A Look at the Arnold Foundation's Big Push into Health Care

The Laura and John Arnold Foundation has a quite a to-do list. It wants to remake public education, reform the criminal justice system, put public pension systems back on solid ground, and improve the integrity of scientific research.

Oh, and the foundation has another little project going: Trying to fix America's bloated and dysfunctional $3 trillion healthcare system. Over the past year or so, it's made multiple ongoing grants intended to increase the quality of care delivered while reducing costs. 

Despite the changes wrought by the Affordable Care Act, the U.S. health care system remains the most expensive in the world. But all that spending doesn't necessarily translate into quality. In fact, according to a 2014 Commonwealth Fund report, the U.S. trails 11 leading industrialized countries when it comes to quality largely because the fee-for-service model of payment encourages providers to run up the meter with procedures rather than improve health outcomes overall. Crazily, there are few financial incentives for providers to actually keep people healthy. Meanwhile, most health care consumers have little incentive to comparison shop for more efficient lower cost providers.

A number of funders are taking on these perversities, as we've been reporting. Last year, for example, the billionaire Peter Peterson laid out an initial $200 million to creat a new center on health care to push for care that is both higher quality and more affordable. The Robert Wood Johnson Foundation, of course, is a massive player in this space, and a range of other funders are also in search of the Holy Grail of better health outcomes at a lower cost, such as Kresge, Moore, and Atlantic Philanthropies. 

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Apparently, though, Laura and John Arnold decided that their money could make a difference here, too, and millions have been going out to the door in healthcare grants. 

A nearly $10 million grant to Harvard is funding an interdisciplinary Health Care Markets and Regulation Lab in Boston that is launching seven studies looking at factors including payment reform, delivery of services, patient engagement and the quality of care offered. The lab will draw upon the experts of the medical, business, government and public health schools. “We hope to not only provide scientific evidence about the effectiveness of reform efforts that are underway but to speed the translation of that science into action, shaping the implementation of regulations and guiding future iterations of reforms,” said Michael E. Chernew, Ph.D. Harvard Medical School Professor of Health Care Policy, the director of the lab. “Ultimately, the goal is to create a higher quality, more efficient health care system.”

The Arnold Foundation also awarded a grant of nearly $5.7 million to the Center for Healthcare Transparency in San Francisco. The center is involved in a five year plan to collect reliable, meaningful health care performance data and make it accessible to the public. The grant is intended to “improve the quality, transparency, and efficiency of the nation's health care system.”

This grant, we should note, underscores an important thing to know about the Arnold Foundation: This funder often sees better data as a key to improving outcomes, and routinely spends big on data projects. In health care, the search for better data is particularly important since many players in the system, starting with consumers, are flying blind in terms of being able to assess quality and value. As Steve Brill shows in his new book, America's Bitter Pill, this system is a bizarre netherworld where it can be impossible to either find out what things cost or what they're actually worth. 

The Arnold Foundation also awarded a $1.4 million grant to the self-described nonprofit, nonpartisan Statistical Assessment Service in Virginia that is affiliated with George Mason University. The service routinely critiques the use of statistics in the media. This grant is intended to let the public know how valuable transparency is in clinical trials and in other scientific efforts.

In Washington, D.C., the Bipartisan Policy Center (BPC) is working with a $1.2 million Arnold Foundation grant to help with its efforts to “transition from a volume-based to value-based health care delivery system.”

The BPC Health Project is co-chaired by several Washington heavy hitters including former Senate Majority Leaders Tom Daschle and Bill Frist, MD, along with former Congressional Budget Office Director Alice Rivlin and former ranking member of the House Ways and Means Committee Congressman Jim McCrery.

All of these Arnold Foundation grants have one common aim: to improve quality and control costs in the nation's health care system. That goal is especially acute as the Affordable Care Act brings millions of new people into the system and as retiring boomers put more stress on Medicare.