A LETTER FROM THE PRESIDENT

David Blumenthal, M.D.

In The Commonwealth Fund’s third annual report——published in 1921——Barry C. Smith, the Fund’s long-time general director, described a dilemma that continues to vex those of us who work in philanthropy to this day. “The intelligent disbursement of the income from a large endowment...to achieve constructive results in terms of the welfare of humanity is not altogether the simple problem which it might appear to the uninitiated observer,” Smith said. This is an understatement.

Smith laid out a number of questions the Fund’s Board of Directors asked to help assess the value of potential grants——questions that still resonate. They touched upon the likely impact of the project, the urgency and financial need, and the extent to which the project would create better coordination, economy, and efficiency in an existing field. In my third year leading The Commonwealth Fund, I find those questions instructive. But one of the greatest challenges we face in developing our strategy has to do with the balance between investing in short- and long-term results. We must do both.

The early 20th century Commonwealth Fund sought this balance as well: providing grants that helped build the nation’s health care infrastructure, for example, through the construction of rural hospitals——many of which are still operating——but also addressing emergent needs, such as relief to European nations struggling to recover after World War I.

The nature of the U.S. health care system still dictates that the Fund aim for a diversified portfolio of projects with both long- and short-term targets. In the short term, we are trying to find ways to have a positive effect on policy and people today——and in ways that allow us to gauge the impact we are having in weeks or months. At the same time, fundamental forces continue to shape long-term outcomes that we have the opportunity to influence as well.

In the short term, we can and do make valuable contributions through research into how the Affordable Care Act (ACA) is affecting Americans, how to extend health care coverage to more people, how various legal and regulatory decisions may impact coverage, and possible constructive alternatives. These are the challenges taken on by our Health Care Coverage and Access program.

With a longer-term perspective, we are also studying how the ACA and other public- and private-sector drivers are changing the way care is delivered and paid for, and whether these changes are leading to improved health outcomes and better value. Ferreting out models with the greatest promise——by tracking the impact of accountable care organizations, for example——and helping to spread those that work is the goal of our Health Care Delivery System Reform program. That program focuses on two groups whose care experiences matter so much to overall health system performance: patients with complex, costly health care needs, and those with low incomes.

Similarly, our Breakthrough Health Care Opportunities program aims to identify, assess, and shape new ideas with the potential to significantly transform our health care system in positive ways.

Finally, our International Health Policy and Practice Innovations Program is working to highlight effective frontline care delivery models, in both high- and low-income countries, and facilitate their adoption in the United States.

These long-term commitments are part of The Commonwealth Fund’s mission to achieve a high-performing U.S. health care system. I invite you to read through the various sections of this report to get a better sense of how we go about this work.

Transitions at the Fund

The last year marked some important transitions for The Commonwealth Fund, and an annual report is an appropriate place to mark them.

First, in November, Dr. Benjamin Chu succeeded James R. Tallon as Chairman of the Board of Directors. Jim’s Board service began in 1996, and he spent seven years as chair. Building on a remarkable career——first as legislator and majority leader in the New York State Assembly, and later as president of the United Hospital Fund of New York——Jim was enormously generous with his wise counsel and his time. He was an indispensable source of support for the Fund’s work during a period of immense change in the U.S. health system.

Second, Cathy Schoen retired as Senior Vice President for Policy, Research and Evaluation in June, after nearly 20 years at The Commonwealth Fund. Over those two decades, Cathy was critical to the foundation’s success, and her impact on the field of health policy was immense. She served as the research director of the Fund’s Commission on a High Performance Health System from its inception until its sunsetting in 2013. Her work included the development and oversight of surveys; authorship of a rich array of reports comparing health system performance across countries and U.S. states and localities; and leadership of policy analyses to improve the performance of the U.S. health system, including assessing options to “bend the curve” of U.S. health care spending. In 2006, Cathy launched the Fund’s National Scorecard initiative and went on to develop state, local, and low-income scorecards that profile and compare health system performance across the United States. The scorecards are widely used and contribute to our understanding of variability in the country’s health care and its potential to improve.

Finally, John E. Craig retired as Executive Vice President and Chief Operating Officer at the end of the year. John arrived at The Commonwealth Fund in 1981, which means that he was here for more than a third of the foundation’s existence. He served under three of the Fund’s six presidents, but his impact on the foundation-both short- and long-term-and on the greater field of philanthropy was as significant as that of any one of them.

John was an integral part of every major decision, every program, and every success the Fund had over those 33 years. His integrity, his commitment to accountability and transparency, his fiscal stewardship of the foundation’s endowment, and his extraordinary gift for balancing the reward and risk of both programmatic and financial investments truly made The Commonwealth Fund what it is today.

In one of his widely read annual essays, John——like Barry C. Smith in 1921——posed the questions a foundation should ask to measure its success: Has our work added value? Have our investments made a difference? Even in John’s absence, these are challenges that continue to guide our decisions every day.

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