High-Quality Care in Low-Income Communities: Q&A with Steven Weingarten, Vital Healthcare Capital
Vital Healthcare Capital (V-Cap) and the Robert Wood Johnson Foundation (RWJF) have announced a $10 million investment in Commonwealth Care Alliance (CCA), based in Boston, Mass., to help fund the organization as it rapidly expands its model of care for patients who are dually eligible for Medicare and Medicaid.
The non-profit care delivery system provides integrated health care and related social support services for people with complex health care needs covered under Medicaid and for those eligible for both Medicaid and Medicare. CCA’s expansion comes as Massachusetts continues to pioneer integrated, patient-centered care for people who are eligible for both Medicare and Medicaid though the newly created “One Care: MassHealth plus Medicare” program, one of several financial alignment initiatives for people with dual eligibility established by the Affordable Care Act (ACA) that are launching nationwide.
The loan—the first to be made by Vital Healthcare Capital, a new social impact fund based in Boston, through support from RWJF—provides funds needed by CCA for financial reserves required by the Commonwealth of Massachusetts as the agency expands the number of beneficiaries in its programs.
According to CCA Director Robert Master, the social impact goals are to:
- Scale a person-centered integrated care model for high-needs populations.
- Demonstrate what are known in public health as “triple aim” outcomes in health status, care metrics and cost effectiveness.
- Train, develop and create frontline health care workforce jobs, including health aides, drivers and translators.
- Create innovations in health care workforce engagement in coordinated care plans to better integrate into the care plan the staff members who most directly touch the lives of its members.
Over the next five years, Vital Healthcare Capital plans to establish a $100 million revolving loan fund, leveraging $500 million of total project capital for organizations working on health care reform for patients in low-income communities.
NewPublicHealth recently spoke with Steven Weingarten, CEO of Vital Healthcare Capital, about the inaugural loan and the firm’s expansion plans going forward.
NewPublicHealth: How did Vital Healthcare Capital get started and what are its overarching goals and investment criteria?
Steven Weingarten: Vital Healthcare Capital has been formed as a new non-profit financing organization to invest in quality health care and good health care jobs in low-income communities. The organization came about after a couple of years of research and development with funding from the Robert Wood Johnson Foundation, as well as from the Ford and Rockefeller Foundations and support from SEIU, the health care union. Healthcare reform is really part of a broader restructuring of health care that has enormous implications for low-income communities, and for the health care providers and plans that have been focused on these communities. Having financial capital to be able to transform health care to a better delivery model will be a critical challenge in upcoming years. So we are coming in to serve that need.
NPH: Tell me about the investment criteria. What do you look for when you are thinking about the investments?
Weingarten: We’re looking for three things. One is strong financial and management competencies, two is a health care impact—we’re looking for organizations that will improve health care outcomes and quality of care for local communities—and three is a jobs focus. We are particularly looking for organizations that are committed to enhancing the job quality of the frontline health care workers who often are critical to a better model of health care delivery.
Health care transformation is an enormously complex road and we’re looking for organizations that have demonstrated that they have the managerial, financial and clinical competencies needed for a better integrated model of health care delivery. We were particularly excited to have CCA as our platform transaction—our first deal—because they have demonstrated over the years that they’re an outstanding organization with clinical depth and they are able to serve vulnerable populations with complex needs.
NPH: Why does CCA need a new source of funding?
Weingarten: CCA has been one of the pioneering organizations serving Medicare/Medicaid dually-eligible individuals. CCA was one of the first demonstration plans about 10 years ago, in 2004, in Massachusetts that first took the Medicare/Medicaid funding streams and put them together so that one organization could take the full payment stream and integrate the whole continuum of care. CCA has been growing this model of care serving frail elders in Massachusetts and succeeding in both showing positive health outcomes and cost effectiveness, and as a result has been able to fund their own growth incrementally. The opportunity they have now is to dramatically scale the model and so there’s really an exponential growth opportunity. To achieve that they needed more than their own financial resources. The proceeds of the loan will provide for a very specific need—the financial reserves that CCA is required to hold as a regulated plan in Massachusetts. The loan frees up other revenue to be able to provide services and infrastructure that’s needed to build and grow the model—such as improving information technology systems, scaling up clinical capacity and increasing the workforce that’s needed to be able to serve a much larger population.
NPH: Why does the state have that requirement?
Weingarten: Massachusetts calls this financial requirement “insolvency reserves” and it’s really the financial buffer and cash in place so that the state knows that if CCA were unable to meet its obligations to pay their providers in its network for care that has already taken place, that there are resources there to serve that purpose. And we believe after the due diligence and underwriting process that this loan made tons of financial sense; that CCA was the organization best positioned to care for what is in many ways the hardest-to-serve populations; and that the state, the regulators, the federal government and other key actors in the health care system who partner with CCA in providing care all had a strong vested financial and clinical interest in making sure that CCA succeeded. So we felt like not only were we putting an oar on a good boat, but they were rowing in friendly waters.
We’re absolutely seeing the CCA loan as part of a line of business for us and something that is a piece of the puzzle about how to replicate excellent care models for hard to serve populations. Both V-Cap and the Robert Wood Johnson Foundation see this opportunity with CCA as a critical learning process to see what financial resources are needed to scale the right model of care for hard to serve populations.
NPH: How will you assess the merits of the loan and its ability to be replicated?
Weingarten: Because CCA is such a pioneer and this is the first loan we’re making, we very much see the reporting on programmatic achievement as a critical piece of the learning experience for V-Cap, for the Robert Wood Johnson Foundation and also for CCA. I think that all three organizations see this as the beginning of a process and something that we want to replicate. So we are approaching the reporting process under the loan as an opportunity to be a participant in CCA’s learning about how it’s doing in scaling its model of care. We'll look at the various programmatic, operational and clinical metrics that will be tracked as the program is scaled up.
The CCA loan is a five-year loan, and the process of assessment will be ongoing during the term of the loan. We are in the process of preparing our next round of capitalization, and expect to soon be in a position to have additional capital to deploy. We’re seeking borrowers who can put those resources to use to accomplish the kinds of goals CCA represents. We are looking to provide financing to a range of provider types who have the common themes of focusing on low-income, hard-to-serve populations and advancing integrated care models.
NPH: How might the loan impact health care jobs in Massachusetts?
Weingarten: Any time you have a major piece of the economy going through major restructuring—as health care really is now—the kinds of jobs change, and they can change for better and they can change for worse. There is a major shift toward jobs located outside of the hospital walls and involved in close service to high-needs health care consumers. Those jobs can include home care aides, drivers and translators who help people connect to the health care system, technicians and medical assistants who often are the people that are directly touching the lives of people receiving care. One of the key challenges is how to better integrate these frontline health care workers into a coordinated model of care so that everyone is working as part of one team to help consumers get better health care outcomes. So we’re looking for organizations who are pioneering on the workforce side as well, and we think that CCA is doing some very exciting things in that regard.