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Building Health: Why Insurers are Investing in Affordable Housing

Can a billion-dollar investment transform health outcomes for thousands?

It seems so, according to UnitedHealth Group.

UHG has just reached a significant milestone, surpassing $1 billion in affordable housing investments. This story may sound familiar, as I previously discussed insurers’ investment in affordable housing a couple of years ago.

In this article, I’ll highlight UnitedHealth Group’s housing investment milestone, explore what other insurers are doing in the affordable housing space, and share my perspective on why such investments are imperative for fostering healthy populations.

The Deets: UnitedHealth Group’s Housing Investments

UnitedHealth Group has invested over $1 billion in affordable housing, creating 25,000 homes across dozens of states over the past decade. These investments have been made through low-income housing tax credits, social impact investments, and the Community Reinvestment Act.

UHG focuses on affordable housing for two reasons:

  1. Access to affordable housing is inequitable: UHG's investments are part of their broader commitment to health equity, ensuring that all individuals have the opportunity to live their healthiest lives. Housing inequities are pervasive, disproportionately impacting low-income Black families.

  2. Housing is a determinant of health: stable, affordable housing is crucial for improving health outcomes. Unstable housing can lead to stress, poor mental health, and limited access to essential services. Note how this can turn into a vicious cycle.

UHG's portfolio includes mixed-income properties, affordable housing developments, and supportive housing initiatives. These projects span urban, suburban, and rural settings and cater to families, seniors, and military veterans across 31 states and Washington, D.C. Additionally, many of these housing developments include on-site or near-site health and social services to improve residents' overall well-being.

UHG’s largest investment in affordable housing started in 2020, when they partnered with the Stewards of Affordable Housing for the Future and the National Affordable Housing Trust, committing over $200 million to the Health & Housing Fund. This fund supports affordable rental homes and grants funding key social services and programs. These include technology lending programs, food pantries, nutrition education, resident service coordinators, and resident-led fitness and wellness programs.

UHG boasts improvements in key healthcare metrics since investing in the Health & Housing Fund. Over a two-year period, UHG reports the following of their Health & Housing Fund residents:

  • Established Relationship with Healthcare Provider: Residents were more likely to have an established relationship with a healthcare provider compared to U.S.-wide populations at similar income levels. Seniors: 96% of residents vs. 95% of U.S. seniors. Working-age adults: 85% of residents vs. 71% of U.S. working-age adults.

  • Routine Check-Ups: Residents were more likely to have had a routine check-up in the past year compared to U.S.-wide populations at similar income levels. Working-age adults: 95% of residents vs. 67% of U.S. working-age adults. Seniors: 95% of residents vs. 90% of U.S. seniors.

  • Mental Health: Residents are more likely to report positive mental health than low-income individuals across the U.S. Only 10% of residents reported more than 14 days of poor health in the past month, compared to 22% of low-income survey respondents in the CDC Behavioral Risk Factor Surveillance System.

I don’t know what that actual improvement was pre-fund vs post-fund since the data they shared is compared to a baseline population. So, take the data with a grain of salt.

CVS Health, Centene, and Others Make Housing Investments

UHG isn’t alone in making housing investments—everyone is doing it. Other insurers see an opportunity to make relatively small but meaningful investments in affordable housing, which will save downstream costs (e.g., overutilization of emergency departments). I’ll explain further in my Dashevsky’s Dissection.

Below is a quick sentence or two on several incumbent insurers and their affordable housing investments:

Dashevsky’s Dissection

Insurers’ investment in affordable housing is far from philanthropic. That’s why it’s an investment and not a donation. But that’s OK. This is the type of private investment we want in society.

Evidence suggests that investment in affordable housing positively impacts health outcomes and reduces healthcare costs, especially for vulnerable populations (e.g., those experiencing homelessness). Hence, health insurers are OK dumping millions—and billions—into affordable housing.

Here’s some of the evidence supporting the positive impact of affordable housing investments…

OUTSIDE THE HUDDLE

The top three articles I’ve read this week.

1) Eli Lilly Increases Investment to $9 Billion to Expand Tirzepetide Production

Lilly announced it will increase their investment from $3.7 billion to $9 billion to raise production capacity for tirzepetide production. This is their largest investment in operating history. Speaks words! Read my article exploring the obesity market and trends.

2) “Nearly 20% of donated organs go unused — here’s how we can fix it and honor donors”

Despite the increase in organ donations, nearly 20% of donated organs go unused. Transplant centers' are largely reluctant to accept organs that aren't deemed "perfect," driven by pressure to maintain high patient survival rates. The organ transplant process as a whole is complex—far from efficient. I analyzed the organ transplant process here as part of my Inefficiency Insights newsletter (free access to this analysis!).

3) Price Differences Among 340B-eligible Hospitals for Physician Administered Drugs

I had to do a journal club a couple of weeks ago on an interesting study analyzing 340B-eligible hospital prices for physician-administered drugs. The study found that hospitals eligible for 340B discounts applied a median price markup of 3.08 times over acquisition costs and retained 64% of insurer drug spending, while non-eligible hospitals had markups of 2.44 times and retained 44%. Independent physician practices had the lowest markups and retained only 19.1% of the insurer's drug spending. I haven’t covered the 340B program much, but will do so soon. You can read my latest on the drug supply chain here.

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