tenderloin district — an area rife with open-air drug sales — into a food court offering the dishes of program graduates. Geared to working poor people, the food court will provide a daily $5 special.
Among the chefs featured is Dilsa Lugo, a Mexican immigrant. Sixteen years ago, a pregnant Ms. Lugo carried a lunch of home-cooked tamales to the construction site where her husband was working. The property owner tried them, loved them and demanded to buy them. Ms. Lugo honed her skills in La Cocina’s commercial kitchen in the Mission District, where volunteers helped her secure funding.
“If I was by myself, I would have been afraid,” Ms. Lugo says. “I didn’t know how to start.”
Today, her Los Cilantros restaurant in Berkeley employs nine people. She earns more than her husband.
Dignity has also funded another local nonprofit, the Mission Economic Development Agency, which aims to blunt the displacement of low-income, predominantly Latino families. It has purchased 23 buildings in recent years, keeping existing tenants in place at subsidized rents, while maintaining fruit and vegetable merchants and bakeries in ground-floor commercial spaces.
“We’re looking for ways that we can address health care issues beyond the hospital walls,” says Pablo Bravo, Dignity’s vice president of community health.
Creating Local Jobs
This was the thinking as Kaiser Permanente began preparations for its new medical campus serving the neighborhoods of Crenshaw and Baldwin Hills in America’s second-largest city.
The need for the facility was obvious. The company’s closest hospital was a 25-minute drive away, before factoring in Los Angeles’s traffic. Many people in the neighborhood lacked cars. They relied on a patchy bus service that could take an hour to reach the facility.
But beyond the demand for doctors’ offices, a pharmacy and a laboratory, the community had other needs. Among the 278,000 area residents, 93 percent were black or Hispanic and nearly 30 percent were officially poor. A similar percentage had not completed high school. Former gang members languished in housing projects with no means of supporting themselves.
In 2015, Kaiser held meetings to ask residents what they wanted. Their testimony shaped the blueprint: The hospital would offer Wi-Fi and comfortable work spaces, enabling low-income residents to send out online job applications. The complex would include green space, exercise equipment and a farmers’ market.
But the primary demand was the most basic — paychecks. “The number-one thing people wanted was jobs,” recalls Jodie Lesh, who then oversaw Kaiser’s construction projects in Southern California.
Kaiser required its contractor to reserve 30 percent of all jobs for people living within five miles of the site. It set aside $24 million of the $90 million construction costs for women- and minority-owned businesses.
At first, Kaiser stumbled. It held a job fair, and hardly anyone came.
Then Ms. Lesh met John Harriel, an electrician and a conspicuous character known as Big John.
Raised in the neighborhood, Mr. Harriel, 49, was a former member of the Bloods and the son of a single mother bedeviled by addiction. He had spent more than five years in prison for dealing drugs. He used that time to gain his high school equivalency degree.
Once out, Mr. Harriel trained as an electrician apprentice and eventually rose to supervisor. He works with a community nonprofit, 2nd CALL (for Second Chance at Loving Life), which prepares former inmates for careers.
About 600,000 people are released from prison every year in the United States. The unemployment rate among formerly incarcerated people is about 27 percent, according to the Prison Policy Initiative, a research and advocacy group.
Mr. Harriel sees those numbers as indicators of hidden promise. People released from prison are so eager for a career, and so fearful they may never get the opportunity, that they will work harder than the next person to master a trade. Starting over means feeling special pressure to show up on time, do the job the right way and stay out of trouble, he said.
“The world is looking at us,” Mr. Harriel says. “You’d rather be two hours early than two minutes late.”
Still, employers are reluctant to hire convicted murderers, robbers and drug dealers, Mr. Harriel acknowledges. That is where he and his organization come in. They offer job training and courses in anger management, trauma counseling and financial literacy. They teach black and Latino former gang members to look their white supervisors in the eye — something that could provoke violence in prison. Those who sign up for training must complete it, and then demonstrate their skills and dedication, before he will provide a recommendation to an employer.
“If someone is screwing around,” he says, “I will be the first to say they should be fired.”
From Guns to Tape Measures
Physically imposing and blunt, Mr. Harriel is reflexively skeptical of outsiders’ promises to rescue his community. He is impatient with corporate-sponsored happy talk. As a child, he drew discipline at his elementary school for scoffing at the notion of Santa Claus.
“I said, ‘Let me get this straight,’” he recalls. “‘There’s this fat white guy riding around in the sky delivering presents down the chimney? I don’t see any chimneys in the projects.’ I said: ‘That’s a lie. You’re telling us a lie.’”
His neighborhood had suffered through more aborted promises of redevelopment schemes than he could recall. What was different this time?
Kaiser’s cluelessness about its job fair was not a hopeful sign. “They didn’t know where to go. They didn’t go inside the belly of the beast right there,” Mr. Harriel says, pointing to a cluster of apartments. “They went to the library. They went to some church. I said, ‘That’s not where the suspects hang out.’”
He went into gang communities and knocked on doors. At the next job fair, several hundred people descended. Dozens were hired, including Mr. Slay, the ex-Blood.
Mr. Slay grew up in South Central Los Angeles. His mother had died when he was 10, leaving him with his father, who cadged work as a mechanic. He wanted to join the Boy Scouts, he recalls, but he lacked the $16 fee. Jobs in the neighborhood were scarce, and good jobs nonexistent. People flipped burgers and bagged groceries, pursuits with no route out of poverty.
“The only people getting respect were the people coming out of the penitentiary,” Mr. Slay says.
By 14, he was living in itinerant hotels, smoking angel dust and robbing stores with the Bloods. By 21, he was behind bars for killing a man of the same age from a rival gang.
In prison, he attended a class about the impact of gang violence on victims and their families and listened to a woman who had seen her daughter raped.
“She was talking to us about forgiveness,” Mr. Slay says. “I had never seen compassion and forgiveness. My approach had been: ‘I’m in a gang. I got you before you got me.’”
He completed his high school equivalency degree and then studied sociology.
“I started thinking about the people that I robbed,” he says. “I started thinking about the magnitude of my actions. How did I go from a little boy that my mother loved to a man willing to take another man’s life? I started thinking about some of the things that I was lacking. I said, ‘If I ever get a chance to get home, I will relish it.’”
The chance came when he was 48 years old.
Back on the outside, he was euphoric at first. He moved in with his aunt and attended Alcoholics Anonymous. Then, grim realities took over. He applied to be a truck driver, but the conditions of his parole barred him from driving more than 50 miles from home. He got a job unloading ships at a port. It paid $9 an hour with no health care.
Then Mr. Slay met Big John, who saw him as a potential electrician. He finished life skills classes and was sent to a contractor as an apprentice, alternating seven weeks of work with a week of training.
Five years later, he is part of a crew handling the electrical work at a new stadium for the Los Angeles Rams football team.
He earns $39 an hour — enough to buy a car, help his 86-year-old aunt with rent, buy groceries and presents for his eight grandchildren. He pays for a health care policy from Kaiser.
”I’ve been through several lives within my time,” he says. “I feel like I’ve been around the world twice and it’s amazing that I’m a productive member of society, the backbone of my family.”
A version of this article appears in print on Oct. 13, 2019, Section BU, Page 1 of the New York edition with the headline: A Steady Paycheck Is Good Medicine for Communities.