Like the groundbreaking safety-net hospital she works for, Dr. Thea James is a dynamo. Among the many hats she wears, she serves as the vice president of mission and associate chief medical officer at Boston Medical Center. Eric Glass, Portfolio Manager for AB’s Fixed Income Impact Strategies shares a wide-ranging conversation with Dr. James touching on the hospital’s unconventional approach, measuring impact, and why charity alone is a bad business model.
00:00 - 00:17
Welcome to On Purpose. I'm your host, Travis Allen, Senior Investment Strategist and National Managing Director at Bernstein. And today, I'm joined by Eric Glass, Portfolio Manager for Bernstein's Municipal Impact Bond Strategy, which focuses on investing in lower socioeconomic areas around the country.
00:23 - 00:58
Well, Eric, you recently hosted a conversation with Dr. Thea James, who is the Vice President of Mission and Associate Chief Medical Officer at Boston Medical Center. She's also an associate professor of emergency medicine and Director of the Violence Prevention Advocacy Program at BMC. Dr. James is also a founding member of the National Network of Hospital-Based Violence Intervention Advocacy Programs. And in 2011, she was appointed to the Attorney General Eric Holder's National Task Force for Children Exposed to Violence.
00:58 - 01:30
So, Eric, maybe start by telling us why shine a light on Boston Medical Center? So we've been a long-term investor in Boston Medical Center, Travis. We look at Boston Medical Center as the beacon of light around the provision of healthcare to underserved and under-resourced communities. For us, there's no, there's basically no better example of an institution that is not only providing a high-quality product within the confines of the four walls of their institution. of the medical center, but are actually going into and out into the community to make that community healthier.
01:31 - 02:01
Your conversations with Dr. James started by focusing on the social determinants of health. Maybe tell us what that term means and why should medical institutions care about the social determinants of health? In general terms, only approximately 20 percent of our health is determined by clinical outcomes and genes. The other 80 percent of it basically comes from who we are, where we work, where we live, where we pray, and where we play.
02:02 - 02:18
And so if you think about it, how do people stay healthy? How do you stay healthy if you don't have high-quality shelter? How do you stay healthy if you don't have access to nutritious foods? How do you stay healthy if you live in an environment that's plagued by violence?
02:18 - 02:39
How do you stay healthy if you don't have access to mass transportation to go from place to place to place so they can do yourself care or things like child care where you can feel comfortable dropping off your child and then again attending to yourself without those things that seemingly are not necessarily associated with suturing a wound or transplanting an organ.
02:39 - 03:01
Those things are vital and essential to maintaining one's health and raising one's quality of life. As Dr. James points out, Boston Medical Center cares about these social determinants of health because they are inextricably linked to outcomes. So when people don't have those foundational things, health and health care will always rank secondary to surviving.
03:01 - 03:24
So when people have limited amounts of resources and money, they are making tough decisions every day about how to allocate those resources they have. Do I use my limited resources to pay rent, to buy food for the family, keep the lights on, or do I use it for a copay for a medical appointment or copay for a prescription or even transportation to a medical appointment. And for them,
03:24 - 03:45
it's an easy decision because health and healthcare will always remain secondary to survival. But meanwhile, these repeat visits to the ER, repeat hospitalizations are occurring because people are not able to prioritize the things that would require their health to remain stable.
03:45 - 04:12
They're dealing with these other things. And so as physicians, as doctors, we're taught to focus on disease. So doctors are chasing disease, patients are chasing life, and the two never align. And so these cycles of poor health outcomes and high costs just repeat themselves. So that's why it is really important for the healthcare paradigm and the way we deliver care to shift.
04:12 - 04:21
I'm an ER doctor. And so in emergency medicine, you really have these unique insights into human nature, in the human condition and really all of what constitutes life.
04:21 - 04:50
And so when people come in over and over again, you recognize patterns. And the first thing you want to do, at least what came to me over time, is, the question I would ask people is, what would it take for this to never happen again? Because I need to understand the root cause of this, because you're taught to focus on disease, and so if you come in with something, we can always reset you back, which is what we do, we reset them to baseline temporarily, only to send them back to to exactly what's driving it.
04:50 - 05:05
And unless we begin to address those domains of determinants of health, this cycle will continue. And in terms of return on investment, it's a horrible business model when you really think about it.
05:05 - 05:35
So that's what all of the attention to determinants of health is about these days. Doctors are chasing disease and patients are chasing life. Now, doctors have a whole new disease to chase, COVID-19, and that's really placing a disproportionate burden on these underserved communities. Yeah, that's been a real AHA for a lot of people out there, but not for people like Dr. James who advocate for these communities every day. I asked her what she thinks COVID-19 has revealed about healthcare and health conditions across the country.
05:36 - 05:37
Nothing we didn't already know.
05:37 - 06:10
People have to understand how people got where they are, how this thing happened. And I often will tell people about a time very similar to right now in the 1930s, right after the end of the Great Depression of 1929. Very similar to now, with the economy tanked out and that type thing. And FDR was trying to figure out a way to resuscitate the country. And one of the things he thought about was creating pathways to wealth building for people. And as everyone knows, the most common pathway to wealth
06:10 - 06:28
building, or one of them, in our country is homeownership because of the familial and generational benefits of home equity. So it was a brilliant plan, except at the exact same time and the exact same decade, he created these policies that established redlining.
06:29 - 07:01
And if you live behind the red lines, you didn't have access to those wealth building pathways. And I sort of feel like at that moment in time, two distinct socioeconomic populations were established and remain fixed to this day in Boston. Specifically while the Boston Globe spotlight team did this sort of series on race back in 2017. And what they revealed was that the median net wealth gap in Boston is $247,000 for whites and eight dollars for blacks.
07:02 - 07:08
Leading the country in that it's just not a good thing. When COVID hit us,
07:08 - 07:34
oh, my gosh, oh, my goodness, I was just got off the phone with some people around this crisis standards of care thing we were going through at that moment. We were the first ICU in the city to fill up at a crisis level. I mean, that surge came on so strong and so fast and it was no surprise to us that we got filled up like that. For some people, it was an awakening. For some people, they did learn something they didn't recognize.
07:34 - 08:06
But the reason I brought up the historical piece is because, you know, going forward, the only way that you will be able to create a path forward and not recreate some of the same structural barriers that were already created, you will do it again because you don't recognize what those things are. I think it is so important to bring up that historical context, because it really helps inform the global conversation we're having today around racial equality and justice.
08:06 - 08:10
I think you're starting to get the picture of what makes Boston Medical Center so unique.
08:10 - 08:38
It's a different philosophy and mindset, completely different. I asked Dr. James for her take on what makes this place so special. I think it's because the culture here is very unique in some ways. I mean, obviously, I have nothing to compare it to other than some of my colleagues who work around the country. The culture is very unique, is like the more innovative your idea is or whatever you come up with, the more different and unique it is, the better opportunity you have to get it supported.
08:38 - 08:55
I mean, there's like no real boundaries. You know, it's like a school without walls, you know what I mean? I mean, you can, like, pretty much present and do what you want as long as you're not being hurtful or harmful, you know what I mean?
08:56 - 09:19
So we've been able to come up with all kinds of stuff, like, in the pediatrics department, like two pediatrics residents came up with this idea about five years ago, where they wanted to help people avail themselves to earned income tax credit. So they started doing people's taxes in the pediatrics department and they've gotten back millions of dollars for people at this point.
09:19 - 09:54
And even Megan, Megan has this thing called Housing Prescriptions program, where she worked with Boston Housing Authority to get families and things into housing, because the pediatricians have always kind of been like at the tip of the spear, if you will, because they you know, they do a lot of unique things, like, they were making the connections between recalcitrant, if you will, asthma and housing, you know, that it had to do with, like, poor housing, those types of things. And then the food pantry.
09:54 - 10:12
We also have a rooftop garden. We got the only rooftop garden on a hospital in Boston. And we actually harvest that stuff up there. We use it in the cafeteria. We use it for the patients. I mean, we have a bee farm up there. We get all this honey that we harvest every year.
10:12 - 10:24
I mean, there's like all kinds of things. And then we got this violence intervention program that we started in 2006. There's so many mentors here for me. We all work together, so I raised my hand to champion it.
10:24 - 10:53
But I didn't know where to start and I started reading papers. At the time, there were only three hospitals in the country that were hospital-based violence intervention programs. And so, by the way, we're now called the HAVI. We used to be called National Network, now the HAVI. And so I started reading one paper that was about measures of success. But the things that were being set as measures of success were things like re-injury, re-incarceration, dropped out of school.
10:53 - 11:09
And I'm like, wait a minute, I couldn't understand why the bars were set so low, because I understand for sure that where you set the bar is this becomes a self-fulfilling prophecy. So I couldn't understand what was trying to be achieved. I didn't understand it.
11:09 - 11:40
Maybe that person knew. But anyway, we decided we weren't going to do that. So we set really high bars for these kids, because in the trauma room, you read these kids' tattoos, they were saying things like born to be hated, dying to be loved. Living is hard, dying is easy, or death is nothing but to live defeated is to die every day. I mean, these kids were crying out. There's like hopelessness, which is the exact opposite of how they are depicted, you know, in the media and how people thought of them.
11:41 - 11:51
And again, it goes right back to the root cause stuff that we're talking about in the 1930s and all that stuff. I don't know too many other hospitals that are doing people's taxes or harvesting honey.
11:52 - 12:25
A big focus for BMC is shifting the paradigm from focusing on charity to equity. The other big focus for BMC is intentionality and measuring impact. We talked about how the pandemic has changed the way Boston Medical Center thinks about providing medical care going forward. And Dr. James shared a story about hospital infrastructure that highlights the innovative way they think about evaluating success. So in Massachusetts, when a hospital does construction on its facility or even builds a new one, the state says you have to give five percent of the total cost of the construction to the community.
12:26 - 12:39
And in 2017, we were doing a campus redesign and we asked the state, nobody ever asked if they could do it this way, but we asked if we could commit our obligation to multiple different housing initiatives. And the state approved it.
12:40 - 12:54
And so one of the things we did was to invest in a private equity fund. And so when a lot of times people are saying, well, you know, people are saying, well, you should use equity in everything you do. And sometimes people don't know exactly what that is.
12:54 - 13:18
I can explain an equity thing we did that was kind of easy on some level because we invested in this private equity fund. And the thing about this equity fund, this fund funds developers of housing, but it will only fund them if they score a certain score and they have to meet certain criteria to be able to get funded.
13:19 - 13:52
And so in order for them to be funded, they have to provide, whatever they are planning to develop has to provide access to affordable housing, has to provide access to employment. It has to be a space of well-being, like it has to have green walking space. It has to have access to transit so that people can get to work and other places they need to go, and it has to provide access to healthy, affordable food. And so our contribution to that equity fund contributed to what is now becoming, right down the street,
13:52 - 14:16
three buildings, they've already finished one, people are living in it. It will be 323 units of new mixed income housing. Some of it is to own and some of it is to rent. We were able to do something that alters quality of life course for people, you know, provides people with opportunities to own homes, provides economic mobility and stuff in the jobs that were there, and access to healthy, affordable food at the same time.
14:16 - 14:37
I'm not saying there's no place for charity. There is definitely a place, because people have immediate needs, like right now. But as an example, for someone who is food insecure, what we have done, I'm sorry to say this again, but it's the first hospital-based food pantry in the country, so our doctors can write prescriptions to the food pantry. Right.
14:37 - 14:57
But at the exact same time, ideally, what should happen is understanding what the root cause is for that person and connecting them with that resource to eliminate their need for the food pantry at the exact same time. And that way you're looking to move them out of that space, out of that line of need.
14:57 - 15:26
The other reason I feel like charity exclusively is not a good business model—because you don't measure it. The only thing you measure is, you might say, I fed 5,000 people. OK. And what did that mean to, for those people? For the future in terms of altering their life course trajectory, right? So when Dr. James talks about altering life trajectories, that sounds a lot like what you were trying to do, Eric, with municipal impact overall. Absolutely.
15:27 - 16:01
In fact, I asked Dr. James about that. She made mention of the fact, and I use this example all the time, that there are two communities in Boston—one, Roxbury, which is a poor community, and the other is Back Bay, Beacon Hill, which is a wealthier community. There's literally a 30-year death gap, or life expectancy gap between those two communities, and they are literally one and a half, two miles apart. One of the things that we talk about and what we're trying to promote in terms of intentionality with our investments in safety net hospitals like BMC is the reduction of that, is basically to reduce that disparity. How do we reduce that death gap?
16:01 - 16:08
I don't want you to think I'm being like flip or anything like that, but it isn't rocket science. I'm telling you, it's not hard.
16:09 - 16:13
It basically is about altering the life course of people.
16:13 - 16:46
We have to invest in things that give people an opportunity to alter their life course through, it basically has to give them an opportunity to be able to have financial stability and economic mobility and opportunities to build wealth. They need the exact same things that we have, and there is no reason in the world to, when we have an opportunity, when we have a resource, to choose a different path for them, then we would choose for ourselves or our family.
16:46 - 17:02
There is no reason and it's not a criticism. I think it's all rooted in mindset, both what people don't understand about those populations, I think they think it's too hard or or those people aren't interested. Those people are absolutely interested. So that's why I say this stuff is not, is just not difficult.
17:03 - 17:23
I think we need 100 community wellness advocates. We didn't want to call them health workers because to me that focuses on like a deficit versus an asset and language matters to people. They've always had some kind of worker like social worker, DCF worker, or some kind of worker that is focusing on a negative or a deficit versus an asset.
17:23 - 17:39
And I'm saying you need those people to sort of like walk the path with people, even as you prepare your college kid or college, when they graduate, you're walking the path with them. They don't need you forever, but they need you for guidance and that type thing.
17:39 - 18:06
The whole notion of safety net hospitals, that whole thing has to change for these people around the country, from the payers to the providers. I mean, people have to just stop focusing on charity exclusively. That doesn't change anything. It's like you can't live in your basement for your whole life. You know, you don't want to do that. You want them to be able to be independent and thriving in life.
18:07 - 18:21
Well, I would like to thank Dr. James for the incredible work they're doing at BMC. And thank you, Eric, for letting us listen in on this conversation. It's been very helpful in getting a better understanding for your investment approach.
18:21 - 18:49
Dr. James told a great story about how she just knew that Boston Medical Center was the place for her when she first interviewed. Just felt right to her. And to be perfectly honest with you, I would say sort of from an investor perspective, I think BMC was a coming to God moment for me in terms of what is the quintessential impact investment. I'm so fortunate to have even found it and to more about it. And this conversation with Dr. James was a tremendous experience, an honor and a privilege from my perspective.
18:49 - 19:14
And it really just makes me think about doubling down and quadrupling down on investments in places like BMC. So I'm so grateful to have had the opportunity to sit down with her and sit down with you. So thank you. Well, Eric, I look forward to speaking with you and with Dr. James in the future. And I'd like to thank all of you for joining us. And remember, we all have values we hold dear. Now you can ensure your investments reflect them.
19:14 - 19:34
Please subscribe and rate us on Apple Podcasts or your podcast service of choice, and feel free to reach out to me directly on LinkedIn. Thank you again. Bernstein: Making money meaningful for individuals, families, and foundations for over 50 years. Visit us at Bernstein.com.
- Travis Allen
- Senior Investment Strategist, National Managing Director—Wealth and Investment Strategies Group