Who's Funding to Contain Healthcare Costs?

Reining in healthcare spending is a key goal of the Affordable Care Act, which, among other things, is putting the squeeze on Medicare reimbursements in a big way. In California alone, more than 400 acute-care hospitals are expected to lose about $17 billion for this reason by 2022. Meanwhile, the screws will keep turning on Medicaid if national and state Republican lawmakers have any say in the matter. Overall, pressure is mounting on all players in the healthcare system to provide more and better care at a lower costs. 

A number of foundations are deeply committed to advancing new ways to contain healthcare costs. Predictably, the Robert Wood Johnson Foundation is the 900-pound gorilla in this space, funding a range of efforts to reduce cost and boost quality. It's attacking the fee-for-service payment paradigm, which produces astonishing waste as self-interested healthcare providers run up the meter. And it's pushing for reforms to reduce spending on less effective medical treatments. RWJF is also pushing for more investments in prevention and creating what it calls a "culture of health," which it believes will do wonders to contain healthcare costs over the long-term. 

But several small foundations are also doing meaningful work in the cost containtment realm. 

The Washington, D.C.-based Commonwealth Fund immediately springs to mind. Their grants have been fairly modest, so far, but they’ve been regular. And their aim is clear. In 2011, Commonwealth gave $441,681 to the President and Fellows of Harvard College, to help identify the factors linking high-cost Medicare beneficiaries and find out what components of care may be preventable. In 2012, $462,731 went to the Center for Health Care Strategies, Inc., to support Promoting Integrated Care for Dual Eligibles (PRIDE), a team-based initiative linking seven high-performing health plans and their strategies for cost containment. And with Commonwealth’s open-door policy for upstart initiatives, there’s no telling where their giving will take them in the future.

Another daring foundation taking on health care cost containment is the New York State Health Foundation. It's made a number of grants since 2009 to organizations taking on health care cost containment in different ways, and earlier this year, it backed a promising effort to reduce the costs of treating childhood asthma in New York—which runs to over a half billion public dollars annually in New York State. The idea behind the initiative is simple: Better interventions to reduce the pest-related indoor allergens that trigger and exacerbate asthma could end up saving a big bundle of healthcare dollars (not to mention reduce a lot of suffering and save kids from missing school).

Other local funders are on top of the cost containment issue, too, such as the Colorado Health Foundation. In addition to the work it's doing in Colorado, the foundation has helped fund efforts to educate state legislators on the options available for containing healthcare costs. 

An increasing number of funders grasp a simple fact: Anyone interested in expanding healthcare access also needs to be focused on containing costs so the dollars can be stretched to cover everyone.