The Kaiser Family Foundation’s Role in Today’s Health Care System
Drew E. Altman, Ph.D., President and Chief Executive Officer. Updated: May 2014
Follow Dr. Altman on Twitter: @DrewAltman
This essay discusses the choices we have made about our mission and operating style. It is a revised version of an essay published in the journal Health Affairs in 1998. Of course, I believe deeply in what we are doing at Kaiser, but I offer this and update it every few years for interested readers with the caveat that our choices are not necessarily the right ones for others. Each foundation and non-profit organization has a different set of opportunities by virtue of its history and donor intent, its size, geographic location, the character of its board and staff leadership, and other factors. I have always believed that our society is best served by having foundations that do different things. Organizations also evolve and change (and should). We began as a private foundation, quickly switched to a private operating foundation, and now we are a public charity, a change which signals no shift in mission or operations but gives us a status which more accurately reflects how we operate today.
How Kaiser Determined Its Strategic Direction
The modern day Kaiser Family Foundation was established in the early 1990s when KFF made a transition to an independent national organization and I came to the Foundation to implement a vision of a different kind of foundation the Board and I shared. The “founding” board chair of the modern day KFF, Hale Champion, was an especially important colleague and partner in charting the early directions for the new Kaiser.
At that time we asked one overriding question: “How can we best have an impact with (then) about $30 million to spend each year in a rapidly changing, trillion-dollar health care system?” Nor were we large enough to try to change things through direct action — by undertaking large, multi-site demonstration programs, supporting large numbers of community organizations, or bankrolling the development of new independent national institutions — as some larger foundations do. With a $3 trillion health system now, our strategy from 20 years ago is even more relevant.
Just as important, not only was the U.S. health care system bigger than it was in the 1980s, but it was a radically different one as well. When I was a vice president at the Robert Wood Johnson Foundation in the early 1980s, we saw ourselves as key players in a largely not-for-profit health care community that had great interest in working with the philanthropic community, and in the demonstration, research, and training projects that foundations funded. Those days are largely gone. Today’s health care system is dominated by large commercial interests driven by investors’ demand for profit, by non-profits almost equally focused on revenues, and by government policy decisions that often are shaped by larger ideological, political, and budgetary concerns. For better and worse, health care has become big money and big politics, and health foundations initially struggled to adapt.
We saw a glaring need in this changing health care system for an independent, trusted, and credible source of information that could provide facts, analysis, balanced discussion, and expert commentary in a field otherwise dominated by large interests, and we have tried to play that role. While foundations certainly have agendas — ours is to use information to speak for people and to be a counterweight to all the vested interests in health — it is our independence, our lack of a commercial or political interest, and our efforts to provide the most accurate information possible (both from us and others) that give us an opportunity to play a special role. We maintain a steadfast commitment to never take a position on a policy issue or to become a combatant ourselves on one side or the other in the “health care wars.”
The Foundation’s Strategy
From this basic decision about a strategic direction came most of the characteristics of the Kaiser Family Foundation today.
We are in the information, not the grantmaking business. While most foundations see their principal product as grants, we are an operating organization and ours is information — from the most sophisticated policy analysis, to basic facts and numbers, to the highest quality health journalism, to information young people can use to protect their health.
We focus our work on the major health policy issues facing the nation. This means that we do not completely control our own agenda. We need to “be there” with information and analysis and timely journalism on whatever major health policy issues are on the national agenda. We have also chosen to focus on other issues that are critically important but may not decide elections or make or break budgets or appear as frequently on the national news — such as HIV/AIDS and health disparities. Overall, we try to inform discussion and debate on major issues that affect millions of people, and to elevate the national level of debate on health issues. Our approach is almost equal parts policy analysis and communications: developing new information on national health issues, synthesizing the best information from others, and helping to explain health policy issues to an understandably confused public by ourselves and with news organization partners.
When you step back from our many projects and programs, we basically do four things: we are a producer of policy analysis on domestic and global health policy; we are a producer of public opinion and survey research, which is work for which we are well known; we are a “go to” clearinghouse, synthesizer and translator of all the best information on the issues we work on, whether we produce it or others do; and we operate a major health news service dedicated to producing the best in-depth coverage of health care and health policy called Kaiser Health News (KHN), the nation’s first not-for-profit health policy news service. KHN is a foundation program and its journalists are foundation employees, but it is also a fully credentialed news service which operates with full editorial independence. We also organize and operate large scale public information campaigns which have been recognized with multiple Emmy and Peabody awards. The most prominent current campaign is GTA – Greater Than AIDS.
We are a professional organization, staffed by experts in health policy, public opinion research, media, communications, journalism, and other areas in which we operate. To encourage an entrepreneurial spirit and avoid the internal “fiefdoms” that have historically been a problem in many foundations and think tanks, we do not have separate budgets for program areas; our uncommitted funds each year go to the best opportunities we can identify across all of our program interests (about half of our budget supports our expert staff). This has created an entrepreneurial environment which has generally served us well.
We also have a very actively involved Board of Trustees. The Trustees provide oversight, approve all major funding and investment decisions, and work closely with me to set directions and determine strategy. Board members serve two five-year terms. Because we are an operating organization, our Trustees have an extra responsibility; we are directly accountable for what we do. We also work to keep past Trustees involved with KFF: for example, by inviting them to retreat meetings.
We have a clear sense of audience: policymakers, opinion leaders and the media are our core audience, and we try to reach the general public through our news service and an increasing body of consumer information we produce, from cartoon animations explaining the Affordable Care Act to a widely used calculator that enables people to put in their zip code and some basic information to see what kind of deal they will get on an insurance policy under the ACA.
While we produce a lot of our own research and analysis, I believe that our most important contribution to the research community is as a representative, translator, explainer and information broker. Like the adage about the tree falling in the forest, studies that are only read by those of us in the policy research community who follow a particular issue will not have much impact. Much of the most relevant and timely research in health policy is never published in journals, but can be found instead in policy reports and other publications and communications put out by a small number of organizations in our field. We need more and better and constantly updated research on health issues, but even more, we need better communication of the research and policy analysis that is done.
For this reason, the Kaiser Family Foundation places a special premium on communications and uses a wide range of strategies to cut through the information overload in health. These include operating a variety of large-scale online information resources, including kff.org, our main organizational website, kaiserhealthnews.org, our free, health news service, as well as several web portals and an active social media presence for our organization as well as our experts. Our overall goal is to provide free access to the same kind of information and events insiders have to national and global audiences interested in health policy.
Our philosophy has always been to integrate communications into our program activities. This means that communication is everybody’s job at our foundation and is viewed as a central part of everything we do. The job of drafting a press release, answering a reporter’s question, designing public-service campaigns or putting something on the web is not something simply handed off to a communications officer at the end of the hall or an outside consultant; everybody is involved.
It is a fact of life that if policymakers and persons in the media don’t know who you are, they are not likely to pay much attention to what you do or say. Having a trusted “brand” was especially important to us given the role we play. And a clear identity was also important in our case to distinguish ourselves from Kaiser Permanente, with whom we have no connection, except for the founding family name we share and the occasional misdirected letters I get from the HMO’s enrollees — both disgruntled and pleased.
In 2003 we completed construction of a new building in Washington, D.C., which has added tremendously to our ability to communicate about health issues. The building was financed with very low-interest, AAA rated tax-exempt District of Columbia bonds. It is located in downtown Washington, D.C. just a few blocks from the White House and around the corner from the National Press Club. The building is the home of our Washington, D.C. offices and Washington, D.C.-based staff; our Barbara Jordan Conference Center, named after our former Trustee, which we use to facilitate discussion and debate about health issues; a fully equipped studio with the latest in broadcasting and webcasting technology; and an interactive health exhibit lobby — a street-level space designed to provide visitors with up-to-the-minute information on our programs and information. We are making our conference and broadcast facilities available to other non-profit organizations with no facilities or technical fees charged.
Thousands of events have already been held in the building since we opened it in late March of 2003.
To accomplish our goal of developing the Kaiser Family Foundation as a special and, we hope, needed information resource, we became an operating foundation and then more recently the IRS approved our switch to public charity status to better reflect the fact that in any given year, ten to fifteen percent of our operating budget comes from outside funders. They are mainly foundations and we have a particular approach to outside funding. We seek and accept outside funding only from sources who will not in any way compromise our independence or mission (and in fact may add to our work as partners), and we use outside funding primarily to support the incremental costs of time limited projects we could not otherwise undertake on our own and never to cover core operating costs which we sustain with our own endowment.
As an operating organization (operating foundation or now public charity), staff direct most of our major programs and conduct much of the work in-house. For example, foundation staff direct the Kaiser Commission on Medicaid and the Uninsured, our fellowship program for health journalists, our media partnerships with both entertainment and news organizations, and KHN, which is a foundation program staffed by foundation employees, but is editorially independent. Likewise, the many national surveys and polls on health issues we conduct each year are designed and analyzed in house, sometimes with the involvement of partnering news organizations such as The Washington Post and The New York Times.
We became an operating organization because doing so was inherent in achieving the most basic goal we set out to accomplish when we began to chart new directions in the early 1990s. The goal was to build an institution which itself played a special and hopefully permanent role as a trusted source of information on the national health care scene. Every operating program we create at Kaiser represents an investment in the development of this organizational capacity. Our purpose was and is to build an institution we felt was needed as a counterweight to health care’s vested interests and as a data-based voice for people in a health system driven by money and politics.
We have developed a broad range of partnerships with media organizations over the years, from The Washington Post and The New York Times, to NPR, USA Today, Viacom, MTV, BET, Univision, and Fox. With news organizations, we undertake joint, in-depth, special projects such as our polling projects with The Washington Post, with whom we have conducted twenty seven major survey projects. In our projects with The Washington Post and The New York Times, for example, the Foundation and the news organization pick the topics and design the survey instruments together, and then jointly analyze the results. Then, as they should, the news organizations have editorial control over the content of their reports and cover the results as they see fit, but always substantially.
One of the main ways in which Kaiser Health News distributes its content is through partnerships with news organizations. KHN, which launched June 1 of 2009, now distributes stories every day through major national news organizations with whom it works, including The Washington Post, NPR, The New York Times, USA Today, and many, many more, including a new partnership to provide health reporting for the Newshour.
Assessing Kaiser’s Role
I am often asked how we know whether our efforts are having an impact. In some cases, it is relatively easy to judge. For example, it is clear that the Kaiser Commission on Medicaid and the Uninsured has become an authoritative source of analysis and information on health care for low-income people and has played a significant role in debates about these issues, or that our Daily Health Policy Briefing on KHN is widely read and valued. In most cases, however, success or failure is more difficult to assess.
Foundations are not accountable in the traditional sense. They do not make a profit or a loss that can be evaluated by investors. Unlike government agencies, they are not constantly scrutinized by the press or by legislative bodies that must approve their programs and budgets, though in a world of instant feedback on the web and in the blogs, outside scrutiny has certainly increased. This difference gives foundations their freedom to take risks and to try new things not generally possible in the commercial or public sectors. But it also means that accountability is essentially self-imposed; the evaluation of performance and impact is a judgment call that must be made by a foundation’s board, CEO and staff.
The Kaiser Family Foundation is trying to play a special role as an independent, trusted source of information and analysis on the national health care scene, and we evaluate our performance against that objective. We believe that role is sorely needed in the health care system today, and, based on the reception our work receives; we are convinced that we are on the right course for us.
It bears noting, however, that choosing to be an information provider has real implications. First, information is costly. Analysts, policy and media and polling experts, web experts and journalists staffing a full-fledged news service all need to be paid, and it takes a real investment in in-house staff expertise to know what information to produce, how to organize it, and how to get it into the right hands. Second, even the best analysis and most balanced report can be unwelcome by those who have a special interest or an ideological point of view. We are, I would like to believe, influential and respected. But we may not be appreciated in quite the same way traditional grantmakers can be, because it is in the very nature of our mission to sometimes be inconvenient to all sides. In terms of the potential for both attention and criticism, there is a big difference between funding the work of others, and being the source of information and analysis and front page stories yourself. It is the difference between direct and indirect accountability. For foundations interested in moving in a direction similar to ours, the willingness to invest in staff capacity and expertise and an understanding that the role by its nature can bring criticism from time to time are necessary preconditions for success and peace of mind.
Finally, a philosophical comment on foundations and their role in health. An insiders’ debate has been bubbling just beneath the surface for years between those who believe that foundations should be quiet charities that support the good work of others and those who believe that foundations should play a more proactive role in whatever areas they choose to work and with whatever operating styles they chose to have. I believe that the nation is best served by having a strong independent sector and that foundations should take leadership in that sector. Nonpartisan does not mean timid or invisible, and there is no way to play a meaningful role in today’s health care system without occasionally raising someone’s ire. I also believe that society is best served by having foundations of different kinds, with different philosophies and program agendas. Foundations can be liberal, or conservative, or eclectic. But in my judgment the country is best served when they are independent and not tied to organized political or commercial interests.
The need for an aggressive independent sector and for a strong foundation role is perhaps greater in health than in any other area. In no field is there a greater need for an independent voice that is not driven by the desire to make money or to win votes. In no field would a role as simply a charity be less useful; foundation funds are a drop in the bucket in today’s $3 trillion health care system. That realization led us to become an operating foundation with a very targeted mission, and in our latest change in status, a public charity. But whether we were a private foundation in the very beginning, or a private operating foundation, or now a public charity, our mission and the core elements of our operating style have not changed.
At the same time, it is also important to be realistic about what foundations can and cannot achieve in today’s health care system. During the years I have both worked in the foundation world and viewed it from the outside, I have often felt that foundations are overly impressed with their own importance. In health, the challenge to foundations is to understand that they are bit players in a giant health care system, but also that foundations can have a unique and vitally important role to play if they make wise choices.