A rendering of Nationwide Children's Hospital's new behavioral health pavilion in Columbus, Ohio. It's one of the largest and most prestigious institutions of its kind in the U.S., but the neighborhoods nearby have not always benefited from its growth. Courtesy Nationwide Children’s Hospital and NBBJ

A children’s hospital in Columbus, Ohio, is trying to treat a difficult patient: Its own struggling neighborhood.

Growing up on the South Side of Columbus, Ohio, in the 1970s, Carol Smith didn’t think much about the nearby children’s hospital, except when she went to see the doctor. Though the institution sat a few blocks from her family’s house in the Southern Orchards neighborhood, the people inside the stately brick building seldom interacted with blue-collar families living around it.

”It was just kind of an island,” said Smith, now a 55-year-old auditor for the city school district. “There wasn’t outreach or anything like that.”

That’s changed. About a decade ago, Nationwide Children’s Hospital embarked on a project to transform the adjacent area. The medical institution pumped investments into housing improvements in the surrounding community as part of an audacious effort to create a healthier environment for residents. The idea, as a recent article in Pediatrics journal explained, was in part an effort to treat a “neighborhood as a patient”—improve the overall public-health profile of the community by reducing the stressors of a high-poverty environment.

So far, Nationwide Children’s experimental cure for a sick neighborhood seems to be working—housing values are ticking up, the vacancy rate is down, and several other indicators are showing positive results. But as gentrification pressures mount on the downtown-adjacent neighborhood, some locals worry that the most vulnerable among them—and most at risk for health problems—won’t be able to stick around for the full course of treatment.

***

Urban hospitals have been major players in community redevelopment since community redevelopment was conceived in the 20th century. These are anchor institutions with big footprints, lots of employees, and vast amounts of economic leverage to throw around. The “urban renewal” projects of the 1960s, in which local authorities used eminent domain to raze entire neighborhoods—usually brown, black, and poor—to make way for massive new constructions frequently featured large hospitals. They displaced thousands of households, and left traumatizing scars. Today, 20 percent of the country’s 1,250 large, nonprofit hospitals are located in high-poverty neighborhoods in urban cores, according to a 2015 report by the Institute for Competitive Inner Cities, partly a vestige of this past.

That wasn’t quite the story of Nationwide Children’s, which started life in 1892 as Columbus Children’s Hospital. But the fraught legacy of urban renewal is part of the story in Southern Orchards, a neighborhood that today counts about 4,300 residents, about a quarter of them children. A interstate rammed through the middle of the community in the 1950s and 1960s, demolishing homes, forcing relocations, and cutting off many remaining families from nearby jobs downtown. The highway marked the beginning of decades of decline: Between the loss of manufacturing jobs and the crack epidemic, about half of the population of majority-black Southern Orchards vanished between 1970 and 2009. Abandonment and blight became a familiar sight; gang activity and drug sales flourished.

After moving away for a time in the 1990s, Smith returned to take care of her mom at the height of the foreclosure crisis in 2008. The rate of vacant properties in her neighborhood peaked at over 31 percent. The child poverty rate hit 49 percent. “It was a very tough area,” she said.

Foreclosure rates in Southern Orchards were some of the highest in the county in 2008. (Pediatrics)

The neighborhood was not a particularly healthy place for kids growing up there. But it seemed like the main response from Nationwide Children’s—a preeminent research institution, responsible about 300,000 children insured by Medicaid across southeastern and central Ohio every year—was to put up walls.

As Southern Orchards was in decline, the children’s hospital next door was booming, adding new wings and buildings and expanding into a campus of clinical and research facilities. It’s now one of largest children’s hospitals in the U.S.—and it’s getting bigger. In 2016, it announced a $730 million expansion that includes 11 building projects, including an eight-story Behavioral Health Pavilion, due to be completed in 2020.

But Nationwide Children’s rising fortunes did little to lift Southern Orchards. In the early 2000s, the hospital was buying up neighborhood blocks in preparation for an $80 million, 160,000-square-foot addition. As it went, “they built a parking lot with a back fence on it that separated the neighborhood, and sent security guards on patrol a block further out, making circles around the hospital,” said Kelly Kelleher, the director of the Center for Innovation in Pediatric Practice at Nationwide Children’s. “It was to keep employees safe, but they were psychological barriers for the community.”

This is a familiar pattern for urban hospitals, whose security and parking needs can make them poor neighbors to the residents who live nearby. But then a few things happened that nudged Nationwide Children’s to think about its neighborhood differently. First, around 2008, hospital leaders came to the city looking for tax incentives—they wanted to improve public roads, sidewalks, and parking areas, according to Steven Schoeny, the city’s director of development. The city agreed, but they made a requirement: The hospital had to put some money into stabilizing the neighborhood, too. (The exact numbers are hazy: Schoeny and the public information officer for the department of development said the city likely no longer retains a record of the initial contract with the hospital.)

That tit-for-tat marked the first stages of what came to be the Healthy Neighborhoods, Healthy Families initiative. Partnering with a local faith-based nonprofit developer called Community Development For All People that was already rehabilitating homes across the greater South Side area, Nationwide Children’s backed about $1 million in home repair grants for 74 homeowners in Southern Orchards. Residents fixed up roofs and siding, installed energy-efficient windows, and put fresh coats of paint and landscaping on the properties.

It was a modest investment, but it had a big effect on the aesthetics of the neighborhood, and it “felt exhilarating” for hospital leaders to get active in the neighborhood, said Kelleher. So they did: The following year, Nationwide Children’s formally entered the real estate development business. It began to buy and flip vacant and abandoned homes, selling them to buyers just over the neighborhood’s median income range. Special incentives were extended to low-wage employees who worked at Nationwide Children’s. It continued to back the nonprofit as it invested further in neighborhood homes, selling about 10 houses every year. In 2012, the initiative expanded beyond the immediate 31-block area Southern Orchards to a 52-block area farther south.

The hospital also began to watch what For All People was doing with its rental housing. Between 2012 and 2015, the nonprofit and a private developer had built nearly 100 rental units in the area with federal low-income housing tax credits. After that, the hospital joined with For All People and a commercial developer to win a $11.7 million LIHTC grant to build a 58-unit apartment and townhouse building where an abandoned elementary school had once sat near its campus.

Over the past nine years, Nationwide Children’s put $6 million into this combined effort, joining the city and other donors to Healthy Neighborhoods, Healthy Families; all told, what began as holding up its end of a tax deal became a nearly $23 million investment in 272 single-family homes and dozens of rental units around the South Side.

I give credit to the hospital purely for continuing well beyond anything that they were required to do by us,” said Schoeny.

By and large, the hospital’s investments have been welcomed by the neighborhood, said Michael Doody, another longtime Southern Orchards local who works as a private investigator and manages a local community garden. “They’ve done a good thing for the neighborhood,” he said. Rather than demolish the housing stock, the hospital has injected fresh life into it, he said. Doody also applauded the outreach that’s paired with the housing investments: there are job training classes, back-to-school giveaways, and potlucks regularly held at the apartment complex.

Nationwide Children’s largesse has not been purely altruistic, of course. Hospitals, like many anchor institutions, expect returns on their community investments. A more attractive neighborhood is undoubtedly an employee benefit, said Jason Reece, an assistant professor of city and regional planning at the Ohio State University who co-authored the report in Pediatrics with Kelleher. But the advantages of improving quality of life in Columbus go beyond that: After the Affordable Care Act, Nationwide Children’s became what is called an accountable care organization. That means it gets reimbursed by the state for each Medicaid and Medicare patient it treats, rather than each service it delivers. This is designed to incentivize the hospital to cut down on redundancies and suppress readmission rates.  

An emerging body of medical research shows how environment can determine health: The stress of living in a neighborhood with entrenched poverty and crime can increase a person’s risk for injury, heart disease, diabetes, stroke, cancer, and respiratory disease. Children in the South Side of Columbus suffer disproportionately from obesity and asthma; infant mortality rates are some of the highest in the state.

And for children especially, unstable and substandard housing in particular is a driver of poor health outcomes, since it can expose them to lead paint, unreliable heating and water systems, and a higher risk of physical injury. The stress of homelessness, even temporary, can lead to behavioral health problems and PTSD in young people.

Kelleher described himself as an early leader in pushing the hospital to think about the immediate neighborhood as a target for care. Perhaps if the hospital kept up its investments in Southern Orchard’s housing stock, he thought, it could also make the neighborhood a healthier place for children to live.

“We’re 125 years in the neighborhood,” he said. “If we’re going to have long-term effects on reducing costs, we have to to start changing the structural aspects of the society we’re working in.”

Thanks in part to the redevelopment catalyzed by Nationwide Children’s in Southern Orchards, the neighborhood’s housing vacancy rate is now below the city’s. High school graduation rates have improved, and reported homicides have declined in the area, in contrast with the trends for the rest of the city. According to the research, these factors should add up to a “healthier” neighborhood, with kids checking in for medical care less often.

Vacancy rates in the neighborhood targeted by the Health Neighborhood, Healthy Family initiative have dramatically declined. (Pediatrics)

However, the precise effect of these investments on the well-being of the neighborhood’s children is not so clear yet, Kelleher admitted. Over the next three years, the hospital will try to assess this by a number of metrics, including readmission rates, the number of emergency room visits, inpatient days, and the particular health issues kids from the neighborhood are bringing in.

Nationwide Children’s is not the only hospital getting back into the community redevelopment game in the past decade. Because of the convergence of the ACA’s cost-cutting incentives for large nonprofit providers, and the rise of research into the social determinants of health, neighborhood investments by hospitals are taking shape in Denver, Seattle, Boston, Atlanta, and New York, and other cities across the U.S. It has became a national trend.

That means there have also been a number of high-profile controversies kicked up by hospitals-as-developers who, like Nationwide, attempt a major expansion into the neighboring community. In Baltimore, Maryland, Johns Hopkins University Hospital launched its East Baltimore Development Initiative in the early 2000s, an ambitious project to transform 88 acres of low-income East Baltimore with new housing, labs, offices, schools, parks, and retail amenities. In the process, the university razed whole blocks of homes, displaced hundreds of homeowners and tenants, and rebranded the neighborhood. The slow-moving project has long been dogged by criticism from former residents who have been waiting many years to see the benefits promised to the community.

In Cleveland, meanwhile, the famous Cleveland Clinic, with its international clientele of high-paying patients and luxury amenities, stands in a gleaming contrast to the surrounding neighborhood of Fairfax-Hough, where the poverty rate stands at 39 percent, nearly four times the national average. The hospital has invested some in the community’s housing stock, and it’s opened a community health clinic. But as it saves millions annually on healthcare costs on uninsured patients, thanks to the ACA’s expansion of Medicaid, its annual spending on community benefits has barely kept up. Locals wonder where the savings have gone. “[They’ve] been absolutely no benefit to the black community,” John Boyd, a resident whose family has lived within blocks of the hospital for the better part of the century, told Politico.

Whenever a large institution in a dense urban area tries to grow, some friction is inevitable, said Kimberly Zeuli, a senior fellow at the Institute for Competitive Inner Cities. But too often, she said, many such projects wind up paying little more than lip service to the notion of community investment as they clear out families and historic structures in their path. “Historically, most of these projects have gone wrong,” she said.

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Nationwide Children’s may provide a warmer, fuzzier model for hospital-as-developer. But it’s not immune to some of the same criticisms that have been leveled at other big medical institutions. Its profits are also booming, largely thank to the hospital’s work through its accountable-care organization, Partners for Kids. The hospital has recorded a revenue surplus on its spending on Medicaid patients in recent years, rather than a deficit, and according to a 2015 article by the Columbus Dispatch, it posted $285 million in total surplus from operations. Partners for Kids has slashed tens of millions of dollars in annual costs to the hospital, Nationwide Children’s chief financial officer Tim Robinson said at the time.

Compared to those huge numbers, $6 million in paint jobs and home-flipping doesn’t seem like much. And what is far more obvious, and measurable, than the health effects of Nationwide Children’s neighborhood “treatment plan” are its effect on neighborhood property values. Southern Orchards is gentrifying, thanks to new homebuyers lured by the low-priced, recently rehabbed homes.

That includes Dylan Grieshaber, a 32-year-old clerical assistant who works for the county, who bought a home through Healthy Homes, Healthy Neighborhoods in 2015. Growing up in Columbus, he’d had an impression of the neighborhood as a dangerous place. But as soon as he and his fiancée saw the two-story, prairie-style, downtown-adjacent house priced at a mere $118,000 in 2015, “we were sold,” Grieshaber said. Three years later, his home is worth about $170,000, according to Zillow. According to numbers provided by Community Development for All People, average property values in Southern Orchards have nearly doubled from the start of the initiative.

Recent arrivals have brought a clutch of new restaurants, shops, and neighborhood amenities, which long-timers like Smith and Doody say are a plus. But rising home values have also put displacement pressure on some residents in the neighborhood. “I do have a concern about whether the people who’ve been there will manage to keep their home,” said Smith.

Renters in particular can struggle to stay in place when home values are on the rise. Although the Healthy Homes, Healthy Neighborhoods initiative has boosted the number of rental units in the area, it hasn’t done much yet to help existing residents stay in the neighborhood as rents rise. And that’s a big gap, since by far it is tenants who are most vulnerable to issues related to housing instability. “In Columbus as a whole, our renters are very unstable,” said Reece. “We have lots of eviction. It’s a much tougher piece of the housing market to get your hands around.”

To its credit, the hospital’s housing program is now trying to address this segment of the market with a forthcoming program called Healthy Rental Homes. It will flip properties into rental units for low-income tenants with the plan to add 15 units per year over the next five years.

This component makes the program truly unique, according to Dr. Megan Sandel, a leader of a similar neighborhood housing program at Boston Medical Center who has advised Nationwide Children’s on their initiative. “This is one model where a hospital is literally owning and operating housing in partnership with other housing entities,” she told NPR.

According to Kelleher, there are encouraging signs that displacement is not occurring among Southern Orchard’s most vulnerable potential patients. The rate of Medicaid births coming from the neighborhood around the hospital has not budged much since 2008. That implies families are not being pushed out of the area.

Still, the side effects of the hospital’s prescription for this neighborhood remain to be fully understood. In a commentary on the article about Nationwide Children’s in Pediatrics, the medical researchers Irene Yen, Susan Neufeld, and Leslie Dubbin commended Nationwide Children’s practices but remarked that redevelopment may not be a complete course of treatment for a community defined by “structural dismemberment” of so many residents forced to leave their homes. Recognizing that traumatic history, they argued, would be a critical ingredient in any prescription written for the community.

“[W]e strongly urge those in this collaborative to think
strategically about ways of finding those who have been displaced and testing strategies that reestablish connections with them so that they may benefit from these efforts,” they wrote.

Kelleher, Reece, and John Edgar, the Methodist pastor who directs Community Development for All People, admit there is much more to do in order to maintain safe and stable housing for all of Southern Orchard’s neighbors for the future. “It’s proven to be a lot easier to fix old properties than it’s been easy to ensure non-displacement,” Edgar said. “That is the major challenge.” But they contend that, so far, what the hospital has done in partnership with his organization has been effective. And now the focus is shifting from reducing vacancies to keeping the would-be recipients of the hospital’s health-focused investments in the neighborhood.

“It took 80 years to end up with these neighborhood disparities,” said Kelleher. “Its going to take longer than eight years to fix it.”

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