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History of Our Organization
New Hampshire Bar Journal
- Volume 44, Number 1
Healthy New Hampshire Foundation
By Sandi M. Van Scoyoc & Harry A. Schibanoff
I. THE FORMATIVE YEARS:
1997-2001
The Making of a Foundation
In 1997, New Hampshire Blue Cross and Blue Shield
(NHBC/BS) acquired the Matthew Thornton Health Plan
(MTHP), a not-for-profit health maintenance organization,
from Dartmouth Hitchcock Medical Center (DHMC). New
Hampshire Charitable Trust law requires that proceeds
from the sale of assets of tax-exempt entities continue
to be impressed with a charitable purpose. There are
a number of ways this requirement can be met. One is
the establishment of a foundation to benefit the community
and continue the charitable mission previously served
by the not-for-profit organization.
According to the final agreement between
NHBC/BS and DHMC, NHBC/BS agreed to pay forty percent
(40%) of the proceeds from the acquisition of the MTHP
to DHMC. The remaining 60 percent (60%) would be conveyed
to an independent, charitable foundation, whose mission
was as close as possible to the charitable mission of
the MTHP. The new foundation would be subject to oversight
by the New Hampshire Office of the Attorney General.
That independent, charitable foundation
became The Healthy New Hampshire Foundation. It was
incorporated on October 28, 1997. Approximately $10.5M
in funds were held in escrow by the New Hampshire State
Treasurer and released to the initial directors in April
of 1998. The final agreement between NHBC/BS and DHMC
included a provision for additional payments to DHMC
and the Foundation based on the profitability of the
MTHP, not to exceed $17,500,000. When Anthem Insurance
Companies acquired NHBC/BS on October 27, 1999, Anthem
assumed the payment obligations of NHBC/BS. Foundation
directors negotiated a new agreement with Anthem providing
payments for the endowment to the year 2004.1
The history of the HNHfoundation
cannot be fully appreciated without an understanding
of the confluence of children's health insurance programs
in the 1990s, both nationally and in New Hampshire.
In 1993, the New Hampshire Legislature passed the Healthy
Kids Act and authorized an appropriation of $240,000
for administrative startup costs of an organization
to provide affordable health coverage to uninsured children
who did not qualify for public programs. In 1995 the
New Hampshire Healthy Kids Corporation was created to
enroll children in a health insurance program called
the Healthy Kids Program. By 1996, the program was operating
statewide and covered children through age 18. At the
end of the first full year of statewide outreach activities,
800 children were enrolled in the program.
In 1997, a year later, Congress passed
the Balanced Budget Act (Public Law 105-33) establishing
the Children's Health Insurance Program (CHIP) under
Title XXI of the Social Security Act. The purpose of
the federal funding was to provide the means for states
to initiate and expand health insurance coverage to
targeted uninsured children. This legislation allowed
participating states to claim an enhanced federal reimbursement
match rate of sixty-five percent (65%). States were
required to appropriate the difference of thirty-five
percent (35%) in non-federal matching funds.
The efforts at the state level by the
New Hampshire Legislature and the Healthy Kids Corporation
and the national effort to insure more children through
the CHIP significantly influenced the charitable mission
of the new foundation. The purpose of the HNHfoundation
as stated in its Articles of Incorporation is:
1. to financially support through the
Healthy Kids Corporation, a 501 (c) (3) charitable corporation
organized under RSA 126-H, or through any other corporation
or entity organized for a similar purpose the acquisition
of health care insurance for residents of the state
of New Hampshire who, because of medical condition,
income, or resource limitations are unable to obtain
or afford adequate health care insurance;
2. to promote, through educational means
and otherwise, behaviors and life styles among New Hampshire
residents that are beneficial to good health and well-being;
and
3. to undertake activities which are in
furtherance of the foregoing purposes, except as may
be restricted or prohibited herein or by law.
Grantmaking
Shortly after the date of incorporation, Foundation
directors discussed the possibility of participating
in the CHIP. The directors recognized this new federal/state
program as an opportunity to accelerate the Healthy
Kids Program and fulfill the Foundation's purpose of
acquiring health insurance coverage for residents of
New Hampshire. However, matching funds were required
before the New Hampshire CHIP plan could receive federal
approval from the U. S. Department of Health and Human
Services, Center for Medicare and Medicaid Services.
In June of 1998, then Governor Jeanne Shaheen requested
an opportunity to talk with the directors. During the
meeting she asked the directors to consider granting
the matching funds to begin a New Hampshire CHIP. This
was indeed to be a unique partnership.
The Governor's request presented two challenges.
The first related to the question of on-going funding
for the required match. If the Foundation dollars were
committed in 1999, would the Governor and New Hampshire
Department of Health and Human Services (NH DHHS) assume
there would be a steady and dependable stream of funding
from the Foundation for this purpose in the future?
Second, would the Foundation be viewed as assuming a
public funding responsibility? Directors and stakeholders
questioned why charitable funds should be used for what
they believed was a state responsibility.
This time, a confluence of need and opportunity
drove the decision to support the CHIP. According to
IRS regulations, private foundations must distribute
annually five percent (5%) of their net assets. Directors
had to distribute five percent (5%) of the Foundation's
assets before the end of 1999. There was little doubt
that the New Hampshire CHIP would decrease the number
of uninsured children in the state. In addition, the
Foundation's funds would leverage significant funding
from the federal government. With federal funds, the
impact of the Foundation's funding would be expanded.
After careful deliberation on other opportunities for
funding in the immediate future, the directors requested
a formal proposal from the NH DHHS and subsequently
voted to provide the match for the first year of the
NH CHIP.
In 1999, the NH DHHS requested $500,000
in matching funds in its first year of the expanded
Healthy Kids Pro gram, with health insurance coverage
provided through the New Hampshire Medicaid Program
and the CHIP. No one could accurately predict how much
in matching funds would be needed in the first year
of the CHIP. Therefore, to avoid the possibility of
IRS penalties for falling short on meeting the required
minimum distribution, the directors issued a public
request for proposals to communities to promote access
to health care insurance and improve the health and
well-being of New Hampshire residents. The Foundation
received forty (40) applications for requests totaling
$2M. Four proposals were chosen for funding for periods
of one to three years. The four community grants included:
* $20,000 to Community Health and Hospice
of Laconia for outreach efforts of the Young Family
Program to find medically underserved and underinsured
children, enroll them in local or state health programs
and provide care management services where indicated.
* $68,865 to the Community Health Access
Network for a coordinated chronic disease management
and education system among the Community Health Centers
in Southern New Hampshire, for diabetes and asthma with
an emphasis on provider and patient education.
* $30,000 to the Greater Derry Community
Health Services for general operating support to improve
access to comprehensive primary health care and specialty
referral services for individuals from ten communities
that did not qualify for public assistance programs,
but for whom the costs of commercial health coverage
were out of reach.
* $70,722 to the North Country Health
Consortium to involve communities and providers in designing
a process to identify the areas of highest heath care
utilization and to coordinate programs and/or services
that reduced the costs of health care.
The Foundation distributed $446,958 in
1999 including the funding for the CHIP match.
After the management and operational systems
were developed to identify and enroll children, the
Healthy Kids Program began enrolling children at a rapid
rate. Six months into the program, in June of 1999,
1,295 children were enrolled. In addition, outreach
workers found and enrolled 2,610 Medicaid eligible children.
In just six months, 3,905 more New Hampshire children
had health insurance coverage. By the end of 1999, 6,488
children were enrolled in the Healthy Kids Program.
The New Hampshire Healthy Kids Program
was an unqualified success…so successful that the
need for the non-federal match for CHIP exceeded the
Foundation's available grant funds. In January of 2000,
the NH DHHS requested $800,000 to continue the program.
At that time, the Foundation's five percent (5%) required
distribution was approximately $600,000. The Foundation
had also made multiple-year commitments of approximately
$78,000 to two of the four community grantees from 1999.
Again, the directors faced a financial
challenge. Without Foundation support, New Hampshire
Healthy Kids Program's benefits could be scaled back,
eligibility levels could be reduced, premiums could
be increased, and outreach efforts would cease. The
number of insured children would drop precipitously.
If the Foundation committed the needed funds, part of
its principal would be needed to meet the obligation.
Contributing to the challenge was the opinion of Foundation
stakeholders that the Foundation was doing the work
of state government.
Again, the directors focused on the need
for funding to insure New Hampshire's children. Two
truths existed at the time: the Foundation was not willing
to let the program fail and the Foundation could no
longer afford to support its success. The Board committed
funding for the needed match in 2000 that amounted to
approximately $950,000, significantly higher than the
required distribution of $600,000.
Another source of funding had to be identified
for 2001. An effort had to be made to decrease dependency
on the Foundation for the non-federal match. The Foundation
met frequently with NH DHHS staff to inform them of
the Foundation's financial situation and encourage them
to plan for other funding in the future. The tension
that existed between those who believed strongly that
the match was the Foundation's responsibility and those
who believed just as strongly that funding the match
was a state government responsibility was resolved during
the 2001 legislative session. The funding for the match
was appropriated by the New Hampshire Legislature and
became available in July of 2001.
The Healthy Kids Program mission to provide
access to affordable, quality health coverage for New
Hampshire's uninsured children is a perfect match for
the Foundation's support. Indeed, the Foundation was
created with this type of relationship in mind. Consequently,
the Foundation continues to contribute funding toward
the non-federal match, but in an amount that is within
its current grant-making budget.
Planning
While the responsibility for funding the CHIP match
was debated, the Foundation directors initiated a long-range
planning process. In the summer of 2000, Foundation
staff interviewed individuals who had an interest in
the Foundation's mission. They told the Foundation that
future opportunities included expanding health insurance
coverage to adults, providing preventive health education,
collaborating with other fundors who do similar work,
engaging in public policy work, conducting research,
and creating a public image for the Foundation. The
challenges included a weak insurance market, a fragmented
health delivery system, an inadequate insurance coverage
system, a changing New Hampshire population, and an
inadequate state budget.
The directors used this information and
their experiences from the first two years of operating
the Foundation to develop the Foundation's mission,
vision, and values.
Mission
The primary mission of HNHfoundation is
to evaluate and promote access to health care insurance
for children and their families. We also promote healthy
life styles for the people of New Hampshire.
Vision
All New Hampshire children will have access to health
care insurance and engage in healthy life styles that
will reduce the potential for disease and injury.
Values
* In pursuing the Foundation's mission
of promoting access to affordable health insurance coverage
and public awareness of health issues, children and
their families are our priority.
* The Foundation supports innovative projects
that will facilitate systemic change in the health care
system—projects with a potential for broad impact
and measurable, long-term benefit.
* Though the Foundation values its independence
as a decision-maker, it believes that the greatest potential
to effectuate systemic change lies in the path of collaboration
and constructive engagement with stakeholders in the
health care system, including government.
* The Foundation will conduct its business
in an environment of respect for diversity, awareness
of the importance of public involvement and ongoing
involvement with grantees, and commitment to be accountable
to the broader needs of the community.
* The Foundation will conduct its business
in a manner that is financially responsible and that
preserves the founding endowment.
II. GROWING UP: 2002-2003
Goals
Currently, the Foundation's efforts are focused
on three goals identified during the planning process.
Most of the Foundation's resources are dedicated to
the first goal of breaking down barriers to health insurance
coverage for children. The Foundation currently funds
three projects to help achieve this goal. They include
the following:
The Foundation continues to financially
support the Healthy Kids Program. In 2002 and 2003,
the Foundation will provide approximately $450,000 toward
the required non-federal match for the CHIP portion
of the Healthy Kids Program. The total required matching
funds needed to continue the program is approximately
$1.7M in each year.
The second project resulted from an opportunity
to partner with the Robert Wood Johnson Foundation (RWJF)
for a New Hampshire Covering Kids and Families Initiative.
RWJF is providing four years of funding to the New Hampshire
Healthy Kids Corporation to insure children who live
in hard-to-reach families. The Healthy New Hampshire
Foundation has committed $160,000 toward this effort.
The Foundation's funding has been awarded to two community
organizations to enroll and retain minority and rural
children in the Healthy Kids Program: the HUB Family
Resource Center in Dover and Child Health Services in
Manchester.
The third project invests Foundation funding
in Carroll County which is located in northern New Hampshire.
In a recent study released by the NH DHHS, Carroll County
had the highest percent of uninsured children in the
state. The Foundation is collaborating with health and
social service leaders in Carroll County to fund a planning
grant to identify the best methods for reaching families
in need of insurance coverage for their children.
The second goal for the Foundation addresses
the need to educate the public on the importance of
health insurance coverage. The Foundation is partnering
with the Endowment for Health to reduce the number of
uninsured by fifty percent (50%) by 2010 from what it
will be in 2005. The Foundation's role is to educate
the public on the relationship between the lack of coverage
and a variety of documented personal and social outcomes.
The third and final goal is to increase
the Foundation's networking capacity. Current assets
of $13,500,000, while respectable, are not enough to
significantly impact the 90,000 uninsured residents
in New Hampshire. Consequently, the Foundation looks
for opportunities to collaborate on projects that have
the potential to facilitate systemic change. The Foundation
staff now networks with the New Hampshire Healthy Kids
Corporation, the NH DHHS, Bi-State Primary Care Association,
the NH Department of Insurance and New Hampshire Health
Grantmakers. This last group consists of health grant
makers from across the state who meet regularly to share
information and work together on projects to maximize
their resources.
The majority of the work of the Foundation
to date has focused on promoting access to health insurance
coverage for children. The directors are also addressing
two other components of the mission statement. The first
is the need to evaluate access to health insurance coverage.
The Foundation has committed $100,000 over a two-year
period to support evaluation of the Healthy Kids Program.
Evaluators will analyze enrollment and retention data,
link enrollment to encounter data and begin the work
of setting quality improvement goals.
The second part of the mission statement
addresses the need to promote healthy lifestyles. The
Foundation funded a three-year project to develop the
infrastructure for a disease management program for
clients with asthma and diabetes through the Community
Health Access Network. The goal of the project is to
assist community health center clients in managing their
own diseases to improve their health and be less dependent
on their health care systems including their local hospital
emergency rooms. Nationally, disease management systems
have been recognized as one of many innovations to have
a broad impact on reducing the cost of health care.
III. FUTURE 2003…
Accountability
The state's newest health foundation, The Endowment
for Health, has set a new and well-respected standard
for public accountability through extensive public involvement.
HNHfoundation will follow the example set by
the Endowment by becoming more publicly visible and
engaging with Foundation stakeholders. The Foundation's
staff will construct a web site in 2003, develop grant
guidelines, annual reports and information materials
for statewide distribution.
The directors issued the first and only
request for proposals in 1999. Since that time, the
financial commitment to the non-federal match for the
CHIP has left little grant funding available. Calendar
year 2003 will be the first year the Foundation has
the full amount of its grant funds available for its
grantmaking activities since 1999. The directors will
explore other opportunities for funding in 2003, including
a public request for proposals.
Planning
The planning work initiated in 2000 will be evaluated
and continue in 2003. However, organizations involved
in health care activities cannot strategically plan
for more than two to three years into the future. Health
care system changes, both positive and negative, continue
to develop. Now that the Foundation's funds are not
predominately committed to providing the non-federal
match for the CHIP, planning for the future will become
more challenging. There will be more opportunities to
fund programs that promote healthy lifestyles, similar
to the Community Health Access Network's disease management
project. Although more funding may be available for
this purpose, it will be more targeted. To reduce the
grant-writing burden on communities, the Foundation
will focus on one or two health issues that could be
impacted by the limited funds available.
Evaluation
Evaluation of the Foundation's own activities, including
grantmaking results, will play a more important role
in the future. During the first five years of operation,
12,000 insured children served as the measure of the
Foundation's success. While the Foundation moves away
from playing a major funding role in the CHIP non-federal
match, more emphasis will be placed on evaluating other
funded projects and on the Foundation's operating systems.
An assessment of the overall performance of the Foundation
will determine the impact of the Foundation's mission
and purpose. Directors and staff will attempt to answer
the question "What has been the social impact on
the residents of New Hampshire since the creation of
the HNHfoundation?"
Assets
HNHfoundation began operating with an endowment
of $11.8M within it first full year of operation. No
funds were credited to its portfolio in 1999 from the
settlement agreement with Anthem based on profits from
the MTHP. In 2000, the Foundation received approximately
$460,000 through the agreement and $900,000 in 2001.
Foundation policy dictates these payments be added to
the endowment as part of the Foundation's original settlement.
At the end of 2002, the market value of the Foundation's
portfolio was $13,800,000.
The Foundation began making investments
with a conservative strategy, with the majority of its
investment in bonds. Consequently, the Foundation's
portfolio did not experience the dramatic loss in assets
that most foundations experienced when the equities
market began to decline in 2000. More recently, to ensure
growth and preserve the endowment in perpetuity, the
directors have adopted a strategy to migrate from security
to equity investments.
CONCLUSION
The Foundation celebrated its fifth anniversary
on October 28, 2002. Its directors and staff take enormous
pride in playing a key role in providing health insurance
coverage to 12,000 New Hampshire children. Not many
new foundations can boast a similar accomplishment.
Much work remains, however, and there will be no shortage
of opportunities to decrease the number of uninsured
residents in the state.
One hazard of working in a foundation
is having to reject many more proposals than can possibly
be funded. The weakened national and state economy will
make it difficult to respond to unprecedented demands
on the Foundation's limited resources. Foundations can
reduce the hazard, however, by clearly stating and widely
distributing their grant guidelines, focusing their
funding on one or two areas of social concern, and by
collaborating with communities and networking with other
funders to make the best use of everyone's resources.
By becoming more accountable to the public and building
collaborative and networking relationships, the Foundation
will be able to find ways to invest relatively small
amounts of money to make significant changes for the
better.
ENDNOTE
1. Also in the final agreement that resulted
from the acquisition of MTHP by NHBC/BS, $560,000 was
held in an escrow account for abandoned property claims
under the New Hampshire Unclaimed Property Laws (RSA
471-C). The final settlement called for Anthem to remit
to the state administrator of unclaimed property, a
portion of the funds held in escrow while remaining
funds were distributed fifty percent (50%) to the foundation
and fifty percent (50%) to DHMC.
The Authors:
Ms. Sandi M. Van Scoyoc is the President
of the HNHfoundation located at 14 Dixon Avenue
in Concord, New Hampshire.
Mr. Harry A. Schibanoff is Chair
of the Board of Directors of the HNHfoundation,
Concord, New Hampshire.
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