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Leadership Role of Foundations: Advancing Heath Equity | Voices in Leadership | Mark Smith

Leadership Role of Foundations: Advancing Heath Equity | Voices in Leadership | Mark Smith

ROSS JONES: Good afternoon. I’m Ross Jones, a physician,
a Master of the Public Health student, and current Mongan
Commonwealth Fund fellow. It is my privilege to
introduce Doctor Mark D. Smith. Doctor Smith is a visionary
and innovative leader. He is a noted
health policy expert whose expertise is sought
all over the globe. Doctor Smith holds a BA
from Harvard College, an MBA from the Wharton
School, and an MD degree from the University
of North Carolina. In 2001, Doctor
Smith was elected to the Institute of Medicine,
where he chaired the Committee on the Learning Health
Care System, which created the widely-publicized
report on health care quality and innovation,
best care, at lower cost. In his role as
founding president and chief executive officer
of the California Healthcare Foundation, Doctor Smith not
only spurred the foundation into a leader in the fields of
health care quality and health policy, but his work
also helped to improve the health of thousands of
underserved Californians. Before I turn the session over
to Professor David Williams, who will be moderating
today, please join me in welcoming Doctor Mark Smith
to the Voices in Leadership series at the Harvard
School of Public Health. [AUDIENCE APPLAUDING] DAVID WILLIAMS: Mark, we are
truly delighted to have you here with us today as part
of this Voices in Leadership series, and we are looking
to learn a lot from you from your own experiences
of leadership. I want to begin, though– we’ve
heard in the introduction you were the founder,
director, president and CEO of the California
Healthcare Foundation. And for 17 years you held
that role and that foundation gave out $500 million to help
improve the health care system. But before we talk about some
of those accomplishments, I want to learn a
little bit from you about your preparation
for leadership. I understand that your academic
career began on this campus. This tell us a little
bit about that. MARK SMITH: Well in some
ways my leadership career began as a student
leader in high school, and then on this campus. My first two years
on this campus, I’m not sure that I excelled
in my academic performance, but my leadership
performance was good enough to have helped me take
over several buildings and do other things that were
important to student leaders– DAVID WILLIAMS: What time
are we talking about? So that we understand
what you’re talking about. MARK SMITH: We’re talking 1968. I was a freshman
here in 1968, and I spent two years here involved
in anti-war protests. I was elected to
the committee that established the African American
studies department at Harvard. Eventually I left school
and dropped out of school and spent seven
years out of school, and then came back in 1977. So it took me 11 years to
complete my academic career at Harvard. But my parents were awfully
glad when I finally did. I had been kind of involved
as a student leader actually in high school,
and then in college and in medical school. And in some ways,
all those roles, including my time spent out of
school as a political activist, prepared me for leadership roles
that I would have later on. DAVID WILLIAMS: Tell us a little
bit more about the seven years out of school. Where were you? What were you doing? MARK SMITH: I moved to Jackson,
Mississippi, where I was– DAVID WILLIAMS: Now you’re
from Brooklyn, New York. MARK SMITH: I’m from
Brooklyn, New York. Bed, stye. Born and raised. Moved to Jackson,
Mississippi, where I worked at an after-hours
school for black kids in Jackson, the Black
and Proud School. I was an activist on college
campuses in and around Jackson, and I led the first African
Liberation Day demonstration in Washington, DC,
in May of 1972, protesting what were
then Portuguese colonies of Mozambique, Angola,
Guinea-Bissau, and Rhodesia and southwest Africa. And then I worked at a textile
mill for about four years. DAVID WILLIAMS: So
I’m still thinking of a young man from Brooklyn
in Jackson, Mississippi. That must have been
a culture shock. MARK SMITH: Yeah, that’s
one way of putting it. A young man from Brooklyn
who had just dropped out of Harvard living in
Jackson, Mississippi. But it taught me
a lot because it taught me a lot about the
South, where I had never spent any time before,
really, other than my one trip to Durham, North
Carolina, which was my first taste of
segregation, with my father. And it taught me a
lot about dealing with people of all sorts. People who were
well-educated and people who weren’t so well-educated. And it served me well, I think. DAVID WILLIAMS: And
are those lessons that helped you in
your leadership role? MARK SMITH: I think so. I think leaders have
to be able to listen. Leaders have to be able to hear,
sometimes, criticism of them. Not everybody will approach
you with great kindness or approval,
necessarily, and you have to be able to deal with
all sorts of kinds of people. And so that variety of
experiences and exposures I think was helpful
in dealing with people from all walks of life. DAVID WILLIAMS: So from
Jackson, Mississippi, you then said you worked
at a textile mill, and from a textile
mill to Harvard. What led you to leave
working in the textile mill to come back to school? MARK SMITH: Let’s see. I was 26 years old working
third shift at Cohen Mills. And I was probably making
pretty good money at the time. I don’t know $4 an
hour, $4.50 an hour, which wasn’t bad money. I wasn’t sure I wanted to be
36 working in a card room. And I eventually concluded
that I wanted to be a doctor. And– DAVID WILLIAMS: Why did
you want to be a doctor? MARK SMITH: Well
that’s a good question. There was nobody in my
family who was in medicine. I hadn’t been a
candystriper in high school. I had no particular love
for pathophysiology. But first, it was a
helping profession. And second, I think I was
interested in the kind of social and economic and
political issues in medicine and in taking care of
people, particularly underserved people. And lastly, frankly having
been kind of an activist and suffered the coming and
going and the volatility of politics during those
days, I thought at the time that medicine was
based on science and was therefore
immutable and would not change with the winds. And so I was looking
for something that kind of grounded me in
something that was objective and fact and not
subject to debate. And in that way, it was
more attractive to me than, say, law, or
some other professions which had some of
those attributes but not the solidity,
the certainty, the objectivity that at the
time I thought medicine had. DAVID WILLIAMS: So you
came back to Harvard. They accepted you back? MARK SMITH: Yes. Gracias a dios. Yes. DAVID WILLIAMS: They
accepted you back– MARK SMITH: They
accepted me back. DAVID WILLIAMS: And you
majored in chemistry or biology as a premed. MARK SMITH: I actually majored
in Afro American studies. I changed my major to
Afro American studies, the department I’d
helped found, and then I did chemistry, organic
chemistry, physics, all those things on my
way to medical school. DAVID WILLIAMS:
And after 11 years, to the delight of
your parents, you finished your Bachelor’s degree. MARK SMITH: To their
overwhelming and everlasting delight and relief, yes. And mine, too. DAVID WILLIAMS:
And so from Harvard you go to medical school where? MARK SMITH: University of
North Carolina, Chapel Hill. DAVID WILLIAMS: What was
that experience like? MARK SMITH: It was
a great experience. I actually got good
advice from two professors I had met in taking a
social medicine course here who had been on the
faculty at North Carolina. I had the opportunity
to go there as a Moorhead fellow
in medicine, which meant concretely that I
got to go to medical school without having any debt,
which is no small task, especially for an activist,
old medical student. But they also told me, because
I wanted to be a primary care doctor, that they
thought I’d get just as good an education,
maybe a better education, to be a primary care doctor
at Chapel Hill compared to Harvard Medical School. If I wanted to pick
apart mitochondria or do those sorts– not that they
don’t do that at Chapel Hill, but if that were my path,
maybe Harvard would be better. And they said, frankly, you’ve
got Harvard on your resume once. That ought to be good enough. So I went back to North
Carolina, to medical school. It was a great experience. Part of what was great about it
was that the medical education system in North
Carolina requires that students spend part
of their clinical time away from the flagship teaching
hospital in Chapel Hill and out in secondary
but very good community hospitals in places
like Charlotte and Raleigh and Wilmington. And they have places
for students to stay. And they have faculty
who are trained and paid to teach in those
community hospitals. And so one got an exposure
to a type of medicine which is very different from
what most medical students get in kind of the mothership,
tertiary, quarternary hospital. And that was a real plus, I
think, for the education there. DAVID WILLIAMS: So Mark,
we’re following your career. Afro American Studies
major at Harvard. Lots of experiences
in between that helped you to learn how
to deal with people. You’re now a physician. Where did you go for
your residency training? MARK SMITH: I went to San
Francisco General in 1983, in part because I liked
San Francisco, nice place. In part because it had a
reputation of training people in the care of the underserved. And in part for personal
reasons, family to be there. And I arrived, as it turns out,
at the beginning of what we now call the AIDS epidemic,
which at the time was this bizarre and
inexplicable phenomenon of young men showing
up with these diseases that we’d read about in books
but never actually seen. DAVID WILLIAMS: So you
had direct experiences like that early in your
time in San Francisco? MARK SMITH: First night on call,
and every night after that. DAVID WILLIAMS: And
what did you see? MARK SMITH: We saw young men
with infections and tumors and skin diseases that
were medical oddities until just a few months before. They came in droves. It was a Holocaust. There was often little that we
could do for them, because we were just learning how to
take care of this disease. We didn’t know its cause,
and so frankly all of us who were taking care
of people were scared, and our wives and husbands
and girlfriends and boyfriends were scared because it
wasn’t entirely clear how was transmitted. And it was a time of great pain,
and would be for several years, because even as we learned
what caused the disease and we learned how to take care
of the secondary infections and cancers, we
had no treatments. And so it was a wrenching time. DAVID WILLIAMS: And you
played leadership roles even as a resident there. MARK SMITH: Yeah well I was
the co-chair of the house staff union at San Francisco
General, which meant I got the opportunity
to serve on the hospital’s executive committee. And that meant I got a chance to
see how this institution worked in a way that very
few residents do. Most residents stagger in at
6:00 in the morning and stagger out 9:00 at night,
and it’s all they can do to keep up with the
index cards– there were no smartphones back then–
index cards and kind of flip through the patients. But I got a chance to
see how the levers worked in the background, and
it spurred my interest in getting further training. This time not in public health–
when I went to medical school, it was with the intention
of pursuing a public health degree, and I think I’m three
courses short if there’s a dean around. But I kind of got more
interested in the management. It was a time also when,
for the first time, the cost pressures
of health care were beginning to reach down
into the clinical world, and people were just for
the first time saying, well, maybe our money
is not unlimited. Maybe we’ll cap
how much we’ll pay for your time in the hospital. It was a time of
turmoil, and I elected to get graduate training in
management, in part because of my exposure to
these issues of running a big complicated institution. DAVID WILLIAMS: I
want to come back to the management in a second. But what impact did that
early exposure to AIDS have on your entire career
of treating AIDS patients? MARK SMITH: Well for
most of us– many of us– most of us who trained at
that institution at that time, HIV has been an ongoing
part of our careers. I still see patients. I still work in
the AIDS clinic– DAVID WILLIAMS: No, no,
wait, let me make sure. You’ve been the
CEO for 17 years, and before that
the vice president of another foundation. You still make time
to see patients? MARK SMITH: I do. DAVID WILLIAMS: Why? MARK SMITH: Well first
because I like it. It gives me a certain
satisfaction that my other work doesn’t. Second, because
being a physician who has some expertise in HIV,
particularly a black physician and a physician
who speaks Spanish, there’s a shortage
of us in a way that there isn’t a shortage
of lots of other doctors. Third, because HIV, particularly
for people of my generation, has been this amazing
journey of discovery. In part it’s been
a social cause. Because of the people
affected, because of the stigma and discrimination always
associated with them. But it’s simultaneously
been this amazing journey of biomedical discoveries. So frankly, if my
clinical interests had been in hypertension,
all due respect, there’s not huge
progress in hypertension. But the progress
that we’ve made– what we’ve learned
about our bodies, about viruses, about
pathophysiology, and about how to treat this particular virus
in the last 25, 30 years– is nothing short of miraculous. It keeps your interest because
there’s always new stuff. And compared to
those early days, it’s a miracle what we can do. DAVID WILLIAMS:
But I would think that spending time
seeing patients is taking away from
your duties as a CEO. How do you link your
involvement with patients to being a leader? MARK SMITH: OK. Three ways. First, being a foundation
CEO, my first day at work, at a colleague of
mine at the time said, welcome to the
world of philanthropy. You’ll never have a bad
meal or a real friend again. And neither of those
things is entirely true, but there’s some truth to them. And so first of all,
seeing patients, it’s a group of
people with whom I have a different relationship. Not uncomplicated, perhaps,
but a different relationship. Secondly, it gives
you a window on what all this highfalutin
policy stuff means to a real, actual, working
doctor, and patient. These treatment authorization
requests and network designs and all the stuff that sounds
so wonderful when you’re sitting around in meetings,
but– do you know what I mean? And you actually
have to live it. And thirdly, because
I’ve spent a fair amount of my career telling doctors
things they didn’t want to hear, and because
the first way a doctor will try to discredit you,
if he or she hears something they don’t want to
hear, is to say, when’s the last time
you saw a patient? As if that necessarily
is relevant. And if you could say,
oh, about four hours ago, it at least takes
that off the table and you can have a conversation. So it’s actually been,
I think, internally, morally, psychologically
useful, but it’s also frankly been substantively
useful, because you get a sense of how these policy
decisions work out in practice. And it’s been
politically useful, because it gives one a certain
credibility with clinicians who, like it or not, feel
about clinicians differently than the way they feel
about non-clinicians. DAVID WILLIAMS: Wonderful. As I think of your whole
career as it unfolds, you now serve as a
physician, you’re working on the front of
the HIV/AIDS epidemic, you’re gaining
wonderful experience. You said you got a management
degree as well, which says that you’ve taken advantage
of opportunities that you see. And then, how did you
get into foundation work? MARK SMITH: Well when I finished
my training, formal training, I went off to Johns Hopkins,
where I ran the AIDS clinic. I told you about the
HIV part of my career. So I’m at Hopkins. I go as an instructor,
I get promoted, I’m writing grants and papers
and running the clinic– DAVID WILLIAMS: A good academic. MARK SMITH: A good– well. A fair academic. And then an old
colleague and friend, someone I knew both
professionally and personally, Drew Altman, was named the
new president of the Henry J. Kaiser Family
Foundation, and came calling to see if I would
like to move from Baltimore back to the Bay Area to
work at a foundation. So the first thing you here is,
Baltimore to the Bay Area, that sounds like a good idea. But also it seemed to me that
this might be an opportunity to have an impact and
learn and do stuff that my job, as much as I
liked it, at Hopkins did not. And actually a number of my
mentors and rabbis at the time told me it would
be a big mistake. First, because they said, oh
my god, you’re at Hopkins. You’ve got an earring,
but you’re at Hopkins. If you ever get off
this academic track, you’ll never get back on. Like that would be the worst
thing in the world, right? But secondly, I
think their vision of working at a foundation
was that it was something you did after you had been
the dean or the provost. It was a way to kind of slip
gracefully into retirement and give money to
your friends and sip a little sherry along the
way and kind of ratchet down. But I knew Drew, and Drew was
not about ratcheting down. And frankly, I said, it was
something of a leap of faith. Because I had worked for
foundations, but never at one. And like most people
who’ve never worked at one, I had all sorts of mythology
about how they worked. But I said to myself,
this is a risk, but I have pretty good training
and pretty fair credentials. And if it doesn’t
work out, I’ll be able to keep body
and soul together. And so I took that
leap and actually found that I love the
work, and enjoy it. DAVID WILLIAMS: So
what work did you do at The Kaiser Foundation? MARK SMITH: Well
the three things that I did most of were HIV
policy on a national level– DAVID WILLIAMS: We
see that golden thread of HIV running through. MARK SMITH: Reproductive
health policy. And what we called the
health care marketplace. This was the early ’90s. It was the beginning of what
we now call managed care, and everybody was all up
in arms– either fabulously enthusiastic or terrified
at the promise or threat, depending on your
point of view, of how managed care was going
to change the world. And in particular, we tried to
focus on these two areas of HIV and reproductive
health, and did work around how managed care
was affecting both of them. We also did work in a
number of policy areas in this country and
actually internationally, in South Africa, as well,
under the leadership of Michael Sinclair,
who’s now here. And so we did a wide
variety of things, and actually part of what I
liked about foundation work is the fact that, to do it
well, for the most part– particularly at the
senior level– you have to be a pretty good generalist. Which is to say, as
opposed to academia, where the rewards
really are going very deeply into a narrow
area, in foundation work, particularly at a
leadership level, you’ve got to know when you
know enough to do what you have to do and then move on, or find
people who have that expertise, as opposed to being able to
be an expert in everything yourself. So I kind of like that. DAVID WILLIAMS:
That’s wonderful. And from Kaiser
you then moved on to be the founder of the
California Healthcare Foundation, and its leader. And you’ve held that
position for some 17 years. Tell us a little bit about
your work at the California Healthcare Foundation, and
maybe some of the initiatives. I mean you are known
for innovation, and that foundation is known
for innovation in health care. Tell us some of the initiatives
that you developed and directed at the foundation that
you’re most proud. MARK SMITH: OK. So first, one slight correction. I’m not the founder. I wish I’d had $500 million
to just drop in the bank, but founding president. Actually– DAVID WILLIAMS:
Founding president. OK. MARK SMITH: Blue Cross and
the state of California and the people of California
were the founders. And in some ways, this
foundation, like some others, is different from
many foundations that we know because it
doesn’t bear someone’s name. It’s not General Johnson or
Mr. Rockefeller or Mr. Ford. It is one of the examples of
the creation of these new pots of assets from the conversion
of not-for-profit organizations to for-profit organizations. So I was the first employee. And that meant we had a mission
statement and a brokerage account, and a terrific
first board of directors. DAVID WILLIAMS: Brokerage
account with how much money? MARK SMITH: Well it actually
held stock in a company called Wellpoint
Health Networks. And my first job really
was to figure out how to sell the stock,
and then sell it and then transfer 80 percent
of the proceeds to our sister foundation,
the California Endowment. It’s complicated. But in the end– DAVID WILLIAMS: But I see
there not your medical training but your management
training playing a role with looking at this
money and trying to decide how
you’ll divide it up. MARK SMITH: Well yeah. That’s part of what
was interesting to me, and frankly that’s
part of why I think the board looked at me and
my resume and said hey, here’s somebody who
can do these things. Because they thought
having an MBA from Wharton meant you knew something
about Wall Street, whether you did or not. So in the end, our monetization
produced about $2.5 billion. So $2 billion went to
the California Endowment, and $0.5 billion came to us. And that’s what we started with. So over those 17 years I, with
a terrific group of colleagues, built an organization
that I’m very proud of, and I think has
made contributions. I’ll give you three programs
that I think are relevant. First is the CHCF
Leadership Fellows program. We’re here talking
about leadership. DAVID WILLIAMS: Yes. MARK SMITH: When I ran the
AIDS clinic at Johns Hopkins, I would often wake up terrified
that someone would realize that I was a fraud and
didn’t know what I was doing. I think most clinicians who
are in charge of something have that same feeling, because
health care systematically undervalues management,
particularly clinicians. It’s like, they call them suits. And that’s not a good word. So we decided to have a
training program for clinicians who were running something. Mainly doctors, but nurses,
dentists, pharmacists, respiratory therapists– if
you had clinical training but had management
responsibility, we wanted to try to help
you learn how to lead. So a little counting,
a little finance, how to read a budget sheet,
negotiation skills, media training, a 360 review,
the kind of thing that any other industry would
have invested in you long before they put you in charge of
people’s lives at $100 million. And so as a result,
over the last 12 years, there’s some 300
people– several of them are now hospital CEOs,
the chairman of the state assembly’s health committee, the
director of Medicaid, 14 or 15 Kaiser Permanente
physicians-in-chief, most public hospital
and community clinic chiefs of medicine or medical
directors or chiefs of staff. It’s been a terrific
program, giving people support who are in
the trenches trying to do all these things
that we write about that the health care
system should do. DAVID WILLIAMS: Before you
give us two other examples, can you give us a
concrete sense of how a different approach
to management can change day to day? How it matters in this practice? MARK SMITH: I don’t want
to be pejorative here. But the medical enterprise
is 10, 15, 20 years behind many other
industries in terms of the sophistication
of the management of both the physical and
economic, and particularly human, resources that
we have at our disposal. So I’ve become a big fan of
lean in the last few years. And when you see people
who have studied– DAVID WILLIAMS: Lean? What’s lean? MARK SMITH: Lean management. It’s a management
technique that comes from the Toyota
production system. And it’s– here’s the
thing, it’s not instinctive. There used to be a day
when if you were a doctor and you were smart we’d put
you in charge of a hospital or in charge of a public
health department. And those days are really over. Our institutions are way
too complex for people to manage by instinct
and experience and empirical–
you need methods. And so I’m actually
encouraged and optimistic that the way out of this problem
that we have with our health care system is, in part, that
you’ve got talented people who want to take on this very
difficult task of shepherding and stirring the changes that
we want the systems to undergo, and managing the people
who have to change the way they’re doing things. DAVID WILLIAMS: I want
a concrete example because I want to wrap my brain
around it, of how someone who’s trained, how
management changes day to day, what they do
in seeing patients. MARK SMITH: All right. So one of the
grants that we made was to the number
of community clinics to try to apply lean management
to how they did throughput. So any of you who’ve worked
in a clinic operation often know there maybe six or seven
or eight different exam rooms. And they’re a
little bit different and they’re all set up
a little bit different. In one room the
gauze is over here, in another room it’s over there. In one room the
tongue depressers are over here, in another
room– so that’s crazy. Nobody who runs a
system has stuff that’s different every
time you go to see it. It’s just like an
operating room. Lean management says,
you have the same thing in the same place every time. That means a nurse who’s
unfamiliar with the operating room won’t grab a number
10 instead of a number 5 because in the room down the
hall they have the number 5’s. They don’t waste time
looking for stuff. There have been a bunch of
studies of people in hospitals that show nurses
spend about half of their time looking for stuff. Looking for people. Looking for drugs. Looking for– it’s amazing. And so no modern institution
can meet the challenges that we have to meet in terms
of quality, reliability, and affordability, without
modernizing their management approach. Is that a concrete example? DAVID WILLIAMS:
That’s very helpful. That’s very helpful. So one of your
contributions is really providing management training
for health care leaders in the state of California. You were going to give us two
others, of the accomplishments that you are proudest of
at California Healthcare Foundation. MARK SMITH: Another
is an investment that we made several years
ago at the USC Annenberg School of
Communication, in what’s called the CHCF Center
For Health Care Reporting. Turns out that lots of
newspapers that used to maybe have health policy
reporters– since newspapers are all losing money these
days and their staffs are shrinking– may
have a science reporter whose job it is to cover the
weather, the polar vortex, the brand new hair
replacement thing, the ACA, all these things. And we decided that it would be
important to try to figure out a way to help people who read
the lay media understand health policy in a way that was
relevant to their local situations. And often this would be
through the lay press. And we could help
these publications by giving them resources
that they would not otherwise be able to have. This was a bit of
a gamble, frankly, because we didn’t know
whether the San Diego Union Tribune or the Sacramento Beat
would accept having someone not on their staff
doing work for them and printing stories
in their paper. But it turns out,
in part because we chose a very talented,
very well-respected veteran journalist
to lead this effort, that this has had a
tremendous impact in terms of local stories that have
real impact on policy. So when the local
newspaper points out that there haven’t been
investigations in nursing homes that are supposed to
happen every year for years and that people are
dying, all of a sudden the legislators look up and,
for whatever set of reasons, hold hearings and
things actually change. The example of this that
people may be familiar with is the kind of Walter
Reed phenomenon, where the problems at Walter
Reed had been well-known– DAVID WILLIAMS:
It’s a VA hospital. MARK SMITH: –to many
people for a long time. In the army hospital in DC. But once there was a series
in the Washington Post, all a sudden things changed. So there have been
a number of things that you can point
that have changed because the newspapers
have accepted this help from the CHCF Center. And the third thing
I’d point to is what we call the CHCF
Innovation Fund, run by a very talented woman named
Margaret Laws, in which we started to invest in
companies that we thought could help fulfill our mission. Now most of us have had the
experience, perhaps even around here, of an
entrepreneur-ish academic. And entrepreneur-ish
academics are different from
entrepreneurs, in this way. They’re both active
and creative and vital and innovative
and charismatic. The entrepreneur-ish academic,
when the pilot project is over, writes a paper about
the pilot project and then moves on to
the next pilot project. The entrepreneur, when
the pilot project is over, is trying to find money to
build 20 more pilot projects and scale this thing so
that millions of people can get whatever it is. We need more of the latter. I love the former. They’re all fine Americans. But there is this phenomenon
of non-profit and foundation and government-funded
innovations that aren’t conceived,
priced, scaled, built, or led in such a way that they
are likely to ever actually become real, breathing,
living, dominant things. So we concluded, in part with
the help of very smart board members, that by investing
in companies whose aims were consistent with the
foundation’s mission, we had the chance to not only
help the world get better, but actually do OK
for the foundation. Look at it like this. If by the foundation
lending you money to get your company
off the ground that can, say, reduce
hospitalization in public hospitals, and
you give us the money back– now if you were
a traditional investor, venture investor, getting
your money back is a failure. If you’re in the foundation
business, where you give money away for a living, if
you get your money back, that is Christmas in July. That’s a huge success. And so we started to
look for and invest in companies that
were doing things like trying to improve the
chance of having a vaginal rather than caesarean
delivery in obese women, which has huge
epidemiologic implications for the Medi-Cal population. In companies that could
reduce rehospitalization of patients who were leaving. In companies that could
try to provide actually computer or computer-driven
mental health interventions for people with
minor mental issues for whom there are simply not enough
professionals available. And a wide range– a company
that does teledermatology so that it can diagnose and give
treatment recommendations for people 500 miles
away who may live 100 miles from a dermatologist
who will accept Medicaid or who will see you if
you don’t have insurance. So a wide range of
issues where, in the end, the solution will have to be a
commercially-viable solution, and not a
charitably-given solution. So that’s another I think really
interesting and exciting area that a number of foundations
around the country are now beginning
to experiment with, because they’ve had this
same experience of having a graveyard full of promising
innovations that never really went much of anywhere, in part
because they weren’t designed to be able to do that and in
part because the people who designed them, though they
did a great job, frankly didn’t have either the
skill set or the interest in having them become
commercially viable. DAVID WILLIAMS:
I want to ask you a different kind of question. I think it’s a question
that’s on the minds of many in the audience. If you were hiring someone
as a CEO of a foundation and you were hiring
a promising Harvard graduate in public health
to work for the foundation– MARK SMITH: A little
tautology, David. Aren’t all Harvard
graduates promising? DAVID WILLIAMS: OK, we’ll
go with your definition. What do you look for? How do you identify someone for
whom a career in a foundation looks like it would be promising
that they might be successful? MARK SMITH: It’s
a great question. And I’ve been fortunate enough
to hire some terrific people and been human enough to make
some awful hiring decisions, as well. I think the people who do
best in foundation work are people who actually
have certain breadth and variety of experience. By which– DAVID WILLIAMS: Now I just want
to make sure I’m hearing this. But you’re not saying
specialization. MARK SMITH: No, not necessarily. But first of all, it
is helpful for you to have something that
is your calling card. Specialization in the
sense that you have some demonstrated expertise
in something. It almost doesn’t matter what. Sometimes people who want
to do policy, you say, well, what can you do, actually? Can you write legislation? Can you run a clinic? Can you administer
a grants program? Or is your definition of
doing policy just kind of you like to be in
charge of something? So I think it is
important to have– I want to distinguish
specialization from expertise. I think it’s important to have
some expertise, because it demonstrates some
generic competence. But my experience has been that
people, because foundation work involves necessarily
interaction with the government, interaction at least in health
with the provider community, interaction with the
non-profit community, interaction with the media. It’s helpful for you to have
some experience that allows you at least a modicum of comfort
in dealing with all those. If you are terrified
by academics who throw F statistics
at you and you just get bullied when a grantee comes
in, you will not do a good job. If you have ideological
ideas about the government, positive or negative,
that doesn’t allow you to work with
colleagues in government and be realistic about both the
potential and the limitations of government, then
you won’t be effective. If you don’t have some sense
for how the media works and what projects are
likely to be newsworthy and which ones are likely
to be snoozers as far as the media’s concerned, you
probably won’t be effective. And so my experience
is people who’ve had some academic
preparation, who’ve had some time in
government, who’ve had some time in
the provider world or in the consulting world
or in the managerial world– DAVID WILLIAMS: Or even
time in a mill, right? MARK SMITH: Even time in a mill. It’s all data, right? DAVID WILLIAMS: Yes. MARK SMITH: My sense
is those people bring a certain plasticity
and at a certain ability to be a good generalist. Flexibility that
you have to have. I’ve hired people who were
terrific reporters who made lousy foundation officers,
or terrific legislative staff or terrific academics
who had already been so optimized
for that function that they couldn’t
get out of whatever the limits of that
function were. So I guess my suggestion, if you
want a career in philanthropy– and then I’m going to caution
you about wanting one– but if you want a
career in philanthropy, is that your best preparation
is to have exposure to a variety of
sectors that allow you to deal with them successfully,
and to have evidence of your professional competence
and network, through writing or through leadership of
professional organizations or in some other way, that
allows me to imply that, if you haven’t done
foundation work before, you’ll be able to be successful
because you can communicate well and there are people
who will respect you. Now having said
that, my caution is that– you know I’ve had
a wonderful and rewarding and– I’m very grateful for
my career in philanthropy. It’s not something that
I started off planning. It’s not like I sat
there and said, hmm, I want a foundation job. And frankly, the number
of jobs in foundations is really vanishingly
small compared to the number of jobs in public
health departments or provider systems or even
academic institutions. So there’s a fair
amount a luck involved, as there is in most
professional success, even more in foundations,
because the in is just that much smaller. So in my career,
there’s a fair amount of happenstance of
who I happened to know and where I happened to
be at the right time. And sometimes that will
come together for people, but I’d be cautious about
having your heart set on doing this, which
is not if you think it’s the right career that
you shouldn’t strive to do it, but the reality
is there are only but so many jobs in that sector
compared to other sectors where people who are
appropriately prepared might find rewarding
and interesting work. DAVID WILLIAMS: And I
would also say that, just from listening
to your story, to me another really
important lesson is making the most of the
opportunity where you are. MARK SMITH: Absolutely. DAVID WILLIAMS: It’s crucial. Now this has been
lots of fun for me. I have a million more questions,
but I don’t want to be selfish. We have a wonderful
audience here, and I certainly would
like– I see a hand. We want to have some
questions from the audience. Yes. Just stand and
introduce yourself and– AUDIENCE: All right. So my name’s Leo. I’m a graduate
from HMS and HSBH. Thank you very
much for being here and sharing your
journey with us. So I’ve got a question. There’s a professor
here called Jim Conway, and he teaches a class
called Leading Change. And so he also says that we
all suffer from being human. And part of suffering
from being human implies that sometimes
people will resist change. And so I would like to see
your opinion and your insights on how did you deal with people
who were resistant to change, and what are some tips for
us who will go out there to the world and try
to change things? MARK SMITH: First of all I
know Jim Conway well and have great respect for him. He was a member of the
committee on which I served. And he’s right. People don’t change
easily sometimes. I don’t know that I have any
great, searing lessons there. There’s a lot written on this. I think it is worth going back
to this issue of listening. So often I think we start from
what our priority is, rather than the priority of the
people that we’re working with. And often my experience has
been that, if you at least understand what it is that
somebody wants to hold onto, you have a better
shot at understanding how you can get them to let it
go, in part because maybe you can give them something
that substitutes. So I’ll give you an
example from lean work. This lean thing doesn’t
come easily to many doctors, and sometimes what you hear
is, my patients aren’t cars, my patients aren’t widgets,
they’re all individual, get out of here with
that management nonsense. Some colleagues at Virginia
Mason Medical Center in Seattle who lead the
primary care work said, they knew that their colleagues
had bought into the method when the method was able to solve
a big problem for primary care docs, which was, at 5 o’clock in
the afternoon, they were done. Most primary care docs, 5
o’clock in the afternoon your day has just started. You’ve got a pile of phone calls
to return and refills to do and things to check
off and authorizations and all that kind of stuff. And by establishing
a method that was able to feed the doctors
these little snippets in little– interstices in
their schedule, bit by bit during the day, 5 o’clock, when
their last patient was done, they were done. Now that’s not why they
established the method. They established the
method principally to kind of regularize
and improve patient care. But by trying to figure
out what problem you have, how I can solve your problem
along with my problem, I can get you to buy into
what it is I want to do. So I guess– again,
I don’t know if this is any brilliant insight, but
if you want someone to change, you must have some reason
for wanting them to change. You might want to
start with, well, what problem might
you solve for them. Since you’re solving a
problem for yourself, maybe there’s some
problem you can solve for them that’s
consistent with the change you want them to adopt. And in some ways that really is
as old as just putting yourself in somebody else’s shoes and
trying to understand what they’re dealing with. I have another example. I don’t want to go on too long. But this is– this leadership
thing and doctor’s work, is a very strange
point, I think, in the history of health care. I’m a big believer in systematic
care, in systems of care, in evidence-driven medicine,
which some practitioners have labeled “cookbook medicine”. And it’s one of the things that
I think modern health systems find the most resistance
from physicians who are holding onto autonomy. Because a lot of us were
trained to value autonomy, it’s been an important
part of– my first week in medical school, some
dean congratulated me for having chosen the
last profession in America where nobody could
tell you what to do. A lot of the people who are
doctors are doctors in part because they value
individual autonomy. They don’t like organizations. They don’t want
to be part of one. They don’t want to have
someone tell them what to do. So it’s part of
their DNA, and it’s an attribute of their
profession that they cherish. And when they hear you
talking about guidelines and evidence-based
medicine and organization, they hear that as a threat
to their autonomy, which they associate with a high
degree of professionalism and the kind of care
they’d like to deliver. And I think, as opposed to just
telling them they’re wrong, get over it, go
away, you might say, I understand why
you feel that way. That’s the way we were trained,
and I understand and value and celebrate your desire to
feel personal accountability and responsibility for the
care your patients receive. That old method gave you
no information about how you were doing, gave
you no benchmark data for how you compared
with your colleagues, gave you no way to quickly
and scientifically compare how you approached this
patient with the best evidence in the world– why would you
want to practice like that? You want to provide
high-quality care. We’re trying to deal
with the complexity in the modern
biomedical world that requires different
methods to allow you to do what you went
into medicine to do. Now I don’t know that that’s
exactly the right speech, but I guess what I’m saying–
as opposed to saying autonomy is bad, there’s a
part of the autonomy that you want to try to unite
with, and kind of give people a way to solve the
problem that they have. End of rant. DAVID WILLIAMS: Wonderful. Another question? I see a– yes. AUDIENCE: Hi. I’m Lisa Fitzpatrick. I’m a physician. I also was at CDC for many
years working in public health, and now I’m here in
the [INAUDIBLE] program at the Kennedy School. And only after listening
to you did I realize, Marsha Martin has been trying
to connect me with you. And I don’t know if you know
her, but she’s from Oakland and she also works in DC. And she’s been talking
about you for a long time. So I’m really glad
I got a chance to come and listen to you. But my question
is about what you think about the trends we’re
seeing in mobile health care, specifically being
able to contact a doctor over the internet and
have someone dialogue with you and diagnose you
over the internet, and what implications
does that have for the cost of health care? MARK SMITH: I think it is a
fantastic and long overdue coming of modern information
technology to health care. Like all technology,
it will have some unintended
consequences, and there will be some downsides. But if you stop
and think about it, ours is the only
service industry whose basic infrastructure
looks pretty much like it did 30 years ago. You don’t shop the way
you shopped 30 years ago. You don’t make
travel arrangements. You don’t bank. You don’t do research. You don’t get your
news and information. We don’t do anything the
way we did 30 years ago, except go to the doctor. So there are new machines
in the doctor’s office, but the informational
infrastructure, the basic core of our interaction
with the system, looks pretty much like it did
when Medicare and Medicaid were passed. We’re getting there. And there’s HIPAA and
there’s all these kind of things to–
but I happen to be a member of Kaiser Permanente. I email my doctor. If I have a lab test, I get my
results on my phone that day. That’s the kind of
customer service we’ve come to expect from
other aspects of the service industry. And soon, if your system can’t
provide that kind of customer service, your patients will
walk to a system that can. You wouldn’t bank
with a bank that says you must come into
the bank to get your money. You’ve got to come see a
teller between 9:00 and 3:00 to get your money. What are you, crazy? So my sense is that the
market will force providers to begin to move into
the 21st century in terms of the level of accommodation
to patient convenience, as opposed to our convenience. For everything from where
we’re located to what hours we operate to how we
communicate with each other. So I think it’s long overdue. In many ways the
retardation of that has had to do with the
fact that our reimbursement system is an obstruction. So to the extent that for
most hospitals, doctors, people in the
business, you’re still paid on the number of times
that the turnstile goes around. And so why would you
adopt the technology that will decrease
your own payment? Nobody in his right
mind would do that. To the extent that we
change our reimbursement, this so-called volume
to value switch, where all of a sudden my
doctor’s saying well yeah, I’d rather do an email then
take up a nurse’s time, a receptionist’s time, a
parking spot, the utilities and 15 minutes of my time to
tell him his hemoglobin A1c is normal, that’s insane. It’s sane if you only get
paid if I come in to see you. So one of the big things that’s
happening in health care now is this big kind of
tumult around changing the reimbursement system. And to the extent it changes,
it will accelerate the adoption of modern IT in
health care in a way that we’ve just come to expect. It’s a normal thing with most
of the way we live our lives. Does that makes sense? DAVID WILLIAMS: Yes. I see another hand in front? AUDIENCE: Hi. My name’s– DAVID WILLIAMS:
Microphone, please. Thank you. AUDIENCE: Hi. My name’s Lou Callan. I’m an MPH student in
global health here. And my question is, how are your
roots in community organizing and advocacy manifest
in your work today? MARK SMITH: That’s
a great question. Well first, we’re all
being trained every minute of our lives, whether
we know or not. And so you’ve heard a little
bit about how I spent my teens and ’20s and, to the extent
that I have some public speaking ability, that’s in part
because– I tell myself all the time– you want to get
to do it well, do it a lot. The more you do it, the
better you are at it. And so that’s one of the things
that I learned how to do. I also hoped I
learned how to listen. I have friends who help get
me better at it all the time. I also think there’s
some level of kind of– my HIV-continued
work is in part a question of social commitment that
comes from those same roots. And in many ways,
interestingly, I think some of the things
I learned doing organizing are very consistent with things
I learned in business school. For me, frankly, business school
was a much more interesting intellectual experience
than medical school. Because much of medical school
is kind of memorizing this bone is connected to that bone. Business school is
like– these people buy Reeboks and those
people buy Nikes. Why? What’s up with that? How is it that these
organizations, these groups of people that
have an org chart, also have kind of
a shadow org chart. There’s the formal
structure, then there’s an informal structure
of how– every organization has how things really work
in the organization. So that’s kind of
endlessly interesting, but not unlike what
one does when you’re trying to figure out how do
we get the students to vote for an Afro American
studies department. So that’s the best I can do. DAVID WILLIAMS:
Another question. AUDIENCE: Hi, my
name is Rebecca Gray. I attend the two-year
master’s program in Health Policy
and Management here. Thank you so much. This has been
really interesting. I wanted to talk, or
ask, you about– you speak about the importance
of connecting with physicians and how you have continued
to see patients in order to sort of maintain
that credibility. For those of us who
are not physicians, who are aspiring to roles in
similar types of organizations or in government, what’s your
advice for sort of gaining the trust of the
provider community if you don’t have that clinical
background to relate on? MARK SMITH: I think it
depends a lot on the context. My sense is that most
of the health systems that I’ve seen where
things work well, management has
learned how to partner with clinician partners. So I can think of two or three
hospitals that are really very well-run hospitals
whose administrators are not physicians. Now for some of them, they’ve
been there 10, 15, 20 years. They’ve developed relationships,
they’ve developed trust. But another technique
is, every function has a clinician and
non-clinician lead. And it is the two of
them that together do the work that manages both
the clinical and non-clinical staff. So I think it’s not
imperative for you to be a clinician
to lead clinicians. I think it’s imperative
for you to have someone who is a partner who has
that kind of credibility. And I think a lot
of that will depend on whether you’re running
a public health department or in a hospital
or in a foundation. Most of my colleagues
at that foundation and in most health foundations
are not themselves physicians, and I don’t think
necessarily have to be. My first boss at a foundation,
and friend and mentor and teacher and still the
president and CEO of the Kaiser Family Foundation,
is not a physician. He does a terrific job. I do think it’s important
to recognize that that’s going to be an issue
in some settings, and to respect that kind
of perspective and people and learn how to partner with
folks who can be broad-minded. DAVID WILLIAMS: We have
time for one last question. I see someone right up front. AUDIENCE: Hi. Ann Ellrington. I’m at the School
of Public Health. I’m also a Mongan
Commonwealth fellow in Minority Health Policy. I’m an OB/GYN at the
core, and therefore I wanted to ask what
parameters were you able to decipher
to move forward to safety for the morbid
pregnant [INAUDIBLE]. You didn’t talk
about that, and I want to know where
we are with that. MARK SMITH: I’m glad to. One of the lessons
of venture investing is that most of your
investments will fail. And that’s one that failed. So we were investing
in a company that had a technology that
could improve detection of fetal distress in
women who were obese. And you know something about
the relationship of obesity to socioeconomic status. So I can’t remember
the exact metrics, but if you could reduce
the c-section rate– and since c-sections
are related to inability to monitor fetal heart rates,
if you could increase detection of heart rates, you could
decrease c-sections. I can’t remember the
exact statistics, but it was something like if you
could reduce the c-section rate in Medi-Cal deliveries
in California, you’d save $50 million a year. Some amazing number. And so we made an investment
in a pre-FDA technology which failed. Sorry. There’s actually really
interesting stuff. And I’m glad to talk with you
about some lessons of venture investing in health, which
I’ve learned the hard way, even as a– kind of the impact
of socially-motivated venture investing. But the reality is
that venture investors, if they make 10 investments,
8 of them will fail. 1 may do OK and 1
will be a blockbuster, and that’s how they
make their money. DAVID WILLIAMS: I have
a question for you that maybe comes
out of my own work. One of the things I
did a long time ago was served on the Institute
of Medicine Committee that produced the Unequal Treatment
report that documented pervasive racial and ethnic
inequalities in the quality and intensity of care. What, from your perspective
of looking at innovation within the health
care field and looking at improving quality, what are
the lessons that we can learn for addressing this really
important problem in the United States? MARK SMITH: I would cite two. One is the importance
of reliable care based on evidence. So some of the variation that we
see about how black people are treated versus whites
or Latinos versus non Latinos or gay versus
straight, is a subset of all sorts of irrational
variation in health care. We’ve learned from Jack
Wennberg white women are treated differently in one
town versus another. So in some ways, the answer
to all those is the same. It’s to try to have
scientifically-based, evidence-based ways of taking
care of people which you customize as necessary for
individuals, but take it out of the hands of the
individual variation that goes on in individual providers’
minds, which is responsible both for some of those
inequities and others. The second is the
importance of a field that’s getting more and
more attention, which is so-called
patient-centered outcomes. Because after all,
I don’t presume to know what all Latinos want
or what all Native Americans or what all women want. Each of them is individuals. So the fact of
matter is our system for all patients is still
largely driven by outcomes that providers
consider important, and we’re just now beginning
to ask the question, what is it that patients think is important
about labor and delivery? Or about cancer treatment? Or about a prostate operation? What are the patient
outcomes that are relevant? To the extent that
we can figure out what those right questions
are and ask them, we will get much deeper
insight into meeting the needs of all
people, regardless of their SES or ethnicity. Because we basically
categorize people according to their phenotype. Are you a male or female. How dark are you. How old are you. But in this room, there
are six or seven other axes by which we could
categorize you. How risk-averse are you? How self-confident are you? What’s your level
of health literacy? And where you fall
on that axis may be more important to
your clinical care than whether you
are black or white. So I think as we get
better about finding the right questions for
patient-centered outcomes and asking them and then
tailoring care for patients, we will do a much
better job of overcoming some of these troubling and
persistent disparities in care. DAVID WILLIAMS: Mark,
we’ve got 30 seconds left. You served recently on a
very influential Institute of Medicine committee. Could you tell us maybe one key
take-home message in 30 seconds that we should learn from
that committee’s report? MARK SMITH: Yeah. The key message is that many
of the problems in health care are the result of the unintended
consequences of our successes. If our doctors cannot
by themselves manage all the diagnostic and
therapeutic options, it’s because we’ve been
successful in developing a lot more. If we need to have a more
modern approach to managing our institutions,
it’s because they’ve grown so big and complex
we need science too. So that should give
us cause for optimism. Rather than starting
with the premise that everything is all broken,
everything is all messed up, we have to start from scratch–
which we policy wonks often do– we should say, we’ve
got a lot to celebrate. We’ve got a lot of successes,
and we can build on them to correct the unintended
consequences of where we’ve done stuff really well. DAVID WILLIAMS: Dr.
Mark Smith, this has been a fascinating
conversation. Please join me in
saying a big thank you to Dr. Mark Smith for
a wonderful afternoon. Thank you. [AUDIENCE APPLAUDING]

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