John Gorman Discusses the Use of Opportunity Zones to Address Social Determinants
Welcome to the healthcare policy podcast on the host. David. Intra Cosso. During this podcast saw discussed efforts to address social determinants of health with John Gorman chairman of the nightingale partners and founder and former Executive Chairman of Gorman Health Group. John Welcome to the program. Thanks David. Great to be here. especially with another native DC guy here most welcome John's by is, of course, posted on the podcast website. Briefly on background, the ongoing covid nineteen pandemic has exposed. The country's failed to adequately address the social determinants of health. Generally defining health access and quality education, economic circumstances, food security, social conditions, and environmental factors. It is estimated that where people live work and socialize determines as much as sixty percent of their health status. Whereas formal medical care accounts for just ten percent. For example concerning. Circumstances forty years of wage stagnation among lower income earners has left forty five percent of working age Americans. With either no health care insurance for insurance without a pocket expenses so high. They avoid sinking care went for example, they developed covid nineteen related symptoms. Healthcare policy makers have slowly begun to take an interest in addressing sto ages as a way to improve health delivery by increasing increasing appropriate utilization and reducing costs. For example, Medicare, advantage plans which enroll more than one third of all Medicare beneficiaries have recently been given regulatory authority to offer Ma benificiary supplemental benefits beyond medical care such as mail deliveries, home modifications, and Personal Care Services. With beginning, discuss, addressing, social determine, specifically use of what are termed opportunities zones. Again. John Gorman. So Jon with that as background. Louis. Begin by asking if you could provide a brief overview of nightingale. Sure David Nangle partners is one of these weird opportunities zone funds that came out of trump's big tax giveaway bill It was actually Cory Booker's program that was designed to encourage investment in real estate and disadvantaged communities and I was sitting on my ass retired last spring and got a notification that the irs had just completely revamped the rags to allow opportunities own capital to be used not just for real estate investment. But also for leases one portly for working capital or for meeting the business requirements of a new company inside one of the nine thousand roughly nine thousand opportunities zones around the country and those opportunities owns David are all. Severely, economically disadvantaged and more importantly medically underserved, and because the irs allowed now opportunities own capital to be used for working capital for meeting business requirements. That's what opened the door to allow us to use opportunities on Capitol to make large scale investments in social determinants of health intervention. So nightingale partners with insurers with health systems with large medical groups to finance design launch, and where necessary execute on our goals to improve. The quality of care for vulnerable populations. In this country, a lot of people like to say and I love it that we packed a Republican billionaire tax shelter in order to improve care for black drought people on that gets me up every morning. Sir Thank you. So this as you noted, this was a provision in the December seventeen tax bill. Specifically page one, hundred, and thirty. This was picked up this previous legislation as you noted, that as you mentioned senator from New Jersey Cory Booker but also the South Carolina African American Republican, the only one Tim Scott. So this is picked up in the tax bill previous legislation and you mentioned the nine thousand. So these are census tracts that meet this low income community criteria wrote and then explain to me. Governors than have to select a discrete number. That could benefit from this. Tax Advantage program is that correct doubts correct and there was a little bit of mischief but some of the governors in the designation of some of those areas and there's been, you know some gamesmanship with this story like you know Chris Christie, the former governor of New Jersey is. Used an opportunity zone fund open up frigging LAUNDROMAT. In Asbury, Park with Bruce, springsteen cats not the kind of stuff that we do. I'm not surprised to hear that I guess the former governor is a is obsessed with. Mr Asbury Park and again just so on. Understand better more clearly, this is the tax advantage here is that by investing the capital gains on your investment, you can avoid paying the. Twenty three percent the capital gains tax and that basically. Sure go ahead, go ahead. Well, basically, the way it works is that if you invest money or capital gains in and opportunities zone and you leave it in for at least ten years, not only is the initial investment completely tax free but then all of the proceeds that you make on that investment are completely tax free. So high net worth individuals. And family offices large corporations the generate large amounts of capital gains love this program, and indeed it opened up about six point two trillion dollars in available capital based on the amount of capital gains that we generate in our economy. So of that amount, David Roughly a hundred billion dollars has been invested thus far into opportunities zones off. The roughly eight months programs operate.