A MESSAGE FROM THE PRESIDENT

DAVID BLUMENTHAL, M.D.

Last year, I ended my annual message by noting: “In the coming months, elections will transform the nation once again, with still unforeseeable consequences for the U.S. health system.”

Well, the 2016 national elections have come and gone, and the long-term consequences for U.S. health care are still potentially profound and uncertain. As I write, Congress debates repeal of the Affordable Care Act, or ACA. Most of the proposals for its replacement would leave many Americans less confident about their health care and financial security.

Meanwhile, new threats from foreign powers, continuing terrorist incidents, global hacking events, and even the latest projections for climate change leave many of us feeling uneasy—as if we walk on trembling ground.

At times of dramatic change, fear and anxiety can become pervasive and overwhelming. Troubling visions of authoritarianism or chaos, of political persecution, and even civil war disturb our waking thoughts and nightly dreams. It can be emotionally, almost physically, paralyzing.

As Mark Twain allegedly quipped, "History doesn’t repeat itself, but it often rhymes." Looking for those historical rhymes can provide perspective at times of disquiet. This may be particularly true for younger members of our attentive public, who have not lived through, and emerged safely from, some of the dark periods we have experienced as a country.

America’s 241 years of nationhood have been tumultuous. Events have repeatedly challenged the viability of our democracy. In the Civil War, an estimated 650,000 Americans died, the equivalent of 1 in 43 citizens. During the Great Depression, unemployment reached 25 percent, compared to 10 percent at the height of the 2007–2009 recession. Economic pain gave rise to extremist movements. Communism and fascism both had large followings in the United States, as they did in Europe.

World War II constituted a truly mortal threat to the future of Western civilization. From 1939 to 1942, the allies suffered repeated defeats at the hands of fascist forces. Nevertheless, except for the shameful internment of Japanese Americans, our democratic institutions continued to function, with regular elections and the rule of law.

In the turbulent 1960s, a president, a presidential candidate, and leading civil rights leaders and activists were assassinated. Inner cities burned. A protracted, bloody war in Southeast Asia divided and demoralized the nation.

And in the ‘70s, when a rogue White House burgled the offices of the opposing party and the president ordered a cover-up, the media, Congress, and the judiciary combined to force his resignation.

Varied as these events were, they show how frequently crises test our nation, and how resilient our democracy has proven over time. They also show how important it is for defenders of our freedoms to remain vigilant. No civilization—no matter how mighty or seemingly stable—is invulnerable.

Only the values and courage of a free citizenry and its leaders can assure that we continue to rise to the challenges we will inevitably encounter.

A critical role in preserving our values and our institutions falls to the nongovernmental bodies that constitute our civil society. These include our houses of worship, our schools and universities, and our many charitable and philanthropic organizations. The Commonwealth Fund is one of these.

As an endowed philanthropy, The Commonwealth Fund has for 99 years enjoyed the extraordinary privilege of economic independence. Currently, the Fund is dedicated to creating a high-performance health system in the United States. The principal way we work to achieve that mission is by conducting and supporting research that produces evidence—facts—to focus reforms that will help more people afford high-quality health care.

In service of that mission, in 2016 we continued to track the rollout of the ACA, and documented historic progress in the numbers of Americans with health coverage and the ability of people to buy health insurance on their own.

We teamed with four other foundations to create a new resource for health professionals—The Playbook—dedicated to providing better care for the sickest and frailest among us, who also drive most of the spending in our health care system.

We examined the health care proposals of the presidential candidates and, after the election, looked at the likely effects of ACA repeal and replacement.

We released the latest in our health system scorecard series, which found great improvement in access to care but wild variation in progress among local communities.

We continued to promote learning from abroad through our case studies of health care delivery models, from programs helping the sickest and costliest patients to frugal innovations pioneered by developing countries.

In this report, you will learn more about these and many other projects, the people and communities who benefit, and the dedicated individuals who do the work.

As The Commonwealth Fund nears completion of a century of action in pursuit of a high performing health care system for all Americans, we commit to a redoubling of our efforts. To the Fund, that means providing an objective, evidence-based view of our health care system. It means identifying and supporting new and effective models for improvement. And it means striving for consensus and innovation rather than yielding to partisanship and the status quo.

Focus on High-Need, High-Cost Patients

Learning Who They Are and How They Experience Care The people with the highest need for health care—and with the highest health costs—are often adults dealing with multiple chronic conditions and, sometimes, disability and functional limitations as well. While nearly all of these patients have consistent access to health care, a 2016 Commonwealth Fund survey showed that many struggle to get the range of coordinated medical, behavioral, and social services they require to stay well. Shortcomings in primary care for high-need, high-cost patients are a major concern in all advanced nations, as Commonwealth Fund researchers found.

Reaching consensus on action In December, five national health care foundations launched a new collaboration to transform care delivery for the high-need, high-cost population. Writing in the New England Journal of Medicine, leaders from the Commonwealth Fund, John A. Hartford Foundation, Robert Wood Johnson Foundation, Peterson Center on Healthcare, and SCAN Foundation announced they will develop resources and tools to meet three urgent goals: understanding this diverse population, identifying evidence-based programs that offer high-quality integrated care at a lower cost, and accelerating the adoption of these programs nationally.

Creating a playbook for providers Conceived by the five-foundation collaborative and developed by experts at the Institute for Healthcare Improvement, The Playbook: Better Care for People with Complex Needs is a new digital resource for health system leaders and insurers to improve care for the high-need, high-cost population. The website offers insights about patients with complex needs, examples of successful approaches to care, guidance on making the business case for these models, and information about opportunities for policy and payment reform.

Highlighting promising care models To show how new approaches to care delivery can simultaneously improve outcomes for patients with complex needs and rein in health spending, The Commonwealth Fund profiled nine innovative models across the U.S. that are achieving results. Hear the stories of people helped by these programs and learn about each one’s key features, financing mechanisms, and early impact on patient experiences, health care use, and costs.

The Affordable Care Act’s Impact: Just the Facts

It has been more than seven years since enactment of the Affordable Care Act, or ACA, the most significant U.S. health reform legislation in half a century. During that time, The Commonwealth Fund has monitored the law's implementation at the state and federal levels and tracked its impact on Americans’ health coverage and access to care.

Measuring Progress on Coverage and Access The Commonwealth Fund’s 2016 Biennial Health Insurance Survey found the number of uninsured working-age adults had declined to 23 million, from a high of 37 million in 2010. While states expanding Medicaid realized the biggest declines, even residents of states not expanding experienced gains in coverage. Perhaps most important, 61 percent of people who have used their ACA insurance are getting care they previously would not have been able to afford or access, as the Fund’s ACA Tracking Survey found. “Providing timely access to care is the fundamental purpose of insurance, and in this regard the law is working well,” said the Fund’s Sara Collins.

Assessing AffordabilityCoverage has also become more affordable for many Americans. In 2010, 60 percent of consumers shopping for individual coverage were not able to find an affordable plan; in 2016, that was down to 34 percent. Other Fund research found the law’s tax credits have made premium costs for people with low and moderate incomes roughly comparable to costs in employer plans.

Quantifying Economic Effects Despite concerns that the ACA’s changes would cost jobs or accelerate health care inflation, evidence shows the law has likely helped stimulate growth by contributing to a slower rise in health care costs. Additional analysis indicated ACA repeal could lead to economic disruption and substantial job losses in every state.

Assessing Health Reform Alternatives To assess alternatives to the ACA, The Commonwealth Fund commissioned the RAND Corporation in early 2016 to analyze the CARE Act—at the time, the most comprehensive replacement plan offered. RAND found the proposal would raise the deficit while substantially increasing the number of uninsured people. RAND also estimated the impact of Hillary Clinton and Donald Trump’s health care proposals; an online tool enabled users to compare features of the two candidates’ plans.

Medicaid and the Safety Net: What’s at Stake

Understanding Medicaid’s ImportanceCovering more than 73 million low-income children, working adults, and older people, Medicaid is the nation’s largest insurer. The program doesn’t just provide a comprehensive set of health care benefits; it also supports safety-net hospitals and providers, boosts state economies, and fosters improvements in the way care is paid for and delivered throughout the health system. Commonwealth Fund experts highlighted the multifaceted role Medicaid plays on the To the Point blog and a slideshow explainer.

To Expand or Not Expand Kentucky achieved singular success under the ACA. Since the state expanded Medicaid and implemented an effective enrollment campaign, some 428,000 residents have gained Medicaid coverage. But under a new governor in 2016, Kentucky began to dismantle its Kynect marketplace and make changes to its Medicaid program. Commonwealth Fund–supported researchers documented Kentucky’s successes in expanding affordable access to care and broke down the proposed changes to Medicaid and what they could mean for Kentucky residents.

Assessing Reform Proposals Other Fund-supported research in 2016 examined the potential effects of congressional proposals to block-grant Medicaid or otherwise scale back the program. George Washington University’s Sara Rosenbaum has argued that abandoning the flexible financing approach of the past 50 years would divorce Medicaid funding from the real-life needs of low-income Americans.

Health Trends: Probing Deeper

Local Scorecard Documents ImprovementThe 2016 edition of The Commonwealth Fund’s Scorecard on Local Health System Performance found that while many U.S. communities saw gains in their health and health care between 2011 and 2014, wide variation in progress indicated plenty of room for improvement across the country. Those areas of the U.S. that improved did so largely because more people had insurance coverage and could afford to get the care they needed, and because health care providers performed better on quality and efficiency measures—such as limiting hospital readmissions.
White Mortality: The Untold StoryA lack of progress since 1999 against common illnesses such as heart disease, diabetes, and respiratory disease was largely responsible for higher-than-expected death rates for middle-aged white adults in 2014, according to a Commonwealth Fund analysis from January 2016. While substance abuse and suicide rates increased during the same period, they did not increase enough to explain why death rates for this group have deviated from their historical decline.
Primary Care Doctors Speak UpAbout one-third of U.S. and U.K. primary care physicians are dissatisfied with their jobs, according to a recent Commonwealth Fund survey. To help understand some of the day-to-day challenges they face, Harvard Medical School’s Gordon Moore, M.D., interviewed nearly two dozen doctors in the two countries about their experiences with managing their sickest patients, using health information technology, and coordinating care outside office settings. Read their stories in this feature article from May 2016.

Empowering Patients Through Technology

The Promise of Mobile Health Apps Some 165,000 mobile health applications are available to help patients manage everything from diabetes to depression while also allowing them to engage with their peers. But therein lies the problem: the choices are overwhelming, and quality is highly variable. In a December 2016 interview, Commonwealth Fund grantee Karandeep Singh, M.D., who proposed a framework for evaluating the effectiveness and safety of patient-facing mobile health apps, discussed the potential for apps to help patients self-manage their conditions, the limitation of consumer ratings, and the importance of robust privacy policies.
Envisioning a Digital Health AdvisorEven as the digital revolution sweeps through our daily lives, our interactions with the health care system have changed little. The Commonwealth Fund’s Eric C. Schneider, M.D., Onil Bhattacharyya, M.D. and David Blumenthal, M.D., explained how a “digital health advisor” might help people with their health-related needs and provide guidance through the maze of the American health care.
Making Health Data Useful to PatientsTo ensure that patients can access and share their digital health information as needed, experts say the continued development of application program interface technologies, or APIs, will be critical. A post on To the Point from December discussed how openly accessible APIs can help consumers retrieve their digital health information without restriction or cost—a capability that could ultimately lead to better health, better care, and smarter spending.

The Cost of American Health Care

On Medicare But At RiskWhile Medicare provides essential coverage to seniors and people with disabilities, there are no limits on out-of-pocket costs. A Commonwealth Fund issue brief found that one of four Medicare enrollees, or 11.5 million people, were underinsured in 2013–14, meaning they spent a high share of their income on medical costs. Another Fund-supported study, published in Health Affairs, found that more than half of beneficiaries went without a dental visit in the past 12 months, and only 12 percent had any kind of dental insurance.
Doing Better on Drug PricesOpinions differ on whether the federal government should do more when it comes to controlling prescription drug prices. But, in fact, certain public programs already employ a number of effective tools for reducing the prices of drugs they purchase. Commonwealth Fund experts reviewed current approaches to prescription drug pricing and discussed pricing changes proposed for Medicare Part B.
How Spending Relates to Quality When it comes to health care, spending often has little to do with quality. Moreover, spending varies widely by region and locality. To enable comparisons of the “relative value” of health care across the U.S., The Commonwealth Fund updated its Quality–Spending Interactive in 2016.

Looking Abroad

U.S. Health System an OutlierAlthough there has been significant improvement since 2013, the latest Commonwealth Fund international health care survey found that one-third of U.S. adults went without recommended care, did not see a doctor when sick, or failed to fill prescriptions because of the cost—a far higher proportion than in other high-income countries like the U.K., Germany, the Netherlands, and Sweden. Americans are also far more likely than their counterparts abroad to go without needed health care because of costs and to struggle to afford basic necessities such as housing and healthy food. The survey findings were published in Health Affairs.
Frugal But EffectiveCountries around the world are looking to reduce the need for costly hospital services while also expanding access to health care. In Brazil, health system leaders believe they’ve found a solution: the Family Health Strategy, a program that aims to provide integrated primary care in low-income areas by deploying multidisciplinary professional teams assisted by community health workers. The program, which costs $50 per person each year, has reduced mortality and improved equity and access. Could a similar model work in the U.S.? Learn more in The Commonwealth Fund’s multimedia feature.
Improving Care for the Elderly, the Swedish Way Treating elderly adults with complex needs is a challenge all health systems face. Two promising programs from Sweden profiled by The Commonwealth Fund in 2016 show how it’s possible to provide frail seniors with effective and responsive care. One innovation, called the Esther Model, was inspired by the harrowing health care journey of a real patient. With the question “What is best for Esther?” always in mind, the program emphasizes treatment in the home or close to home; information-sharing across providers; and continuous quality improvement. Senior Alert, meanwhile, is a national preventive care dashboard for the elderly that helps identify and lower health risks. The program has succeeded in reducing falls among Swedish seniors and improving pressure ulcer rates and weight maintenance.

Taking on the Issues of the Day

In 2016, The Commonwealth Fund’s To the Point blog published analysis and commentary from leading experts on some of the biggest stories and trends in health and health care. Here’s a small sampling:
Caring for Flint: Medicaid's Enduring Role in Public Health Crises In response to widespread lead contamination in the city of Flint’s water supply, Michigan governor Rick Snyder requested emergency federal funding to expand eligibility for Medicaid coverage. George Washington University's Sara Rosenbaum argues that Medicaid’s role in addressing the catastrophe should remind Americans about the program’s central role in the public health system.
Closing the Equity Gap in Health Care for Black AmericansAs Americans focus on troubling racial divisions in the country’s criminal justice system, The Commonwealth Fund’s Pamela Riley, Susan L. Hayes, and Jamie Ryan point out that those divisions are present in health care, too. The authors examine the ways in which the U.S. health system fails black Americans, who are substantially more likely than whites to die early from health conditions that are often treatable or preventable with timely and appropriate medical care.
Value-Based Drug Pricing: Watch Out for Side Effects If value-based pharmaceutical pricing were in place, drugmakers would get paid based on the benefits their products provide to patients and society, rather than simply on their production costs. As this new payment model starts to gain traction, Commonwealth Fund President David Blumenthal, M.D., asks how much a currently inexpensive drug like penicillin would cost under this system. He calls for a cautious approach.
Physician Dissatisfaction: Diagnosis and Treatment By some accounts, American physicians are severely stressed and unhappy, and such dissatisfaction could--at least theoretically--undermine their diligence, cognitive functioning, and relationships with patients, write David Blumenthal, M.D., and David Squires. Yet even if the crisis is overstated, the authors say there are reforms that could improve physician well-being.

LEADERSHIP & STAFF

Lois Quam and Laura Walker Elected to Board of Directors

Lois Quam, CEO of Pathfinder International, a champion for sexual and reproductive health and rights worldwide, was elected to The Commonwealth Fund’s Board of Directors in July 2016. She began her term in April 2017.

Since 1957, Pathfinder has partnered with local governments, communities, and health systems to expand access to contraception, promote healthy pregnancies, save women’s lives, and stop the spread of new HIV infections. Quam joined the organization in February 2017 after serving as the Nature Conservancy’s chief operating officer.

From 2011 to 2014, Quam was a special advisor to Secretary of State Hillary Rodham Clinton. She launched and led President Barack Obama’s Global Health Initiative, working on solutions to health challenges facing people across 80 countries. She has also held executive positions with UnitedHealth Group and on three occasions was named one of Fortune’s “50 Most Powerful Women in American Business.” A former Rhodes Scholar, Quam earned a B.A. and M.A. from Oxford College and a B.A. from Macalester College.

“Lois Quam brings to The Commonwealth Fund’s Board a wealth of experience in health care coverage and delivery in both the private and public sectors,” said Commonwealth Fund Board Chairman Benjamin K. Chu, M.D., at the time of Quam’s appointment. “Her insights will be invaluable to informing our deliberations as the Fund continues its work to move the U.S. to a high performance health system.”

Laura Walker, president and CEO of New York Public Radio, also joined The Commonwealth Fund’s Board of Directors in April 2017. Under Walker’s leadership, New York Public Radio’s audience has grown from 1 million to 23.9 million monthly, and more than $100 million has been raised for long-term investment.

In 2008, Walker received the Edgar R. Murrow award from the Corporation for Public Broadcasting, the industry’s highest honor. She also received a Peabody Award for Broadcast Excellence during her tenure as a producer at NPR.

“We are fortunate to have Laura Walker join our Board as The Commonwealth Fund pursues its goal of ensuring our health care system can provide high-quality care to everyone, especially the most vulnerable in our society,” said Commonwealth Fund President David Blumenthal, M.D.

Earlier in her career, Walker worked at Carnegie Hall, the Sesame Workshop, the Boston Consulting Group, and Eurasia Press, as well as in print journalism. She graduated with a B.A. in history, magna cum laude, from Wesleyan University, and has an M.B.A. from the Yale School of Management.

Jane Henney and Robert Pozen Retire from Board

Two long-serving Commonwealth Fund directors retired from the Board in July 2016.

Jane Henney, M.D., who joined the Fund’s Board in 2001 and chaired its audit and compliance committee, was “a terrific advocate for governance as a key attribute of effective philanthropy,” said Commonwealth Fund President David Blumenthal, M.D. Henney served as the commissioner of the U.S. Food and Drug administration from 1998 to 2001 and earlier was deputy director for the National Cancer Institute.

Henney’s many academic leadership positions have included senior vice president and provost for health affairs at the University of Cincinnati, vice president for health sciences at the University of New Mexico, and vice president for health programs at the University of Kansas Medical Center. In 2014, she became the National Academy of Medicine’s home secretary.

Robert C. Pozen also joined The Commonwealth Fund’s Board in 2001 and was a key member of the investment committee. The chairman emeritus of MFS Investment Management, the oldest mutual fund company in the United States, he was critically important in helping the Fund navigate smoothly through the treacherous waters following the 2008 U.S. financial crisis.

Pozen has a long record of public and nonprofit service, including tenures as Secretary of Economic Affairs for the state of Massachusetts under Governor Mitt Romney and member of President George W. Bush’s Commission to Strengthen Social Security, for which developed two models for closing the program’s deficit. He is a senior lecturer at the MIT Sloan School of Management and a senior fellow at the Brookings Institution.

Shawn Bishop and Lovisa Gustafsson Join the Fund’s Staff

Shawn Bishop was named The Commonwealth Fund’s new Vice President for Cost Control and Medicare in February 2016. Bishop oversees two programs: Controlling Health Care Costs, which monitors and analyzes spending in the public and private health care sectors; and Advancing Medicare, which identifies ways the Medicare program can better serve its beneficiaries and perform as a testbed for health system improvement.

A former senior vice president of research with the Marwood Group, a health care consultancy, Bishop has held a variety of posts at the Congressional Budget Office and the Centers for Medicare and Medicaid Services. Earlier, as a U.S. Senate Finance Committee staff member, she advised on legislation and policy oversight related to Medicare Advantage, Medicare Part D, comparative effectiveness research, and health care reform. She also developed and negotiated major provisions of the Affordable Care Act and other key health legislation.

Lovisa Gustafsson joined The Commonwealth Fund in September 2016 as the program officer for Breakthrough Health Care Opportunities. She is responsible for developing and managing all aspects of the program, identifying new breakthrough opportunities, and developing a strategy to build on initiatives already under way.

Prior to joining the Fund, she was a senior vice president for the Marwood Group, for which she managed outsourced private equity due diligence and strategy consulting engagements. She has also held positions with McKesson, Kaiser Permanente, the Commonwealth of Massachusetts Office of Medicaid, and Avalere Health.

FULL STAFF LIST

BOARD OF DIRECTORS

Benjamin K. Chu, M.D., Chairman

Dr. Chu is president and CEO of Memorial Hermann Health System and former executive vice president of Kaiser Foundation Hospitals and Health Plan, Inc.

Cristine Russell, Vice Chairman

Ms. Russell is an award-winning freelance journalist who has written about science, health, and the environment for more than three decades.

Maureen Bisognano

Ms. Bisognano, a prominent authority on improving health care systems, is president emerita and senior fellow of the Institute for Healthcare Improvement.

David Blumenthal, M.D.

Dr. Blumenthal is president of The Commonwealth Fund. Prior to joining the Fund in 2013, he was the Samuel O. Thier Professor of Medicine at Harvard Medical School and Chief Health Information and Innovation Officer at Partners Healthcare System in Boston. From 2009 to 2011, he served as U.S. National Coordinator for Health Information Technology.

Mitchell J. Blutt, M.D.

Dr. Blutt is founder and chief executive officer of the health care investment firm Consonance Capital. He is also clinical assistant professor of medicine at Weill Cornell Medical College and the Graduate School of Medical Sciences of Cornell University.

Sheila P. Burke, R.N., M.P.A., FAAN

Ms. Burke is a faculty member and former executive dean at the Harvard Kennedy School of Government.

Michael V. Drake, M.D.

Dr. Drake, a physician-scientist, administrative leader, and teacher, is the 15th president of Ohio State University. He is a former chancellor of the University of California, Irvine.

Margaret A. Hamburg, M.D.

Dr. Hamburg, former commissioner of the U.S. Food and Drug Administration, currently serves as foreign secretary for the National Academy of Medicine (formerly the Institute of Medicine) and sits on several other boards and advisory committees.

Kathryn D. Haslanger

Ms. Haslanger, who has spent more than 30 years in health care policy, research, and delivery, is chief executive officer of JASA (Jewish Association Serving the Aging), a New York-based nonprofit.

Lois Quam

Ms. Quam is the chief executive officer of Pathfinder International and is on the faculty at Columbia University’s Mailman School of Public Health.

Mark D. Smith, M.D.

Dr. Smith is a member of the clinical faculty of the University of California, San Francisco, and an attending physician at the Positive Health Program for HIV/AIDS care at San Francisco General Hospital. He was the founding president and chief executive officer of the California HealthCare Foundation.

Simon Stevens

Mr. Stevens is the CEO of National Health Service, England. He previously served as executive vice president of UnitedHealth Group.

Laura Walker, M.B.A.

Ms. Walker is president and chief executive officer of New York Public Radio.

William Y. Yun

Mr. Yun is president of Franklin Templeton Investments and president of Fiduciary Trust, with overall responsibility for all investment management and research activities.

BOARD COMMITTEES

Executive & Finance

Benjamin K. Chu, M.D., Chairman

Maureen Bisognano

David Blumenthal, M.D..

Cristine Russell

William Y. Yun

Sheila Burke

Audit & Compliance

Sheila Burke, Chairman

Kathryn Haslanger

Mark Smith, M.D.

Laura Walker

William Y. Yun

Investment

William Y. Yun, Chairman

Maureen Bisognano

David Blumenthal, M.D.

Mitchell Blutt, M.D.

Benjamin K. Chu, M.D.

Lois Quam

Simon Stevens

Governance & Nominating

Cristine Russell, Chairman

David Blumenthal, M.D.

Sheila Burke

Benjamin K. Chu, M.D.

Michael V. Drake, M.D.

Margaret Hamburg, M.D.

2016 ANNUAL REPORT

2016 ANNUAL REPORT

A MESSAGE FROM THE PRESIDENT

DAVID BLUMENTHAL, M.D.

HIGHLIGHTS FROM THE YEAR

FINANCIALS

GRANTS

LEADERSHIP & STAFF

BOARD OF DIRECTORS

BOARD COMMITTEES

Executive & Finance

Audit & Compliance

Investment

Governance & Nominating