Health and Prosperity

John Williams:

I understand why the Fed would talk a lot about bank regulation and monetary policy and things like that, but why are we talking about health so much?

Ian Galloway:

Health is a big part of economic productivity. If you're too sick to go to work, or if you have to care for a loved one who's at home and ill, then that obviously affects your ability to contribute to the economy. Second of all, health is really more than just about healthcare. Health is something that happens in your neighborhood, in your home, in your community. It's, do you have a job? It's, do you have access to educational opportunities? Are you experiencing toxic stress because of your social context? All those things contribute to your long-term health. Obviously, the disparities that result have an effect on the economy.

It's a really important issue to the economy in a sense that if these disparities and health outcomes persist among low-income people relative to higher-income people, it's a drag on economic productivity.

John Williams:

This is a new, exciting area around healthcare and community development. What are the lessons you've already learned and the big surprises you learned from this?

Ian Galloway:

First of all, the people that care about health and the people that care about poverty are often working side by side in the same neighborhoods, which is interesting because they actually don't usually know each other. That's been one of the key focuses that we've had here at the Federal Reserve—how do we bring more attention across those two fields so that they can learn from each other and leverage their good work?

It's often very difficult to attribute a given health outcome to a given social program or intervention. One of the things we really tried to emphasize is the need to share data across the health and community development fields.

I think that the best way to think about health is, it's the sum record of your challenges and opportunities in life. The good work that happens in community development and in low-income neighborhoods has a huge impact on whether or not you face adversity in life or whether or not you have access to opportunities that allow you to be self-sufficient. That is ultimately the barometer of success in our industry, is how healthy are you.

John Williams:

I go back to the history of a lot of efforts around community development. Often it focuses on housing or it focuses on education or it focuses on healthcare. It seems to me, from my reading of this, is that we need to think about all of them. We can't just think of them in isolation. What are we doing in community development that helps foster that collaboration and getting all of those people together at the same table?

Ian Galloway:

With our first Healthy Communities conference in Washington, D.C., the then-director of the Domestic Policy Council at the White House, Melody Barnes, gave the keynote presentation. She said, look, people don't have a transportation day. They don't have an affordable housing day. They don't have an access to fruits and vegetables day. They have all of those things every day. The problem with our conventional approach to community development has been that we provide access to those things in silos, which I think has been less effective than a more comprehensive place-based, neighborhood-scale intervention would be. That's one of the things we're trying to emphasize with this initiative is we need better cross-sector coordination and more focus on the built environment and the place that people are living in, and really try to wrap all of those people with as many services and accesses and opportunities as possible to improve their health.

John Williams:

Well this is really an exciting area. It makes a lot of intuitive sense the way you describe it to me. Can you give me some concrete examples of where this is really happening in our District?

Ian Galloway:

I'm really excited actually about the recent work in pay-for-success financing , which of course you know about, having written about it in The Wall Street Journal. Particularly around addressing the social needs of the chronically homeless. There's a couple of examples, one in our District here in Santa Clara and another in Denver, where they’re using projected cost savings to the mental health system to pay for supportive housing for the chronically homeless. I'm very excited about that approach, and I really think it's going to the future of investing in the social determinants of health.