Key strategies employed
- Address community health needs through community economic development strategies
- Move cash and cash equivalent assets into local banks and credit unions, including US Treasury Department-certified community development financial institutions (CDFIs), using money market accounts, business checking and savings accounts, and certificates of deposit
- Connect upstream community benefit to inclusive, local hire strategy
- Connect upstream community benefit to inclusive, local procurement strategy
- Reinvest into urban core
Location: Headquartered in Toledo, Ohio, ProMedica serves twenty-seven counties through northwest Ohio and southeast Michigan.
Employees: more than 17,000
Revenues: $2.6 Billion
Investment portfolio: $2.1 Billion
Mission of Program
“We believe our responsibility to our community reaches beyond what you might expect from a healthcare system. We invest in the health of the entire region, working with dedicated community partners to influence policy and to provide preventive medicine, health education, healthy food assistance, and financial assistance to those who need it most.”((“Service to the Community,” Promedica, www.promedica.org/pages/service-to-the-community/default.aspx.)
Driven to improve the health and well-being of the communities it serves, ProMedica began exploring non-clinical solutions for the high rates of obesity locally. In December 2015, ProMedica partnered with philanthropist Russell Ebeid, establishing the Ebeid Institute for Population Health to improve access to healthy food, deliver nutritional education, and provide job training. The cornerstone of the Institute is a 6,500-square-foot, full-service grocery store that offers healthy, affordable food to low-income neighborhoods in Toledo. The store, owned and operated by ProMedica, prioritizes sourcing from local vendors and hires hard-to-employ residents.
The Institute will also soon house a Financial Opportunity Center (FOC), jointly operated by local branches of the United Way and LISC (Local Initiatives Support Corporation), a national community development intermediary. In addition, ProMedica has established a local job-training program at the Institute to create a workforce pipeline that helps community residents gain health system employment. ProMedica’s comprehensive community engagement plan includes creating a Community Advisory Committee with neighborhood stakeholders and establishing a Population Health Steering Team for the Institute. This operational planning team brings together internal champions from ProMedica and outside industry experts.
ProMedica has also emerged as an advocate for Toledo, helping spearhead revitalization and economic development downtown. In 2017, it will relocate more than 1,000 employees from over twenty separate sites to downtown Toledo. More, ProMedica is exploring how these external economic development strategies can link to internal initiatives around inclusive, local hiring and purchasing.
In October 2015, ProMedica partnered with the AARP Foundation to establish The Root Cause Coalition, a national nonprofit organization focusing on hunger and social determinants leading to chronic health conditions. Members of the Coalition work to develop a sustainable national framework for addressing these issues, with special emphasis on engaging the healthcare community.
In 2009, ProMedica began exploring non-clinical solutions to the high rates of childhood obesity in its community. Working in local elementary schools, ProMedica learned that the core problems families and children faced were hunger and food insecurity. Kate Sommerfeld, the corporate director for social determinants of health, explained, “When the recession hit, the bottom fell out hard in Toledo…It became really clear to us, if we were to focus only on obesity, we would be missing the boat.”
ProMedica began exploring how best to meet the challenges of hunger, nutrition, and unemployment. Sommerfeld noted, “We started having conversations with the local social services agencies, with our United Way, food banks, food pantries, and local churches…with our community. Our community confirmed that hunger was an issue that needed to be addressed.”
With the support of their President and CEO, Randy Oostra, and board, ProMedica took a leadership role in addressing hunger in its community. The issue of hunger fell outside its area of expertise, so ProMedica engaged community partners to inform and develop appropriate solutions. This engagement work required serving as a neutral convener, sparking new conversations, overcoming communication gaps among community providers, and learning from those in the community with significant experience in this area.
Two critical ideas surfaced from this work. First, ProMedica added a two-question screener about food insecurity to its patient intake process. The screener has been validated by Children’s Health Watch, a nonpartisan network of pediatricians, public health researchers, and children’s health and policy experts committed to improving children’s health in America. If a ProMedica patient screens positive for food insecurity, this information becomes part of the electronic medical record, and the patient receives a food pharmacy prescription for a two- to three-day supply of food for their entire family. The program is supported by ProMedica’s foundation and community benefit, as well as through a partnership with the local food bank. Since April 2015, ProMedica has screened about 36,000 patients wwfor food insecurity.
Second, in February 2013, ProMedica hired two part-time employees to repackage salads, meats, side dishes, and other unserved food at Hollywood Casino Toledo. Other foodservice providers soon joined the effort, including ProMedica Toledo Hospital’s cafeteria. Over 75,000 pounds of food were collected in the first nine months—enabling local partner Seagate Foodbank of Northwest Ohio to distribute food for more than 55,000 meals. In 2014, ProMedica’s food reclamation program expanded to include additional community partners, such as the Toledo Mud Hens’ foodservice venue at baseball games. Since its inception, the program has reclaimed over 250,000 pounds of food, enough for nearly 175,000 meals. The program costs about $30,000 a year.
To obtain healthy food unavailable from the local food bank, ProMedica sources locally through a grocery store. This initiative required “powerful internal conversations with our doctors. Getting their buy-in was really important in this general process and strategy,” shared Sommerfeld. Involving physicians also helped reduce the stigma associated with hunger and poverty.
ProMedica has tackled hunger through broader community approaches. Working with Mari Gallagher Research and Consulting Group, an expert on food deserts, ProMedica mapped Toledo neighborhoods more than a mile from a grocery store. To better understand community needs, they also investigated the frequency with which residents shopped at corner stores and the quality of the available food.
As in many cities, large grocery chains had pulled out of Toledo’s downtown area, creating a food desert with little healthy, affordable food in the urban core. To ensure a sustainable solution, ProMedica sought to promote local business ownership. The initial plan was to form a joint venture with an existing local grocery store with financial support and community health services, like dieticians, on site. But no local stores were willing, due to perceived risk.
Ebeid, a local philanthropist and current board member, stepped forward to support the project. Sommerfeld recalled asking him: “’What do you think if ProMedica were to operate the market?’ We had his full support, and our CEO’s full support.”
In 2014, ProMedica acquired a building from the city of Toledo to house a 6,500 square-foot grocery store. A year-long planning process, with a sharp learning curve, preceded construction. As Sommerfeld reflects, “That [time spent] was valuable for us on a couple different fronts, not only on the operation side. We’re in the healthcare business, and the grocery industry has a completely different business model that requires a rapid and flexible operating structure. Even evaluating and purchasing the right point of sale (POS) system was a challenge. The closest POS system we had was in our hospital gift shops, but we had to figure out if that would work in a grocery store.”
Construction began with a rapid twelve-week turnaround to meet the ribbon-cutting date. Challenges included structural, code, and permitting issues. Sommerfeld pointed out, “Healthcare has a lot of assets and resources, but the grocery business is…just a different speed, and we were stretched to think and work in a new way.” ProMedica hired a grocery expert to help their team adjust to the rapid environment of the grocery business.
On December 15, 2015, ProMedica opened Market on the Green, a full-service grocery store in the urban core of Toledo. Likely unique in the country, the grocery store is fully owned and operated by the integrated, nonprofit health system.
On product and pricing, the ProMedica team has learned a lot quickly. Achieving the right product mix and volume was one challenge, resulting in the store donating much unpurchased produce in the early days. Over time, they found a balance between variety and demand. The store has a selection of products, of which about 80 percent are healthful. The store sells no alcohol, tobacco, or lottery tickets.
Affordability is another key priority. The store’s low markup keeps prices competitive with other grocers, despite lacking the volumes of larger stores. ProMedica has chosen to price, staples like fresh produce, dairy, and meat almost at cost. Even as the store moves toward financial sustainability, ProMedica will likely maintain some financial support through their foundation. Customers who can afford to do so are encouraged to “round-up” their bills to the next dollar at the checkout in order to maintain affordability for others.
Staffing and budget
Launching the Ebeid Institute and Market on the Green has been a team effort. Continued engagement by President & CEO Randy Oostra, along with the system’s executive team and board, proved key. Kate Sommerfeld, who served as lead director on the projects, explained: “Developing and launching was only possible because we had strong support from all areas of our system. Operations, HR, fundraising, marketing, IT, security, and legal all played a critical role.” To prepare for the store’s grand opening, the executive team held a workday at the grocery, helping to stock dry goods.
ProMedica also hired a market manager with eleven years of experience in the grocery industry to assist with planning and to run day-to-day operations. This hire was vital, bringing grocery expertise that the health system did not have. During the planning process, ProMedica also relied on external grocery experts and leveraged its construction and information technology staff, as well as input from dieticians. Also, they added a programming element, providing interested visitors with tours of the store.
Additionally, ProMedica has committed time and resources to neighborhood outreach. The yearlong planning period proved essential to building trust and strong relationships in the community. The planning effort also helped ProMedica to develop a community advisory committee.
ProMedica has invested about $3.5 million in the Ebeid Institute for Population Health, including a $1.5 million donation from Russell Ebeid. Many of the projects identified in this case study were funded through community benefit, but recently ProMedica’s foundation has been raising more funds to subsidize initiatives until they become self-sustaining. Sommerfeld explained, “This opportunity opened us up to a new type of donors who, previously, had not been interested in funding medical equipment or hospital operations.”
Key strategies employed
Address community health needs through community economic development strategies
ProMedica recognized that addressing the lack of healthy and affordable food in underserved sections of Toledo would require a new type of intervention. Sommerfeld noted, “We wanted to meet the needs of the most vulnerable in our community and in a specific neighborhood that’s demographically diverse but also has the largest concentration of homeless individuals in our community.” The Institute’s primary goals are to eliminate the food desert, provide job opportunities, and needed services. But higher-income individuals have also embraced the grocery store. The market is attracting many suburban customers who shop at the market to support its positive impact on the community.
Move cash and cash equivalent assets into local banks and credit unions
ProMedica, based in Toledo and located throughout twenty-seven counties in northwest Ohio and southeast Michigan, also serves its local communities by leveraging its sizable balance sheet and its leadership position as one of the largest employers within the region. Historically, ProMedica supported local and regional banks, investing in sixteen regional banks and diversified treasury management services. This effort is unique as most healthcare systems bank with only one or two institutions. The banking strategy has helped ProMedica build local relationships in the counties it serves, maintain credit in those communities, and better manage risk during economic downturns like the Great Recession.
In 2015, ProMedica launched a pilot project to position additional deposits of $250,000 to $3 million with smaller community banks, using certificates of deposit (CDs) through the Certificate of Deposit Account Registry Service (CDARS). CDARS is a national program that allows ProMedica to place significant funds with local institutions while maintaining protection of the original deposits through Federal Deposit Insurance Corporation (FDIC) insurance. ProMedica’s directive to the banks is to redeploy the deposits to create loans in those communities, with an emphasis on job creation, new and/or expanded businesses, and new community services or programs. The banks report key metrics quarterly, including how the funds were utilized. Matching services to banks’ skill sets and capabilities avoids duplication of services and ensures the strategy remains efficient for ProMedica.
ProMedica sees this strategy as a powerful way to use its resources to benefit the communities it serves, all the while meeting its fiduciary responsibilities with no additional staffing. Access to capital in low-income communities is a key driver of economic health, which is closely tied to mental and physical health. Neighborhoods suffering long-term disinvestment tend to experience lower life expectancies than more affluent areas.
Connect upstream community benefit to inclusive, local hire strategy
ProMedica is also committed to hiring from the neighborhood and has established a job-training program at the Institute. This program hires individuals with high barriers to workforce entry, such as those with previous convictions or those living in the shelters. Trainees work twelve months at the store, learning technical and soft skills and receiving financial coaching. The Institute provides salary support and funding for an additional four hours weekly for GED classes, vocational training, or other development opportunities. After twelve months, trainees are pipelined into full-time employment with ProMedica or partner companies.
Moreover, ProMedica has reexamined its own hiring processes to identify potential barriers. For example, ProMedica, like many larger employers, requires direct deposit for an employee’s first paycheck. This requirement poses an obstacle for unbanked employees. Sommerfeld explained, “It pushed us to think about our internal policies. Is direct deposit critical? Can’t we provide a hard check for their first paycheck and then work with our credit union to get them into a checking account? It helped challenge us to think about how, as an employer, we make sure that we’re serving and meeting the needs of workers from low-income neighborhoods.”
Connect upstream community benefit to inclusive, local procurement strategy
ProMedica is increasingly prioritizing strategies for increasing inclusive, local construction and procurement.
ProMedica is increasingly prioritizing strategies for increasing inclusive, local construction and procurement. As a small, non-medical project, the renovation of the Institute’s building offered an opportunity for suppliers and vendors to demonstrate competency. Sommerfeld noted, “We looked at what businesses were in the neighborhood that we could source from. Employee shirts are printed in the neighborhood. The cleaning service that we use is located in the neighborhood. We have a local hummus company, a local salsa company, and a local barbecue joint. We also tried to think about opportunities to develop relationships with small and local businesses that would get them established as a vendor for our entire system.”
In December 2015, ProMedica joined the American Hospital Association 123 Diversity Pledge. Sommerfeld emphasized: “We made a public commitment …our CEO signed the pledge that included supplier diversity, and that sparked us internally to take on the opportunity.” ProMedica has been actively working to increase construction dollars with local, diverse firms by encouraging prime construction firms and contractors to partner or subcontract with smaller ones.
Reinvest into urban core
ProMedica broke ground on its new headquarters in downtown Toledo in October 2015. Consolidating 1,000 employees across over twenty different locations, the project will bring the largest influx of employees to the downtown area in many decades. Transition plans, which include refurbishing a long-vacant, historical steam plant on the Maumee River, will improve the downtown area. In addition, ProMedica and other local business leaders have formed the 22nd Century Committee, a public-private partnership dedicated to revitalizing the downtown community. These efforts reflect ProMedica’s long-term commitment to strengthening the region’s leading urban center.
Open since December 2015, Market on the Green’s initial outcomes are promising. From January to August 2016, SNAP sales nearly doubled, from 11 to 21 percent. As of August 2016, the store serves over 3,000 customers per month and is more than half way to its weekly sales goals. When the store reaches the breakeven point, ProMedica will revisit the ownership question and seek a local partner to join the effort. Although the store has only been open for a year, Market trainees are gaining experience, skills, and vocational training; rebuilding credit; escaping predatory lending; and securing full-time employment within ProMedica. One trainee went from being homeless to having stable housing.
The store has also fostered partnerships with community nonprofits, healthcare providers, and faith-based organizations. Just as health systems have set aside their fierce competition to collectively address patient safety, ProMedica is proving that community need and hunger are issues that transcend competitive boundaries.
For more information
Kate Sommerfeld, Director of Social Determinants
Kate Sommerfeld, interview with David Zuckerman and Katie Parker, April 4, 2016.