A Health Insurer and a CDC Collaborate to Move the Needle on Housing and Health

David Adame of Chicanos Por La Causa, and Joe Guadio of UnitedHealthcare talk about the value of addressing social determinants and the lessons they’ve learned.

Joe Guadio, CEO of UnitedHealthcare’s Community Plan of Arizona, and David Adame, president and CEO of Chicanos Por La Causa (CPLC), are pioneers in the health care/housing collaboration.

Ten years ago, the idea of the social determinants of health was fairly familiar in the health care sector, though less understood was how addressing the need for things like safe and affordable housing, job creation, and food security would directly impact the industry. In the community development world, there wasn’t much awareness that the work being done to help communities was also deeply tied to health.

Now, there are hundreds of health and housing partnerships at various stages across the country, and while the work is still in its infancy, it’s far enough along that both sectors are looking for information about how the partnerships start, develop, and grow beyond initial projects.

David Adame, president and CEO of Chicanos Por La Causa (CPLC), and Joe Guadio, CEO of UnitedHealthcare’s Community Plan of Arizona, are pioneers in this kind of collaboration. In 2016 UnitedHealthCare loaned CPLC $22 million to acquire and rehabilitate 500-units in Phoenix. Eighty percent of the units are rented at market rate, and the returns from those apartments subsidize the other 20 percent, which are be available to low-income residents who are heavy health care users.

We spoke with Adame and Guadio to drill down into how their projects came about, where they’re going, and the lessons they’ve learned over the years of collaboration.

Harold Simon: How did you come to the realization that housing is a health care issue?

Joe Guadio: For UnitedHealthcare and, quite honestly, for the rest of the industry, more and more research started to come out around the value of social determinants—40 percent of health care costs are driven by social determinants; 80 percent of heath outcomes are driven by social determinants plus lifestyle choices. That was really kind of the watershed moment as this research came out and was supporting, with evidence, the value of addressing social determinants and why we should be addressing social determinants, with the understanding that there have been organizations, CPLC being one of them, that have been doing this [work] for years.

CPLC and UnitedHealthcare [have] had a relationship in the past, and CPLC came forward to us around a potential housing proposal. And that’s really what set the wheels in motion, thinking differently for a payer or a health insurance company, and directly engaging and providing a very innovative solution around housing. But we weren’t going to do this with anybody. We loaned about $22 million [from] our regulated capital [to CPLC]. It’s a very unique and innovative way to use regulated capital. The reality is there are lots of [housing] developers out there, but you don’t just choose anyone with this.

The whole point here was it was putting additional workforce housing units out on the market, and setting a portion of those units aside for UnitedHealthcare to specifically place our homeless members. It was important for us to partner with an organization that had a successful track record, that knew what [it was] doing, that understood the value of trauma-informed care, [and] that understood the Housing-First model. CPLC was clearly the organization that we were going to partner with, based on their track record.

David, you’ve known health is an important issue for a long time. How did this idea come about?

David Adame: We’re always looking [at] how we maintain relevancy in all the work that we do. And we’re one of the unique organizations that [is] involved in health care directly. We’re involved in education, in economic development, and clearly, we’re involved in housing.

When we learned a new fancy [term], “social determinants,” we always called it “wraparound services” because we knew that, in order to help people become self-sufficient, we had to provide them with other resources and capacity.

And so, as we started working with Joe and his team, we said let’s sit down and have a Whiteboard Session. Let’s figure out the challenges and issues you’re dealing with, what are ours, what are our strengths, what are your strengths, and how we come up with something that not only helps us serve our community better, [but also] make this sustainable. The last thing we wanted to do was to create a model that, if the grant money goes away, the program goes away.

Because at the end of the day, this is what it’s about. It is about changing lives. It is about putting people on that path to self-sufficiency.

How do we find an investment, not a donation, that incentivizes everybody for this to be successful? So when we finished our Whiteboard Session and went to work developing strategies, we said we want cross-sector housing because there’s been plenty of research on different social determinants and how they can impact health care costs or health care outcomes. We know that housing is clearly one of the top ones. That’s how we came up with the model. And then, as we started developing the program, [we thought] well maybe we can use some of this regulated capital. Maybe we can use some of the other resources, [like] UnitedHealthcare’s My Community Connect model, which was digging deeper into this and providing health care navigators and other components.

So, we worked together on a clinic [in 2016] that we had in Phoenix that we were already developing as an organization and said let’s partner and put the My Community Connect brand on it. Let’s leverage each other’s resources, and then look at housing that’s within a few miles of this particular area. There was strategy behind it. We looked [at where] United had a large component of Medicaid patients, and where [it had a] large component of [their] commercial plan. That’s where Maryvale, which is a [suburb] in the Phoenix greater area, became a good target.

The Residences at Camelback West is walking distance to The Palms. Together the two apartment communities have 500 units for health care users.
The Residences at Camelback West is walking distance to The Palms. Together the two apartment communities have 500 units. Photo courtesy of Chicanos Por La Causa

One of the things we did initially was we had a 400-plus unit apartment complex that we were already managing, and we said let’s do an address check on that particular property. We discovered that we had 90 patients in UnitedHealthcare’s rolls. So we knew this was the right spot. Joe went to the state and got approval for [the $22 million investment] and structured it as a loan to simplify it. And we were able to buy 500 units between two properties.

And the way the model works is 20 percent of the units are set aside for UnitedHealthcare. The other 80 percent are rented to whatever the market will bear in the area. You have the rest of the property being leased to the market, which then can be used to cross-subsidize all the other work that we want to do. UnitedHealthcare navigators [can tell] us this person [lives] in a food desert so they’re not getting the proper nutrition, or they need help getting some capacity so they can be gainfully employed, and hopefully get off of Medicaid and be in a commercial plan with UnitedHealthcare. On average, we subsidize about 50 percent of the rent on the 20 percent of the units that are set aside. And we rotate those. We work with the patient. We move them up the continuum, because the goal is that they be self-sufficient so they are gainfully employed, so that they are getting on a commercial plan, so that we can use the unit for another person. And if they want to stay in the community, they can move into one of the other 80 percent of units. But if not, we have other units that we can move them into, or they can just move wherever they want.

We’ve been doing this for the last couple years, and it’s been a successful model. Joe’s team has been able to monetize how much we’ve been able to make impact on, most importantly, the outcomes of these patients. We can show that when we add the new variables to the math formula on return investment, you can monetize the cost savings on this thing.

Are the buildings self-sufficient? Is that cross-subsidization working?

Adame: Absolutely. And it allows us to not only repay the loan, which was our goal, [but we’re also] benefiting from a good market. We take existing properties that are probably C, maybe C-minus grade level [and] clean them up and make them look like B, B-plus. The city loves us, the police love us, our neighbors love us because we take properties that are challenges in a number of ways, not only from their appearance and street appeal, but from the resident make-up. [There’s] some bad news in there, to put it lightly. We clean that up.

[In] one property, the police department would not go there without backup. The number of calls per month was incredible. Now, it’s rare that they get any [calls to go there]. So the benefits to the environment, to the community, [and] to the residents is priceless.

That’s what’s so great about this. It’s not just our ultimate goal, which is the most important—the health care outcomes for these residents—but it’s all the other things that are social determinants. Living in a property that’s safe and doesn’t have drug dealers in it, and all those types of things [show the] impact that this program makes. So, when [folks are] in one of our units, in one of our communities, they have a full menu of other services and a network of other nonprofits that we work with, and that UnitedHealthcare works with, that can work as cross-referrals.

We have a food bank that comes in and provides food boxes to some of the residents [who] may need that, special food boxes for diabetic residents. There’s just so many benefits [to] this.

Joe, so many of our readers are just beginning these kinds of projects. Other than their track record, what gave you comfort in rolling the dice with CPLC?

Guadio: Right off the bat, we had a strong comfort level with CPLC. They have experience and they know what they’re doing in this housing space, but there were several other factors involved. First and foremost, CPLC’s mission aligns with our mission, which is to help people live healthier lives and help make the health system work better for everyone. Mission alignment is very important to us. [So are] cultural values, and ours are integrity, compassion, relationships, innovation, and performance. We had alignment there.

[Next] would be leadership. Take a look at their body of work—not just their track record in housing—and all their multiple pillars of business. You’ve got small business loans; you’ve got early childhood education; [it’s] a very sophisticated and disciplined organization, but it takes leadership and talent to run an organization of that nature. And by that, I mean the key businesses that CPLC is involved with and how they translate those businesses into meeting the needs of the underserved.

Chicanos Por La Causa’s staff understand the model of trauma-informed care, understanding that the individuals they house and the individuals that we’re going to house are homeless. [These individuals] have been heavily impacted by trauma in their lives, early childhood trauma, and that has an impact on their future health outcomes and their future length of life.

And when you have that type of understanding, it’s a different way of approaching individuals. It’s a different way of understanding who you have as a tenant and how you’re going to engage with those members.

And CPLC is also very much aligned with and understands the Housing First model, because when we place a homeless individual into those set-aside units, you’re not just placing an individual in a unit and think you’ve solved homelessness. Those individuals will be back on the street within two weeks. It’s all the support services you put around them. It’s how you engage those members using the principles of trauma-informed care and the Housing First model, [which is] built on identification, stabilization of the homeless individuals, goal setting, goal achievement, and ultimately transition.

Because at the end of the day, this is what it’s about. It is about changing lives. It is about putting people on that path to self-sufficiency.  And it’s about partnering with an organization that understands those principles, and CPLC understands those principles. We just wouldn’t have chosen anybody for this.

And if you think about the model, wrapping all these support services around the individuals that we place in the homeless units—helping them navigate the health care system, connecting them with primary care, providing them transportation, ensuring that their other social needs are met, connecting them with other social services—that’s all part of this equation to improve quality and improve health outcomes.

To date, we’ve [placed] roughly 40 members over the two-plus year period where we began housing members in the two properties. They came to us through a referral from one of our community partners, and/or we engaged them through one of our own case managers. We placed them in a unit more than likely at 100 percent subsidy, and then worked with them through that Housing First model, through job assistance training, the Dress for Success program, getting them the things that they need to be successful, building trust, to the point where we get them at 50 percent subsidy, and then, ultimately, zero subsidy, meaning they are gainfully employed. They’re [now] paying full rent.

We’ve seen emergency department visits reduce considerably. We’ve seen inpatient rates reduce considerably, which is what we’d expect to see. In the aggregate, we’re looking at health care costs being reduced by over 50 percent when you compare their cost pre-housing versus post-housing.

But it’s not just all reduction in health care costs. It’s the quality improvements that go along with it. It’s the changing lives and improved health outcomes that also go along with it.

It’s just proof that doing the right thing is not only the right thing to do, but it also saves money.

Guadio: And there’s a third leg to that stool—besides doing the right thing, besides seeing a business case, is that improved quality of life for these individuals, that self-sustaining type of notion, as well as improved health outcomes.

One of the challenges that community development organizations have had is how to describe the successes of their work. Working in this space, are you talking about your work and its outcomes differently than you were 10 or 15 years ago?

Adame: Absolutely. We’ve had to really move the needle on evidence-based promotion. We provide real value as a community development corporation.; we’re not this poor chicken-dinner-type of organization. We’re a real value to our partners.

When people ask me, “Well, David, how can I help you, how can I help your organization, how can I help the community? ” [the] first thing out of my mouth is let’s sit down and figure out how we can help you achieve your goals while simultaneously [addressing this] three-legged stool. Because it’s a sustainable model. It’s a model that’s not a handout, it’s a hand up, even for us as an organization and for our community, because our strategy is [to] tell people we’ll help you with whatever we have, but you have to do your part.

Is this something the field should be thinking about, how to do the work but also how to talk about the work?

Adame: Yes. We have to change how we talk about the work and our attitude of how we’re trying to advance. Our mission is we drive economic and political empowerment. So we have to be able to say, OK, how are we going to do that? And we need to be able to align ourselves to say we’re a key component of the market. We can bring value to other things.

So even with this discussion with Joe, we have other discussions on [things like] transportation. We know that transportation is a key social determinant. How can we come up with something that’s a value proposition in that area? We’re already working with them on job assistance. We have some direct job assistance programs that we operate. We have the community college system that we’re working with that we need to think about in a different way that is not a zero-sum game, that we need to bring our other nonprofit brothers and sisters, or community development corporations [into], and then bring real value to the table to these corporations so that they understand that we have certain strength and skills.

Not all of them understand real estate, property management, and workforce development. There’s some that have other specialties. But depending on who they’re talking to and the potential partner, they could bring some real value to the table.

We have to come up with a business case that says we can help you achieve [your vision]. Before we even start, [I say] help me understand what you’re trying to do so I can see if there’s a mutually beneficial partnership that can be formed. And we have to do the analysis and the Whiteboard Session and find the pony, if you will. Today, [with a] $100 million budget, give or take, we generate a little over half of it through these types of models and through other fee-for-service models that we do.

And our goal is to get over 75 percent. More and more, nonprofits and community development corporations have to go toward that. And that’s why we get visitors from around the world—the most recent one was from Germany—to [ask us about our] self-sufficiency model. More and more people around the world understand that you have to change your strategy and your approach on how you as a community development corporation can really achieve your vision of impacting people’s lives in a positive way.

How did the discussion develop around confidentiality, data collection, and analysis?

Guadio: We can have a Whiteboard Session, and we can have a general business conversation around what direction we need to go, but before we start getting into real in-depth negotiations—and if that involves sharing of data, or future sharing of data— we will sign a nondisclosure agreement. And that protects both sides. That’s where we start in any types of situations like this.

Once you’ve gotten that, how about HIPAA regulations? How do you share data in a way that doesn’t get hit by regulatory bat?

Guadio: We’ve got experts [who] are well attuned to HIPAA regulations. And just because you sign a nondisclosure doesn’t mean that you’ve got free rein to share HIPAA information. You don’t. We are very cognizant of any type of data that is shared between the two organizations. We need to make sure that we are HIPAA compliant. And both organizations understand that.

Adame: Yes. We’ve been in the behavior health side and we’re CARF accredited. We have the experience. We’ve been there. We go through audits every year or so. We have internal counsel. We do everything to make sure that we have our compliance and our checks and balances in place [and we are] compliant to HIPAA and any other regulations that we may fall under based on the program that we’re working with.

We take it very seriously when it comes to that. And I’m very proud that we’ve never had any issues when it comes to HIPAA compliance.

What advice would you give to others beginning or considering this work? And what would you encourage other CBOs, insurers, or other key players to consider before taking the first steps?

Guadio: Put a lot of discipline around who you are choosing as a partner, and that’s on either side. Mission needs to align. Values need to align. And that goes above and beyond that the organizations have proven track records in their respective spaces. That’s first and foremost.

Because this is a different and innovative way of looking at it, it’s important that both sides understand the individuals that you’re looking to house and address, because, again, it’s not just housing. It’s understanding who you’re going to be putting in those units. And if you’ve got a developer, a managing company, or a property management company that doesn’t understand that, it will be very challenging from that point forward.

Adame: If you don’t have experience in either real estate management or trauma-informed care, whether it’s behavior health or primary care, it’s critical that you work with CBOs that have experience in both, because we actually had our property managements, for example, go through a special training certification on supportive care property management.

But we wanted to make sure they understood [everything from] the HIPAA stuff to understanding how you deal [and manage] residents who may be coming in from a homeless situation because the issues do come up. But how you manage that is critical.

Our partnership makes it look easier than it is. But it has its challenges, resident issues to real estate issues. All those things happen, but you have to make sure that you’re prepared and have a strong CBO not only financially, but just strong from the leadership side, that knows how to navigate and knows how to be resourceful, has a network of other nonprofits that they trust.

There’s a saying in Spanish, “Who you hang with tells you who you are.” You have to be very careful because you don’t want to say, OK, resident, we found out that now you need whatever service and we’re going to send you to this group. You’ve got to make sure that group is going to follow up and provide the quality of care that Joe alluded to. It’s not just, OK, here’s a number, go do it. We’re going to make sure you get there. We’re going to make sure you follow up. If a patient has to pick up a prescription, well, Joe’s team can tell you whether they went to even pick up the prescription.

And so, how do you work with that resident. [Do they] need help getting to that prescription. Do [they] need somebody to help [them] take it? All those little nuances that make the biggest difference. Sometimes they may be the small things, but those are critical components of the partnership that you have to be able to trust each other, work hand-in-hand with each other to make sure that you’re getting the change in the quality of life and the change in the health care outcomes.

As a CBO, you don’t want to look at it as development fees to be made and a real estate transaction. No, you have to go into it because you know what the goal is. It’s just as important to us that these patients are successful as it is to UnitedHealthcare. And yes, the business case is there, but the most important case to us is that the quality outcomes and the quality of life are changed in a positive way.

Guadio: If you look at it from the CBO side, it’s having that understanding of health care in general, and actually even a little more than in general. CPLC is a provider on the behavioral health side, so [it] understands those principles of trauma-informed care, et cetera.

On the health insurance side, or what we call the payer side, it’s having that understanding of social determinants of health and the value of addressing social determinants of health. If you’re not there, then you shouldn’t be getting into this space, even if on a pilot basis.

No. 2, you need to understand housing, and that goes beyond just real estate. We’re talking about how housing is financed. We’re talking about workforce housing versus permanent supportive housing and the various funding mechanisms, the nuances, and how the economics work. You have to have that expertise in-house as a payer. Obviously, an organization like CPLC, they certainly have that expertise. That’s part of what they do. But as a payer, or the insurance company on this side, you either have to have that expertise in-house, go outside and hire the right consultant, or teach yourself. But either way, you need to have a reasonable understanding of how workforce housing, affordable housing, the various funding components, and wrap around services work together.

UnitedHealthcare is committed to a range of programs and partnerships, things that address pieces of the social determinants of health. They’re not all housing. Can you talk about how you work with organizations that are not as robust as CPLC?

Guadio: The space for health insurers is moving rapidly in this direction. And as a result, these are very complex issues. Transportation is a very challenging social determinant to solve. Now, in the Medicaid space, we do provide non-emergent medical transportation to medical offices, to pick up your prescription, things of that nature. What we’re talking about is transportation to the grocery store, transportation to a job interview, or even work itself. These are very complex issues that need to be addressed.

And as a result, we are piloting multiple types of models because I don’t think anybody has the answer right now. And quite honestly, there’s probably two or three within each social determinant. What are those two or three? How do you intertwine everything? How do we make it into an impactful network, an impactful ecosystem that’s all moving in tandem and we’re leveraging appropriate dollars? Because all the social determinants are interdependent. We focused on housing initially, because housing is health. Your health outcomes are more determined by your ZIP code than your genetic code. And it’s the key to moving forward in addressing the other social determinants, as well, but we have to identify what those other models are.

Right now, we are in discussions with St. Mary’s Food Bank here in the Phoenix area. They are the largest food bank serving central and northern Arizona. What more can we be doing in there?

Food insecurity is a critical social determinant; again, a challenging one to address. Where is the funding going to come from? How do you get fresh fruits and vegetables to individuals? Because that’s really part of the challenge right now—underserved areas, food deserts, they don’t have access to fresh fruits and vegetables.

In Arizona, we provided funding to the Food Bank Association, and with that funding, they put two refrigerated tractor-trailers out in the community. And these tractor-trailers are going to southern Arizona, Yuma, and Nogales, where you have a lot of agriculture, and they are taking fresh produce from those areas, either excess donated fresh produce, or in some cases they’re actually purchasing, and then bringing them back into areas where they can be distributed. But you need a refrigerated truck in order to do that.

So, yes, we have been working on multiple different initiatives, with multiple partners, even different types of housing models, to help us identify two or three models that make the most sense, who are those partners that can engage in this space, and how do we pull it all together in an integrated, efficient manner.

Public policy is remarkable in how much social good it can do, or hurt. Can you talk to me about your role in advocacy?

Guadio: Advocacy and building those business cases for policy change, to increase access and increase coverage, and addressing those social determinants of health, that is part of the end game. But you’ve got states with varying degrees of what they will provide funding for, or the levels of funding, per se. But to get there, you need organizations that are willing to make investments. How are you going to get there? You either need the business community to step up to make these investments, to do these pilots, knowing that they believe in the value of addressing social determinants of health, that a business case is there, and that health outcomes are going to be improved.

The other piece would be philanthropy. Those are going to be the two big areas where you’ll get funding today so that we can be doing the right thing, improving health outcomes down the line, and also advocating for appropriate policy change and so forth. But to do it, you need the business community and the community-based organizations to really step up and be willing to make those investments, identifying those partners, and partnering accordingly.

And so, that’s the role that we are playing today. We are taking that risk. We are making that investment. The housing that we provide, it’s a non-covered benefit right now by members, but we have the business. We believe in the business case. We believe in the value that we’re bringing to the community. We believe that there will be future health outcomes that will be impacted positively, and we’re willing to make that investment. That’s what it takes right now, is business organizations willing to step up, take the risk, make those investments. But as I mentioned earlier, you have to have the right partners to do it. That’s the first part of advocacy.

Then, after that, it’s building the business case. It’s getting with the right community leaders and so forth, and then advocating accordingly. That depends on the state and where they’re at.

Adame: Whether we’re trying to add new codes to bill for food deficiency or behavior health coverage, or whatever else, can we show evidence that what we’re doing is actually saving all stakeholders, whether it’s the taxpayers, with HHS or anything else, then it strengthens the advocacy to say, OK, CMS, you should consider additional coding for whatever the list is, because we’ve got evidence-based success here that says it’s a great investment.

And then, partnering with a private sector company like UnitedHealthcare, we strengthen the advocacy efforts because we can show evidence-based results [highlighting why] there should be more funding for housing, or there should be additional coding that’s eligible for billing in Medicaid and Medicare. We strengthen each other because we can help each other’s efforts.

So if I go into a community, and they say, “oh man, a nonprofit’s come in here,” you get the NIMBY issues. I’d say, “well, look, this is a private sector model. I’ve got a big corporation like UnitedHealthcare coming in with me.” It dilutes the stereotype. Now, they see it and they say, “wow, this model where a nonprofit and for-profit came in and changed the total dynamic of this community, this apartment complex, now we don’t have drug dealers here, it’s a beautiful thing to pass by now.” Those are those priceless things that I was alluding to earlier, whether it comes to advocacy or zoning issues or funding issues, that just makes us much stronger.

Thank you.

The logo for Citi Community DevelopmentEditor’s Note: We thank Citi Community Development for their financial support and for respecting our complete editorial independence. 

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