Why Business Should Invest in Community Health

Many companies invest heavily to keep their employees healthy, but don't take the next step—invest in keeping their community healthy. John Quelch, Howard Koh, and Pamela Yatsko make the case.
by John Quelch, Howard Koh, and Pamela Yatsko

Children in the United States today are at risk to live shorter lives than their parents. This sobering assessment is one reason big box retailer Target is investing $40 million this year to improve the health of communities around the country. Wellness, Target believes, begins in communities “where people live, learn, work, and play.”

Many firms acknowledge the importance of employee health to their bottom lines, and have also started taking steps to improve their consumer health and environmental health footprints. Target, however, counts among a small number of non health care-related companies including IBM, GE, Bath Iron Works, and L.L. Bean that recognize the link between healthy businesses and healthy communities. They are tapping into business’s unique resources to address community health challenges. Their different approaches provide insight for other companies seeking to improve health in their communities.

The business case for investing in community health is compelling, especially for companies that depend on communities for workers and customers. Sick and absent workers cost American firms some $225 billion annually. Now a study funded by the Robert Wood Johnson Foundation shows how the unhealthiness of an industry’s workers correlates closely with the unhealthiness of the communities in which those workers and their families reside.

Companies that invest in community health have the potential to reduce employee health care costs, expand future access to healthy workers, benefit their reputations, and engender greater consumer and employee loyalty. Healthy communities also have more money to spend on non health care products and services than unhealthy ones.

Underappreciated benefits

Despite these considerations, community health has received less corporate attention than employee, consumer, and environmental health. In a survey of more than 80 companies attending the Building a Culture of Health conference at Harvard Business School in April 2016, a lower percentage of respondents reported having innovative programs and policies for community health than for the other three components of their health footprint. One reason may be the greater difficulty of measuring return on investment for community health initiatives. Companies also tend to lump community health programs under government relations, where they inevitably take a backseat to more pressing crisis management activities. Local sales organizations, which are often tasked with local-level implementation of community health activities, prioritize product sales, supply, and distribution issues first.

Target is breaking through barriers by putting community health and all wellness initiatives at the center of its Corporate Social Responsibility strategy. The move dovetails with the company’s new focus on wellness as a priority business category. As part of this strategy, the retailer is investing $40 million this year in more than 50 non-profit organizations around the US, including the Los Angeles County Alliance for Boys and Girls Clubs and Edible Schoolyard New York City, which focus on increasing the physical activity and healthy eating habits of children and their families in local communities.

Partnering with multiple entities can make sense when companies are just beginning their community health push. The capacity of any one non-profit organization to absorb large sums is limited. Because companies also often lack strong relationships with community health entities, choosing multiple partners allows them to mitigate risk and test out groups as long-term partners. Competition for funds among groups may inspire applicants to perform at a higher level: When announcing it was accepting proposals for its Youth Programming Wellness Grant, Target encouraged organizations to “think big.”

GE, through the GE Foundation’s Developing Health US initiative, focuses on improving health care access, investing nearly 500,000 skill-based volunteer hours since 2004. It works with non-profit community health centers that provide primary care to underserved communities to build health worker skills and leadership capacity. In 2015, it announced a three-year, $14 million grant to scale a successful medical knowledge sharing and collaborative practice platform pioneered by Project Echo in 2003 to expand specialty care access and quality at the centers.

Long involved in community initiatives, IBM last April unveiled IBM Health Corps, which sends teams of skilled employees for three weeks to non-profit health organizations to provide pro bono consulting and technology services. It focuses on a handful of projects each year selected from an applicant pool of more 100 in 2016. In Durham, North Carolina, for instance, it is working with Duke Health and Duke Center for Community & Population Health Improvement to facilitate the sharing of information and impact data about health improvement efforts among community stakeholders.

General Dynamics subsidiary Bath Iron Works and L.L. Bean in Maine are working together to reduce diabetes in nearby communities. As large, important local employers, they have strong incentive to improve local residents’ health profile. By partnering with local health agencies to extend successful in-house employee and dependent diabetes prevention programs beyond their organizations, BIW anticipates a drop in participants’ health care costs by 60 percent on average over five years.

Taking first steps

Some businesses, especially smaller firms, may feel less ability or need to invest in community health. Working in a coalition with other local companies through chambers of commerce or similar groups makes sense in those cases.

No matter the approach, shareholders and the public are unlikely to recognize the full value of a firm’s community health programs and other health-related efforts if those activities are scattered organizationally among corporate departments. Companies can maximize health and reputational benefits by integrating community, employee, consumer, and environmental health efforts into a single health impact strategy and appointing a chief health officer to oversee all four.

Firms with an integrated health strategy can more easily measure their health programs’ total organizational impact. This will allow them to calculate a total population health footprint and publish an annual health impact report, along the lines of today’s sustainability reports. Now that Target has centered its CSR strategy around wellness, it is well positioned to take these next steps toward a healthier future for America’s communities and, by extension, for itself.

Whether big or small, companies looking for a place to start can create a volunteer community health task force to brainstorm ideas for making a difference. They should target a problem on which they can make a positive impact relatively quickly, then extend their efforts into other areas.

The point is to get started. America’s health depends on all businesses to do their part.

About the Authors

John A. Quelch is the Charles Edward Wilson Professor of Business Administration at Harvard Business School and holds a joint appointment at Harvard T.H. Chan School of Public Health as Professor in Health Policy and Management. His upcoming book, Building a Culture of Health: A New Imperative for Business (co-written by Emily C. Boudreau), highlights data and best practices drawn from the Building a Culture of Health conference in April 2016 at Harvard University. 

Dr. Howard K. Koh is the Harvey V. Fineberg Professor of the Practice of Public Health Leadership at the Harvard T. H. Chan School of Public Health and the Harvard Kennedy School.

Pamela Yatsko is a writer/researcher.

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