1. Financing the Expansion of Innovations The Green House Project Experience

2. The Green House Project Innovation reinvents nursing homes by: – 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: – Greater satisfaction – Better clinical outcomes – Medicaid cost savings – Cost neutral operations – Occupancy gains Funded by The Robert Wood Johnson Foundation

3. Financing Challenges New housing + services models for low- income individuals – 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 – Providers achieve better returns elsewhere – Internal competition for organization’s/system’s capital

4. Financing Approaches What approaches worked to spread The Green House Innovation? – 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 – 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

5. 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 low- income 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