Monday, July 25, 2016

Giving it away: philanthropy and medicine

My wife and I aim to give about 10 percent of our pre-tax income to charity each year. Much of this amount goes to our church, which struggles to make ends meet despite being situated in a rapidly gentrifying area of Washington, DC. We divide the remainder between a variety of causes, such as historical preservation efforts, summer programs for poor kids, and education and leadership programs for young family physicians. Historically, we have allocated a very small fraction of our charitable contributions to our college, graduate, and medical school alma maters (Harvard, Johns Hopkins, and NYU for me; Cornell, Cornell, and Stony Brook for her), and then generally give directly to student organizations, such as the Big Red Marching Band and the Phillips Brooks House Association. It isn't that we don't have fond memories of attending these schools or don't appreciate the education we received there, but in our view they have deeper pockets than almost every other organization that asks for our financial support.

Two recent episodes of Malcolm Gladwell's "Revisionist History" podcast provided more convincing arguments against making big donations to top ranked universities. Gladwell made headlines last year with an Twitter rant criticizing hedge fund manager John Paulson's $400 million donation to Harvard (whose endowment at that time was valued at more than $36 billion). In "Food Fight," Gladwell compared the funding priorities of Bowdoin and Vassar, two small Northeast liberal arts colleges that appear pretty similar on the surface. One notable difference is that cafeteria food at Bowdoin is gourmet dining, while Vassar's is mediocre at best. Using public information sources and interviews with staff and students at both colleges, Gladwell drilled down to a major reason for this dining disparity: Vassar devotes more of its endowment income to financial aid in order to increase the social and economic diversity of its student body. If you're a wealthy individual who wants to advance social justice, Gladwell argued, choose Vassar over Bowdoin and supporting education for poor students over serving the rich breakfasts of eggplant parmesan pancakes.

Then, in "My Little Hundred Million," Gladwell explored the phenomenon of philanthropists such as Nike's Phil Knight choosing to give hundreds of millions of dollars to private universities that educate the elite rather than public universities who reach many more students of modest means. Gladwell included excerpts from an almost comical discussion with Stanford president John Hennessy, who accepted a $400 million donation from Knight to endow a graduate program for 100 students per year, even though Stanford's endowment is $22 billion. In comparison, a $100 million donation to little-known Glassboro State College (now Rowan University) in New Jersey in the 1990s transformed opportunities for 16,000 students each year and inspired this moving a cappella tribute from students after their benefactor's death.

As I've written before, hospitals and health care organizations are similar to institutions of higher education in that both have skyrocketing costs, little transparency, and few objective measures of quality. They are also alike in that they rely on philanthrophy to supplement the income they receive from patients/students and insurers/lenders. Famous cancer centers have turned fundraising into an art form, too often relying on emotion rather than fact to attract patients and donors. But just because it may be more attractive to donate to the Memorial Sloan-Ketterings and their associated academic institutions doesn't mean that they should be receiving an outsized share of my or your charitable dollars. Especially since we know that U.S. News top ranked (and well funded) medical schools end up near the bottom of the heap when ranked according to their social mission: the percentage of graduates who practice primary care, work in health professional shortage areas, and are underrepresented minorities. Similarly, a disproportionate amount of Medicare's $10 billion per year graduate medical education subsidy goes to institutions that train few primary care physicians or clinicians who practice in underserved areas.

Dear Mr. Paulson, Mr. Knight, Mr. Buffet, Mr. Gates, do you want to improve health outcomes in America? Then write a big check to John Peter Smith Hospital in Fort Worth, Texas, #6 on the list of producers of primary care graduates that received a modest $4.5 million from Medicare in 2008. Or Banner - University Medical Center in Phoenix, Arizona, #15 on the list. (Both institutions, not coincidentally, have outstanding family medicine residency programs.) Don't worry about my alma mater NYU, whose hospitals received more than $55 million from Medicare in 2008 but ranked #156 in primary care production. Or Memorial Sloan-Kettering, for that matter, which ranked #158 out of #158 primary teaching sites with at least 150 graduates - dead last.

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