CREJ

April 2021 — Health Care & Senior Housing Quarterly — Page 9 www.crej.com HEALTH CARE — INVESTMENT MARKET T he COVID-19 pandemic has incentivized innovative and effective health care solutions – and also highlighted that investing in health care can be rewarding from a social contribution and financial return perspective. A particular type of investment known as an “impact investment” has been gaining traction over recent years and has garnered additional interest from investors throughout the pandemic. Impact investments, according to the Global Impact Investors Network, are “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.” Impact investments have grown rapidly in recent years – as of 2018, Global Impact Investors Network esti- mated $228 billion in impact invest- ing assets had roughly doubled from the prior year. In 2019, Blackstone, one of the world’s leading investment firms, announced the launch of a new impact investing platform as part of the firm’s strategic partners group. As of late 2020, the Forum for Sustainable and Responsible Investment found that $17.1 trillion, or 1 in 3 dollars, of the total assets under professional management in the U.S. used sustain- able investing strategies (representing a 42% increase from 2018). In other words – a third of all assets under management in the U.S now take social and sustainability issues into consideration. Impact investments show that what is good for health and society also can be good for business performance. In response to the COVID-19 pan- demic, Global Impact Investors Net- work launched the Response, Recovery, and Resilience Investment Coali- tion (R3 Coalition), funded by many prominent founda- tions, including the Ford Foundation, John D. and Cath- erine T. MacArthur Foundation, andThe Rockefeller Founda- tion. R3 Coalition aims to streamline impact investing efforts that will address the social and economic consequences of COVID-19. The R3 Coalition seeks to close finan- cial gaps and direct additional dollars into investment opportunities starting with health care, including produc- tion/manufacturing of personal pro- tective equipment, telemedicine, vac- cine and diagnostics, as well as food insecurity or security issues due to the disruption of the global supply chain. n Social determinants of health. Cer- tain experts have discovered that social determinants of health – the conditions in which people are born, live and age that affect one’s quality of life and life expectancy – have a great- er influence on health outcomes than medical care.With an increased focus on value-based care, more health care providers recognize that social determinants of health play a signifi- cant role in health outcomes. Impact investors and health care organiza- tions alike should be considering their abilities to leverage health care assets, including real estate assets, to address social determinants of health rather than focusing solely on improving provision of medi- cal services to their patients. n Housing. One of the most common investments made by impact investors and health systems to address social determinants of health is affordable housing. Hous- ing insecurity and health outcomes have been shown to be directly related. As such, hospitals and health systems have offered programs for temporary, transitional housing for those experiencing homelessness, which have led to fewer emergency department visits, shorter hospital stays and fewer missed appointments. Moreover, because a lack of stable housing can lead to chronic disease, injury and poor mental health, provid- ing an opportunity for those in need to obtain quality housing can directly benefit the physical and mental health of such patients. According to the Center for Outcomes Research and Education, affordable housing has been found to decrease overall health care expenditures by 12% for Medic- aid recipients, with a 18% decrease in costly emergency department visits and a 20% increase in less costly pri- mary care services. Investment in affordable hous- ing can effectively reduce uninsured and underinsured visits in hospitals, resulting in cost savings to provid- ers and payors while also increasing health outcomes among the most vulnerable. n Transportation. Another investment that has proven beneficial in tack- ling social determinants of health is transportation. Because transportation strategies typically are easier to imple- ment and cost less than affordable housing, numerous health systems and private equity investors have been partnering with companies such as Lyft and Uber to remove transporta- tion as a barrier to receiving health care services. For example, Uber has partnered with Cerner, a health information technology company, to allow health care providers to easily schedule nonurgent transportation for patients, caregivers and staff. MedStar Health, a member of the Cerner net- work, has seen an increase in patient visits since implementing a transpor- tation plan. In fact, MedStar Health has seen as much as 5 to 10 percent- age points in some practices, leading to increased revenue. Health insurance companies are starting to cover ride- sharing services as they identify the financial benefits and improved health outcomes for their beneficiaries. As a result of these various efforts, access to health care has improved and rev- enues have increased, all while capital investment costs have remained low. Food security, employment and edu- cation are other social determinants of health attracting investors who seek to realize financial gain and address the social and economic consequences of COVID-19 and beyond. s lpark@hallrender.com rlarkin@hallrender.com Impact investing and social determinants of health Libby Park Attorney, Hall Render Rene Larkin Attorney, Hall Render