Kaiser Foundation to Seek U.S. Health Care Overhaul

In an unprecedented expression of frustration with the state of the health care system in the United States, one of the country’s largest charitable trusts specializing in health has decided to concentrate almost exclusively on reforming government health programs.

The $100-million, five-year initiative by the Henry J. Kaiser Family Foundation of Menlo Park to help revamp programs such as Medicaid, Medicare and school lunch programs defies the longtime uneasiness of many foundations with activities that might be seen as political.

The shift in direction, endorsed by the foundation’s board at its most recent meeting, reflects the increasingly common view that the U.S. health care system is failing and that its rescue will be impossible without significant reform of government-run programs.

“You can’t operate in today’s health care world effectively without quickly seeing that the main ballgame is government,” said Drew Altman, the foundation’s president. “Government policy and financing drives our health care system. And it’s not doing it well enough.”

As part of the initiative, the foundation will fund research into better ways of running existing programs. For example, the foundation and its researchers might work with government agencies to try to apply the principles of health maintenance organizations (HMOs) to the Medicaid insurance program for the poor.

Specifics of the programs are not developed, but Kaiser officials believe a foundation, unlike the government, can afford to take risks and make mistakes. They are optimistic that the ideas that prove successful will be embraced by overburdened government agencies.

While philanthropic organizations in the past have tried to influence policy by supporting programs outside government, observers could cite no instance in which a foundation took it upon itself to try so broadly to make government work better in a field such as health.

“It will have big symbolic importance,” said Robert Blendon, chairman of the department of health policy and management at the Harvard School of Public Health. “They are trying to reverse the idea that philanthropic organizations should mirror the popular prejudice that it’s hopeless” to expect government to work.

“It’s an adventuresome step,” said Steven A. Schroeder, president of the Robert Wood Johnson Foundation, the nation’s largest trust in the health field. “The foundation is being very courageous in articulating such a direct goal. We certainly hope they’re successful.”

The Kaiser foundation is one of the largest trusts in the health field. Last year, it gave out more than $23 million in grants. Its focus recently has been community-based health-promotion programs, increasingly targeted to low-income and minority Americans.

At a meeting in Carmel on March 15, the foundation’s trustees approved what appeared to be a frontal assault on existing government programs--a campaign to help reshape federal and state programs to make them more responsive to public health needs.

“There are limits to what voluntarism and community action can accomplish when we’re talking about big, systemic problems like the uninsured and controlling health care costs,” said Altman, a political scientist and former human services chief for New Jersey.

Others ideas under discussion include working with school districts to revolutionize school lunch programs, bringing more minorities into top public-health jobs and changing the federal nutrition program for women and children.

“We have a health care system which by anybody’s account is not doing the job and is out of touch with the needs of the population,” Altman said. “There is this huge gap between the real needs of the American people and what we do in health care in this country.”

As examples of problems, Altman cited the accelerating cost of health care, the more than 30 million Americans without health insurance, an aging population and the proliferation of behavior-based health problems such as teen-age pregnancy, smoking and drug abuse.

The board also approved an initiative to give special preference to supporting innovative health programs in California. This could include attempts to insure the uninsured and approaches to reforming Medi-Cal, Altman said.

Foundations have long been leery of becoming involved in public policy issues, according to John Edie, general counsel to the Washington-based Council on Foundations. One reason has been fear of jeopardizing their tax-exempt status by seeming to be lobbying.

“It’s a fairly major step to get a board of directors to say, ‘OK, let’s not just fund the symphony and the Red Cross and the hospital, let’s get involved in public policy issues and try to influence them,’ ” Edie said.

People inside and outside Kaiser traced the move to a recognition of the problems that have beset the health care system, and to the past experiences of Altman and the trustees, many of whom have served in federal and state government.

The board’s chairman is Hale Champion, a former undersecretary of the U.S. Department of Health, Education and Welfare and former director of finance for California. Former HEW Secretary Joseph Califano recently completed his term on the board.

“Almost everybody on the Kaiser board, as well as Altman, knows that when we were in government we were looking for this kind of help,” said Champion, now a lecturer at the John F. Kennedy School of Government at Harvard.

The Kaiser foundation was set up in 1948 by industrialist Henry J. Kaiser, who was also the founder of Kaiser Permanente Medical Care Program, the health maintenance organization. The foundation is entirely separate from the HMO.