Using community development finance to improve health

by David Erickson, Federal Reserve Bank of San Francisco

Can community development finance help “bend the cost curve” for health care? That is one of the questions posed to participants at the July 13, 2010 Healthy Communities conference, co-sponsored by the Robert Wood Johnson Foundation, Federal Reserve Board, and Federal Reserve Bank of San Francisco. According to experts representing both the health and community development fields the answer is a resounding yes.

The reality is that people who live in supportive, connected, and economically-thriving communities tend to be healthier. Therefore, perhaps the most important contribution that community development finance provides — more than the affordable apartments, more than the startup capital for small businesses, more than the funding for a grocery store, charter school, or day care center — is the larger contribution of a more vibrant and healthier community. In the end, the most important contribution of community development finance may be something we don’t focus on or measure: the billions of dollars of social savings from fewer visits to the emergency room, fewer chronic diseases, and a population more capable of making a contribution as healthy productive citizens.

David J. Erickson, Ph.D., is the Director of the Center for Community Development Investments at the Federal Reserve Bank of San Francisco.

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