Financing the Expansion of Innovations
The Green House Project Experience
The Green House Project
• Innovation reinvents nursing
homes by:
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Rebuilding as multiple small homes per
campus (10 people each)
Moving to new staff models, including
combined work roles
• Designed to improve long-term
care ahead of aging demographic
surge
• Multiple research projects
showing:
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Greater satisfaction
Better clinical outcomes
Medicaid cost savings
Cost neutral operations
Occupancy gains
• Funded by The Robert Wood
Johnson Foundation
Financing Challenges
• New housing + services models for lowincome individuals
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Require significant long-term capital for real estate
and operational redesign
Primarily Medicaid/Medicare funded
Combination of business, political, regulatory, and
program compliance risks discourage investors and
lenders (i.e., they can find easier deals)
Flexible and customized financing needed but
expensive, short-term, and scarce
• High mission, low margin business
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Providers achieve better returns elsewhere
Internal competition for organization’s/system’s
capital
Financing Approaches
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What approaches worked to spread The Green
House Innovation?
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Under the radar - tie innovation to well understood models “it’s just a nursing home”
Rounding error - bury a small dollar innovation in a large and
strong financing
Use what you have - Fit into existing subsidies where possible
(e.g., NMTC, LIHTC, HUD, FHLB, bonds)
Specialized loan funds - grant and PRI supported programs
CRA induced lending - outside the box, longer term, and lower
interest
Gaps
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Insufficient availability of what is working
Access to capital for projects without a large system and/or
private pay market (e.g., grass roots, CDC sponsored)
Access to internal equity for projects in large systems where
competition for resources limits innovations to higher margin
projects
Access to external equity subsidies for complex innovations
when the subsidy depends on investors
Flexible financing designed for innovations that don’t fit into
existing programs
What More is Needed?
• Lots more of what is working today
• New sources of consistently
available financing designed to:
• Fill in for declining public sector guarantees
and subsidies
• Leverage ACA shared savings incentives
• Provide credit support for projects in lowincome markets without large system and/or
private pay markets
• Provide flexible structures with longer-terms
and affordable fixed rates
• Deliver significant and consistently available
capacity