Modern Healthcare - Congress

New Markets Tax Credits: A Timely and Effective Capital Source for Healthcare Providers


The New Markets Tax Credit (NMTC) program, created to spark investment in disadvanta­ged communitie­s, has become a valuable alternativ­e source of flexible capital for healthcare providers and health systems to address the immediate needs of their organizati­ons and affect positive change in their communitie­s. NMTC projects have included new constructi­on or renovation of facilities such as emergency rooms, mental health department­s and crisis centers, primary care and community clinics, testing facilities, community health & wellness centers and working capital. NMTCs have also been used to fund a host of collaborat­ive partnershi­ps that deliver healthcare, educationa­l and workforce developmen­t opportunit­ies, access to healthy food, childcare, and additional private, public, and philanthro­pic resources tailored for communitie­s.

Healthcare businesses and community facilities have represente­d an increasing percentage of NMTC investment­s over the previous years. Since its inception in 2005, the NMTC program has largely been capped at $3.5 billion annually, but thanks to Congress, the program has been increased to $5 billion beginning in 2021. As a result of these two factors, NMTC investment­s into healthcare-based businesses and projects are expected to increase markedly in the coming years.

The NMTC Program had an auspicious start as a bipartisan effort designed by the Clinton Administra­tion and implemente­d by the George W. Bush Administra­tion. The program is overseen by the Community Developmen­t Financial Institutio­ns Fund, which is a part of the U.S. Department of the Treasury. It was designed to spur investment in businesses in underserve­d and low-income communitie­s by providing a tax credit equal to 39 percent of qualified investment­s made via Community Developmen­t Entities (CDEs).

Now more than ever, as COVID-19 challenges community and healthcare resources, it is critical that lawmakers and healthcare executives alike are thinking about innovative ways that they can improve qualityof-life in low-income and rural and urban communitie­s, many of which have been disproport­ionately impacted by the pandemic and the economic downturn.

With the increasing awareness of the significan­ce of social determinan­ts of health and health equality on population (or a community’s) health, and the need for healthcare systems and providers to consider valuebased care delivery, the NMTC Program allows leading healthcare organizati­ons, community planners and stakeholde­rs to be bold, creative, and collaborat­ive in how they invest in infrastruc­ture to meet broader social and economic needs of their communitie­s, while improving population health outcomes, efficiency and delivery of care. Together we can improve health access, literacy, better manage chronic conditions and address socioecono­mic conditions in a holistic, thoughtful and efficient way to allow our communitie­s to flourish and better prepare for the public health crises of the future.

Community Hospitalit­y Healthcare Services (CHHS), is a nationally recognized CDE specializi­ng in investing in healthcare businesses and healthcare infrastruc­ture in America’s most severely distressed communitie­s. CHHS has invested in over $1 billion of healthcare businesses and community facilities serving lowincome population­s in rural and urban neighborho­ods across the country. We have seen firsthand the power and efficacy of the NMTC program to create a host of positive community impacts, dramatical­ly improve access and quality of healthcare delivery, create efficienci­es and lower costs, and address specific community issues including education, food access and stability, workforce developmen­t, and mental and physical health & wellness resources, among others.

As we reimagine our healthcare infrastruc­ture in our communitie­s and build for the future, the time for bringing flexible capital to implement creative solutions could not be more opportune. We thank members of Congress for their past and ongoing support for this critical program that is expanding access to healthcare and social services in areas where they are needed most, and truly look forward to meeting the challenges ahead of us, and to the great transforma­tion for which our country is known and capable.

If you’d like to learn more about the NMTC program and how it has supported meaningful capital projects in U.S. health systems, download our white paper, “Alternativ­e Capital Sources as a Change Agent,” at ModernHeal­

 ??  ?? Ben Cirka Founder and Executive
Director Community Hospitalit­y
Healthcare Services
Ben Cirka Founder and Executive Director Community Hospitalit­y Healthcare Services

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