Outside our credit union cul-de-sac, there’s a great deal of conversation about how nonprofits, financial institutions, and local governments can build “health equity.”
Health equity basically means everyone has a fair and just opportunity to be healthier.
OK, you say, but credit unions work in finance. What do credit unions have to do with good health?
A Robert Wood Johnson Foundation report released in September 2018 reveals greater wealth is deeply linked to greater health. The ZIP code in which you live, your ability to access affordable and appropriate financial services, access to employment and healthy food, social relationships, and income all play key roles in determining your opportunity to live a healthy life and protect yourself from chronic stress.
These factors are called “social determinants of health.” Research has found they account for 40% of an individual’s health outcomes, while clinical care (i.e., access to care and quality of care) accounts for a mere 10% of health outcomes.
Other factors that contribute to health outcomes include health behaviors, such as diet, exercise, and tobacco use (30%) and physical environment (10%), which includes air and water quality, housing, and transit.
Achieving health equity “requires removing obstacles to health such as poverty, discrimination, and their consequences, including powerlessness and lack of access to good jobs with fair pay, quality education and housing, safe environments, and health care,” according to the Robert Wood Johnson Foundation.
The link between financial and physical health is clearly delineated by the American Psychological Association’s 2018, “Stress in America Survey.”
The survey finds that money and work top the list of significant stressors for Americans. In fact, 64% of adults report that money and work are stressors. Generation Z survey respondents report that personal debt (33%) and housing instability (31%) are significant sources of stress.
This is important because stress can harm people’s physical and mental health. In turn, poor health impacts their ability to work or perform well at work, which can further compound financial insecurity.
Here’s where credit unions come in. Credit unions directly and indirectly influence several social determinants of health that affect their members’ financial and physical well-being.
They do this by, for example, providing members with access to high-quality, affordable financial products and services. They also offer financial education to help members build financial security and wealth. Eighty-seven percent of members belong to a credit union that offers some form of financial education.
One Midwest credit union’s member, a straight-A student at a local college, had to replace her car during the middle of the semester. She didn’t have enough money to replace the vehicle, and she already had some student loans.
This was potentially devastating because without a car, she couldn’t get to class.
The member approached her credit union and secured an affordable loan, allowing her to purchase a car and continue with her college education. Without the loan from her credit union, the member’s college education would have been disrupted or derailed. Ultimately, she completed her degree and paid back the loan.
How does this story connect to health equity? A college degree has a significant impact on individuals’ lifetime earnings and employment. Data from the Bureau of Labor Statistics indicates the average weekly earnings of someone with a bachelor’s degree is $1,169 versus $713 for an individual with a high school diploma.
Over the person’s lifetime, that translates into approximately $1 million in additional earnings.
Higher income and access to employment are positively correlated with better health outcomes. The car loan from the credit union removed an obstacle—transportation—that stood in the way of the member obtaining a college degree and increasing her chances of both higher lifetime earnings and a healthier life.
As credit unions, we understand that day in and day out we’re making a difference when regarding our member’s financial security and wellness. Talk to any credit union staff member and they likely have stories about how their credit union has transformed the lives of countless members, many of whom banks turned down.
Even if it wasn’t immediately evident to the credit union staff, the transformational part of the story likely had some connection to credit unions removing obstacles for members to become more financially secure and live healthier lives.
It’s important that we acknowledge and better understand the role credit unions play in advancing members’ health equity both directly and indirectly.
NEXT: How to promote health equity