Better Health Outcomes at Lower Costs is a Win That Everyone Can Get Behind

Antony Bugg-Levine and Daniel A. NissenbaumOctober 14, 20180 Comments

This op-ed originally appeared in The Hill.

In Boston’s Jamaica Plain neighborhood, investments spurred by federal tax credits are turning into windows and walls. Soon will come stoves, pots and pans; then lunches and dinners; then healthier people, fewer hospital visits, lower healthcare costs and jobs.

But for federal New Markets Tax Credits (NMTCs), this trailblazing “food as medicine” project — and many other important projects nationwide — may never happen.

It is high time for Congress to permanently fund the NMTC program.

Healthy Meals Lead to Better Health Outcomes

Since 1990, nonprofit Community Servings has delivered medically tailored meals (MTMs) to thousands of patients with critical and chronic illnesses, such as diabetes and heart disease. It’s also delivered to their dependents and caregivers, in Massachusetts. These meals have helped thousands of people stay healthier and at home. In the process, Community Servings has also trained hundreds of people who face barriers to employment for food-service careers; 89 percent of their graduates have moved from training into jobs.

Demand has been growing steadily — 40 percent over the last five years. That’s why our organizations have partnered (along with PNC Financial Services Group and the Property and Casualty Initiative) on a financing package that included $20 million of NMTCs to help Community Servings build a new 31,000-square-foot food campus.

Once it is up and running, the campus’ expanded kitchen and new three-story annex will allow Community Servings to triple annual production to 1.5 million MTMs feeding 5,500 people; almost double their training program and volunteer capacity; and open a food and health policy center to help replicate their model across the country.

It’s almost impossible to overstate the value of an initiative like this. According to the Agency for Healthcare Research and Quality, 86 percent of our country’s health-care spending is for patients with one or more chronic conditions. Healthcare providers, insurers and others increasingly recognize that providing healthy and nutritious meals can lead to better health outcomes and lower health-care costs.

Researchers found that participants in both Community Servings’ medically tailored meals program and a traditional, non-medically tailored home-delivered meals program experienced fewer emergency department visits and emergency transportation services, but only Community Servings clients had fewer inpatient admissions — resulting in a 16 percent net reduction in health-care costs.

Yet, programs that recognize the crucial role of social determinants (things like nutritious food and affordable housing) in driving better health outcomes are still more the exception than the rule.

The expansion of Community Servings would be unthinkable for many other community-based organizations working on tight budgets and with restrictive funding streams that make financing from traditional lenders inaccessible or unaffordable.

Even in these divisive times better health outcomes at lower costs is a win-win that all should be able to get behind.

Nonprofit Finance Fund and the Low Income Investment Fund are Community Development Financial Institutions (CDFIs) that exist specifically to fill this type of gap in community investment. CDFIs are mission-driven organizations committed to investing in high-impact projects that have both social and economic benefits.

The NMTC Program we used to invest in Community Servings is administered by the U.S. Treasury and was designed to attract private capital into distressed communities. With NMTCs, investors receive federal tax credits and nonprofits get access to financing that’s more flexible and affordable than they could get from traditional lenders.

NMTCs Provide an Impressive Financial and Social Return

The federal government gets an impressive financial and social return: Each NMTC dollar generates more than $8 of private investment, mostly in communities with low incomes and high unemployment.

Since 2003 NMTCs have helped protect or provide almost 750,000 jobs nationally. In Massachusetts alone, from 2003 to 2015, $1.9 billion of NMTCs leveraged an additional $950 million of investment and created nearly 35,000 jobs.

Despite almost two decades of success, the NMTC Program isn’t permanent. Its strong bipartisan support has led to a series of temporary reauthorizations and the latest expires next year. This Congress must do better by our communities.

Making NMTCs permanent will help spur more projects like Community Servings’ food campus by increasing investor confidence and providing nonprofits with more certainty to grow, innovate, and attract capital investment.

As the ranking Democrat on the tax committee in the House, Massachusetts Rep. Richard Neal (D-Mass.) joined Republican colleagues in introducing a bill to permanently authorize NMTCs.

Every member of Congress should co-sponsor this critical legislation. Even in these divisive times better health outcomes at lower costs is a win-win that all should be able to get behind. Just follow the dollars in Jamaica Plain to really see, as Community Servings puts it, “the astonishing power of food.”

Antony Bugg-Levine is the CEO of Nonprofit Finance Fund, which advances missions and social progress through financing, consulting, partnerships, and knowledge-sharing. Daniel A. Nissenbaum is the president and CEO of the Low Income Investment Fund, a national nonprofit community capital organization that has invested more than $2 billion to serve more than two million people.