How Housing and Health Care Nonprofits Can Increase Access to Medical Residential Services

February 17, 2016
By  Tim Bolding Amy Schaftlein Anna Gattuso

With 1.3 million residents on Medicaid, the state of Tennessee spends a lot of money providing the high-quality health care that all residents deserve. According to the latest annual report (2011-2012) from TennCare, Tennessee’s Medicaid program, the organization had a yearly budget of more than $10 billion, with over $5.5 billion paid for flat-fee medical, behavioral and long-term services and over $770 million paid for intellectual disability services. These numbers include provisions for more than 20,000 recipients to live in skilled nursing facilities and over 8,000 to receive home- and community-based services. With tens of thousands to serve, saving on costs through innovative solutions becomes ever more vital.

TennCare has traditionally provided medical care for the state’s sick and elderly residents largely by paying for nursing home care. Recent work by United Housing Inc. (UHI), in partnership with Meritan Inc. and Shelby Residential and Vocational Services (SRVS), demonstrated a way to provide comprehensive health care at a lower cost per patient. The work shows how expanding quality housing services helps Tennesseans gain by saving financial resources. Additionally, this has helped organizations offer a medical residential health care option that is a less expensive alternative to the way things have been done in the recent past, providing Tennesseans with the chance to both receive medical care and stay in the community.

In its 21 years, UHI has helped over 4,000 families buy or keep their homes. The organization emphasizes collaborative efforts to meet the particular market, culture and needs of a community, and has a record of success in housing development and homeownership counseling in the Midsouth. UHI has established networks of collaboration in this region among residents and institutions, as well as investment and support from many national and federal programs and sources. These relationships and this expertise have positioned UHI to play a leading role in helping Shelby County, which includes Memphis, stabilize the area’s most threatened neighborhoods through programs like home rehab construction and financial literacy classes. All UHI housing is designed to be affordable to people whose income levels are less than 120 percent of median household income for the area. The organization’s work with SRVS and Meritan provides housing to a different population—those with special needs living below 50 percent of the area median income.

Medical residential housing keeps individuals in the community and can save money. Graphic courtesy of United Housing Inc.

United Housing infographic

Partnerships with SRVS and Meritan: Beginnings

After longtime UHI supporter Henry Varnell put Executive Director Tim Bolding in touch with SRVS CEO Tyler Hampton, the two realized that they shared an area of service: single-family housing. UHI and SRVS immediately partnered to renovate seven houses that would be owned by SRVS. After success with this program, an additional opportunity to collaborate with Meritan became available through new funding for additional accessible homes. UHI and other NeighborWorks America organizations in the state are preparing a pilot with TennCare to take this model to scale. When finished, this new state initiative will feature medical residential housing through connecting nonprofit builders in the NeighborWorks network with organizations providing medical residential service. UHI has been able to use its experience as an affordable housing leader to further the mission of two organizations doing worthy work.

SRVS and Meritan

SRVS has a unique model in which three individuals live together in a single-family residential home that has been retrofitted to comply with the federal Americans with Disabilities Act (ADA) access guidelines. Features include wheelchair ramps, lowered cabinets and accessible restrooms. In this way, SRVS gives people with cognitive or physical disabilities the opportunity to maintain some independence while receiving top-quality medical care. Meritan has a similar model, more focused on senior care; the UHI-Meritan partnership has yielded four completed homes with more underway. Melanie Keller, president of Meritan, introduced UHI to the term “medical residential.” Keller, a registered nurse with a master’s degree in public health, embodies the cross-section between running a good business and giving people the compassionate care they deserve. She has been able to take this philosophy to scale in her tenure at Meritan. It was an easy decision for UHI to collaborate with Meritan, just as it was with SRVS.

Meritan’s clients have a wide range of developmental disabilities, including autism, cerebral palsy, age- and accident-related illnesses and physical disabilities, and Down syndrome. In addition to the primary diagnosis of a developmental disability, many of their clients also have mobility issues and limited vision, hearing and speech. Medical Residential Services (MRS) are provided in a home where all residents require direct skilled nursing services as well as habilitative services and supports that enable an individual to acquire, retain or improve skills necessary to reside in a community-based setting. MRS must be ordered by an individual’s physician, physician assistant or nurse practitioner who has documented the medical necessity of the services, specifying the nature and frequency of the nursing services. The individual who receives MRS requires direct skilled nursing services on a daily basis and at a level that cannot for practical purposes be provided through two or fewer daily skilled nursing visits. All of these services can be provided in the home by licensed nurses. SRVS and Meritan provide additional services, ensuring that residents obtain their Supplemental Security Income (SSI) and food stamps, get to their medical appointments on time, meet social needs through daily interaction and other supportive services that they may need.

Economic Impact and Social Enterprise

The ultimate results of this statewide program would include savings on a large scale for TennCare by providing community-based health care for Tennesseans while incorporating the expertise of participating nonprofit housing developers across the state. Similarly, MRS providers would benefit from new state contracts. What started as seven homes using $1 million in Neighborhood Stabilization Program funds has since produced 17 homes created by UHI working with SRVS and Meritan; 51 people have been able to remain in the community.

In addition to providing superior care for its residents, TennCare is able to realize significant savings. The partnership between UHI, Meritan and SRVS benefits not just these health care organizations, the residents and TennCare; generating income through an already developed area of expertise means that UHI earns revenue for doing what it already knows how to do.

Partnerships like these are beneficial to nonprofit organizations but are not always easy to achieve. NeighborWorks America has provided support to expand through capacity building and information sharing among housing-based nonprofits; they encourage each organization to develop strategies that pull the best from the public and private sectors. Through the planning process with TennCare, we hope to establish and encourage relationships between Tennessee NeighborWorks organizations and health care service providers throughout the state.

For more information, please contact Tim Bolding at

Tim Bolding is the executor director, Amy Schaftlein is the director of development + communications and Anna Gattuso is the communications and grants coordinator at United Housing Inc. in Memphis, Tenn.

Bridges is a regular review of regional community and economic development issues. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.

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