A Billionaire's Policy Center Aims to Transform U.S. Healthcare. How's It Going?

The Peterson Center on Healthcare has big plans for transforming healthcare in America. It's looking to improve quality while lowering costs by bringing out the best in doctors, health systems, insurers, patients and employers. The center, established in late 2014 with an initial $200 million gift by the foundation of Peter G. Peterson—who made his fortune in private equity—is seeking to do this by finding innovative solutions and "accelerating their adoption on a national scale."

The Peterson Center is an active grantmaker and works with a range of partners, including universities, healthcare organizations, and other foundations. While healthcare seems like a depressing topic right now— with Washington bitterly divided over the future of the Affordable Care Act—the Peterson Center sees a glass half full. "The good news is that there are many opportunities to transform American healthcare into a high-performing system that provides higher quality care at a lower cost," it says. 

Led by executive director Jeff Selberg, who has four decades of experience as a healthcare executive, the center works "downstream" from the national and state policy levels—focusing on what it calls "the practice side." 

"Other funders would rather be upstream with the research," Selberg tells me. "Syncing up the policy and the practice is critical, and what Peterson does well is practice."  

This means working in the weeds of healthcare systems, looking for what works to improve quality and lower cost. Selberg says, hopefully, "We don't have to invent anything. Our segment is: Let's get into the practice of spreading these great programs." To date, the center has funded work in seven areas, including primary care, high-need patients, patient engagement, better data use and monitoring healthcare performance through patient outcomes.

Because primary care is the front door to the healthcare system for nearly everyone, the Peterson Center made this area a major focus early on. It backed a team from Stanford University’s Clinical Excellence Research Center that highlighted 10 features of primary care practices that deliver "higher-quality care at a lower-than-average total cost." Among other things, researchers found that patient health was better and staff burnout levels were lower as a result of such practices. 

The Peterson Center plans to use the Stanford team's findings to create and package a primary care practice model. While the Peterson Center hasn't issued any RFPs yet for this work, Selberg tells Inside Philanthropy the center will cover the costs for each primary care practice to implement the model. 

"We look for grantees who want to take something proven and spread it. So, the further downstream you are in identifying the functions and features that drive performance, the better for us," Selberg told me.  

Another early pursuit by the center was work on monitoring healthcare performance, which was undertaken in partnership with the Kaiser Family Foundation. "We cannot improve what we do not measure," the center explains. Peterson and Kaiser together have created a health system tracker that delivers current information about industry trends, spending and performance-related issues.

The Peterson Foundation made a third early grant to the National Quality Forum to help patients with the near-impossible task of shopping for healthcare and treatment options. Right now, consumers and patients often cannot find reliable information to make informed decisions about outcomes and cost. The goal is to create a "road map" that makes accurate cost-benefit information readily available to healthcare consumers regarding procedures and treatments. Many other healthcare funders are interested in this same challenge. Healthcare is one of the only marketplaces in America where it's so hard to figure what one is buying and what it costs. 

Meanwhile, the Peterson Center is also working on another complex medical issue: high-need patients. This, too, is an area that's attracted the interest of various healthcare funders, as we've reported, and Peterson is collaborating with four other foundations on this work: the John A. Hartford Foundation, the Robert Wood Johnson Foundation, the SCAN Foundation and the Commonwealth Fund.

By one estimate, 5 percent of patients account for 50 percent of the total healthcare dollars spent in this country—and there's enormous inefficiency, here. High-need patients often struggle to get the "coordinated medical, behavioral and social services they need" to avoid costly hospital visits, according to the center.

Now, though, providers and hospitals are getting new guidance in this area. An online "playbook" for care of high-need patients, backed by the collaborative of five funders, was unveiled in December 2016, with health system leaders and insurers in mind. 

The Peterson Center's funding activities also include a number of patient engagement projects that we've mentioned before. OpenNotes is one of them. (Recently, as we reported, the New York State Health Foundation announced an RFP for $1 million in grantmaking to expand this information-sharing arrangement between provider and patient.)

OpenNotes operates on the principle that a patient who can read a doctor's or nurse's notes after a visit is likely to be more engaged and follow a treatment plan. In turn, such engagement can both improve patient outcomes and lower costs. 

Peterson is also interested in other work that promises to make healthcare systems work better, including helping employers become more effective purchasers of healthcare. It just announced a two-year, $1.6 million grant in this area. The Catalyst for Payment Reform will work with employers to test and share "value-based purchasing strategies" toward making these payers better negotiators on behalf of their workforce and the bottom line. One game changer really sticks out, here: Employers and self-insurers might consider locking in a pay-for-performance model with the physicians and health systems in their networks. 

The Peterson Center on Healthcare goes about its work quietly, staying out of the raging ideological battles over policy, which Selberg says he's happy to leave to others. The center places a high premium on pragmatism.  

This approach stands in contrast to Pete Peterson's high-profile and often controversial efforts to tackle America's fiscal challenges through reforms to major entitlement programs. However, if the Peterson Center's style is different, make no mistake: This work relates closely to fiscal issues, since rising healthcare costs are a key reason that entitlement programs face such growing stresses. It's impossible to get America on a sound, long-term financial footing without controlling these costs. 

As we've noted before, the Peter G. Peterson Foundation is a funder that's both laser focused and highly strategic. Its backing of an ambitious new center on healthcare reflects the larger goals that have animated its work from the start. 

One last thing: Grant amounts from the Peterson Center range between a half-million dollars and $1.5 million covering one- to three-year periods. It hasn't any issued RFPs, however, it's approachable with ideas about how to partner on broad-scaled healthcare improvement.