Improving Community Health While Reducing Costs: Is it Possible?

Jan 19, 2017, 10:00 AM, Posted by

Community Health Funds (CHFs) are a new way to make communities healthier while reducing costs and supporting collaboration. A new project is asking communities to share and spread lessons from CHF and other health partnership experiences.

Children and their parents participate in a family services activity.

Over 80,000 children in Massachusetts suffer from asthma which, when left unmanaged, can dramatically impact overall health, limit school attendance and physical activity. In many cases, uncontrolled asthma symptoms lead to costly emergency room visits. Treating this problem on a large scale will take more than inhalers—it requires coordinated community action. Through the Massachusetts Prevention and Wellness Trust Fund (PWTF), Lynn, Worcester, Holyoke, and other cities have formed community-based partnerships to address several chronic conditions, including childhood asthma. Thanks to these efforts, families receive education, care management and home visits to better manage childhood asthma and ultimately improve their daily lives.

Since underlying social, economic, and environmental factors influence community health issues, the solutions to these issues need a cross-sector approach. But this is sometimes challenging since stakeholders can lack funding and incentives to collaborate.

PWTF was created to address this dilemma. It is a Community Health Fund (CHF)—a financial trust to address local health priorities and promote prevention. CHFs have emerged as an innovative approach for coordinating strategy and shared, flexible funding that supports community stakeholders to work together.

Improving Community Health While Reducing Costs graphic

Why Are CHFs Needed?

Many communities face not only shrinking discretionary budgets, but difficulties in distributing funding to preventative health approaches despite increasing evidence that social determinants of health—factors like socioeconomic status, employment, and the physical environment, among others—significantly influence health and wellness.

Because of this, communities need innovative new ways to fund interventions that improve health outcomes. Since CHFs align stakeholders across sectors around a shared strategy while directing funding toward local priorities, they can help improve community health, lower costs and combat persistent health inequities. Melissa Nahm, who had guided the work to uncover learnings about CHFs, shared the promise she believes they hold by stressing that “we need leaders to collaborate in new ways to prevent illness and disease. We also need to value and pay for this work. CHFs offer an innovative way of paying for prevention."


We need leaders to collaborate in new ways to prevent illness and disease. We also need to value and pay for this work. CHFs offer an innovative way of paying for prevention. - Melissa Nahm


The Current State of CHFs

It’s important to note that while CHFs hold promise, they’re still in their infancy with a handful of communities exploring the concept. PWTF for example—often cited as the most-developed CHF—was only fully implemented in 2015. Given these early stages of development, communities vary regarding the strategies and funding models they’re using. Some communities, like Massachusetts, have relied on public money to fund CHF strategies. Several are pooling philanthropic resources or considering braiding multiple sources. Other emerging efforts are exploring mechanisms to use reinvested savings as a source of ongoing funding.

Factors that Impact Success

While the field is still young, NFF’s research uncovered a few similarities that promising CHFs share:

  • Catalytic events and activities drive CHF development

Events or activities that drive CHF development include grant opportunities, legal settlements (as with the former North Carolina Health and Wellness Trust, and the Gulf Region Health Outreach Program), political and legislative activities.

  • Pre-existing collaborations within communities propel CHF creation

Building collaborative “muscle” is essential to make change happen. Communities with a history of collaboration across sectors bring valuable groundwork to developing a CHF structure. In Massachusetts, PWTF emerged from years of work by a cross-sector, statewide coalition to test new approaches to improving community health.

  • Local needs and dynamics shape how CHFs are structured

CHFs have been shaped by the resources, capacity and expertise available within a community. The broad strokes of a CHF’s strategy (e.g., community health goals, priority issue areas, target populations and outcomes etc.) can inform important elements of CHF structure. Since CHF strategies may vary significantly based on unique community dynamics, so too may CHF structures.

  • Evaluation is critical to understanding the full impact of CHFs

Data on the social and financial impact of a CHF can provide powerful insights. These insights include greater transparency in healthcare spending, a better understanding of how effective services are, the opportunity to course-correct and strengthen existing strategies, and the rationale for continued investment for prevention. Furthermore, understanding cost savings can help determine whether using reinvested savings as an ongoing source of revenue to support CHF strategies is feasible.

What’s Next?

While only a handful of communities have launched CHFs, others are exploring this concept. The progress of CHFs will require:

  • Increased dialogue among communities, thought leaders, policymakers and funders to share lessons learned and ideas for innovation, and to mobilize and generate support for the investments and policy changes needed for success. Communities pursuing CHFs kicked off their efforts by fostering discussions among community leaders spanning sectors. More cross-sector dialogue—as well as dialogue across different communities—is needed both to begin and to nurture CHF development.
  • Support for planning and development, including resources from government, philanthropy and health systems, and technical expertise around outcomes measurement, structuring and beyond. For instance, a consortium of three foundations have formed the California Accountable Communities for Health Initiative to provide funding and advice to multi-sector collaboratives across the state assessing the feasibility, effectiveness and potential value of integrated community health strategies. The initiative includes the CHF approach as one mechanism to achieve meaningful and lasting improvements in community health.
  • Identified source(s) of sustainable funding for the health outcomes achieved through CHFs, which may be realized through strategies like blending or braiding funds and/or capturing and reinvesting savings.

This research has also highlighted an opportunity to further the field’s learning around models of collaboration for improving community health, like CHFs. To do so, NFF and RWJF, in collaboration with the Alliance for Strong Families and Communities and the Center for Health Care Strategies, have released a Request for Information (RFI) to identify examples and lessons about partnership models between community-based (housing, workforce development, early childhood education, etc.) and health care organizations (hospitals, health systems, providers, insurers, etc.) We’re looking forward to leveraging these experiences toward advancing this important field.


About the Authors

Alexandra Chan is a manager based in Nonprofit Finance Fund’s San Francisco office, where she leads engagements with a range of nonprofit and foundation clients, delivering customized financial management consulting services, including financial analysis and business model assessment, strategic guidance, trainings and workshops.

Read her full bio.

Elise Miller is a senior associate at Nonprofit Finance Fund and is based in the New York office. In this role, she provides strategic advice to mission-driven organizations through leading customized financial management consulting services, facilitating workshops, and managing place-based and health-related initiatives.

Read her full bio.