Healthcare Anchor Network becomes independent not-for-profit organization

The Healthcare Anchor Network, a collective of more than 1,000 hospitals that encourages community-focused purchasing, hiring and investment, said Tuesday it has officially become an independent, 501(c)(3) not-for-profit organization.

Since its founding in 2017, the Washington, D.C.-based group had been a program within the not-for-profit research group The Democracy Collaborative. But leaders determined that HAN, which now has 70 health system members with more than $150 billion in assets that purchase over $75 billion annually, could stand on its own.

“This allows us to really ensure as we grow and take on new initiatives that the organization, which was formerly a program, is more responsive to the needs and priorities of its members,” HAN President David Zuckerman said.

HAN encourages its members to sign pledges with specific commitments around purchasing and investing in ways that benefit the communities they serve. Twelve members have agreed to boost their “impact purchasing” by $1 billion collectively over five years. Impact purchasing refers to buying from minority and women-owned businesses as well as local and employee-owned enterprises. Just over a dozen members have also signed HAN’s “place-based” investment commitment, which requires them to allocate at least 1% or $50 million, whichever is less, of their long-term reserves or unrestricted investment fund toward addressing community conditions that create racial, economic and environmental disparities.

HAN wants all of its members to make commitments around investing, supply purchasing and hiring, but also understands that health systems are at different places along that journey, Zuckerman said.

“We want the Healthcare Anchor Network to be inclusive of systems that are just getting started in this work and making commitments that look a little different than what we’ve articulated in our leadership commitments,” he said.

In 2019, HAN organized a campaign in which 14 of its members pledged to invest more than $700 million toward community-based initiatives to address economic and environmental drivers of health outcome disparities.

St. Louis-based SSM Health was among the health system members that contributed seed funding to help get HAN off the ground. The not-for-profit system has identified zip codes with high rates of poverty and has set goals to hire people who live in those areas, said Dr. Alex Garza, SSM’s chief community health officer. The system is also working to increase its local purchasing and is exploring the best way to invest in local businesses, he said.

The goal behind all of this is to think further upstream about health so that SSM is helping mitigate risk factors that affect people’s health, Garza said.

“You can’t do that if you’re merely thinking about the economics of it, by that I mean the monetary return on investment,” he said. “It’s a long-term return on your investment. But we know if we don’t get started now, we’re never going to end up with that healthy community without that investment on the front end.”

HAN collected just over $2 million in seed funding from a handful of health systems, which also includes Kaiser, Intermountain Healthcare, Trinity Health, CommonSpirit Health and ProMedica. The organization will still rely on grant dollars, but the health system contributions will help it get off the ground, Zuckerman said. Later this year, HAN will announce a new commitment around local hiring and workforce development, he said.

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Kaiser Permanente, a massive integrated health system based in Oakland, California, is further along in its progress on the purchasing and investment fronts. The system now spends over $2 billion annually on minority- and women-owned businesses and has $220 million invested under HAN’s place-based commitment, said John Vu, Kaiser’s vice president of strategy for community health. The investments are spread across a variety of initiatives, including affordable housing and neighborhood revitalization.

“We believe we must create good conditions for health,” Vu said. “That includes trying to contribute to good economic opportunities wherever we are.”

Intermountain has been a HAN member almost since the initiative’s inception. To date, the Salt Lake City-based health system has invested in more than 600 units of affordable housing, including a fund that makes housing affordable for teachers, health professionals and police officers, said Lisa Nichols, the system’s assistant vice president of community health.

“We all know that health is broader than just healthcare delivery,” Nichols said. “So to the extent that we can consider all of our assets when improving the health and wellbeing of our community, we’re really delivering on our mission in a much more comprehensive way.”

HAN asks all its members to submit annually data around hiring, purchasing and investing. It then posts the information to a members-only platform, where the health systems can view their progress against benchmarks, Zuckerman said. Eventually, he said the idea is to track year-over-year improvements and share the progress publicly.

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