Washington Health Foundation

 KEY WASHINGTON HEALTH FOUNDATION STRATEGIC INITIATIVES:

THE HEALTHIEST STATE XCHANGE

The Healthiest State XChange was a business strategy conceived by the Foundation in 2010, and implemented over 2011 to 2013.  One of its imperatives was to build a revenue model that could sustain the Foundation, which had intentionally spent down its reserves in an aggressive effort to improve health for Washingtonians, including especially on its highly successful Healthiest State in the Nation Campaign.

The plan had been to use the Campaign, kicked off in 2004, as a way to attract wealthy individual donors to the Foundation’s innovative change program.  This strategy was working, and WHF had several interested potential donors lined up for possible major donations.  Then, the surprise of the Great Recession in the Fall of 2008 disrupted this approach.  People and organizations across the Pacific Northwest were in immediate distress, and the attention of funders shifted to these needs.

The Foundation was faced with the reality that its fund reserves would run out in two or three years without a new revenue source.  The quest began to find such a source, and President & CEO Greg Vigdor led the staff and board on an exploration of creative ways to build one.

WHF felt it essential that any such idea must not only build on, but be strategically linked to, the program and change work of the Foundation.  This was the organization’s passion and expertise, and success would depend on passionate execution of any new revenue plan.

An idea was hatched in 2010 to build upon the concepts of Health Homes and the Healthiest State in the Nation Campaign- to build a resource for people and organizations that would help them navigate their way through the complicated and costly dimensions of the health insurance world.

The idea was to start a not for profit business enterprise within WHF that could provide this service and generate revenues through commissions from health insurers.  The idea was for WHF hire health insurance brokers (aka “producers”) who would partner with existing Foundation health and health care experts to provide a telephone and online support line for consumers and businesses.  Calls would be answered by these “Personal Health Advocates” who would help callers navigate a variety of needs.  These would include questions about enrolling with health plans, but would also bring in the Foundation’s expertise on health prevention and it array of health home tools for consumers.

The Personal Health Advocate service would be provided to all who called, and without regard to their ability to pay for the service.  WHF did not accept payments from people for the service.  Rather, it asked those who were interested in WHF help choosing a health plan whether they would be willing to have WHF became the insurance broker of record for them.

If so, for most health plans chosen, brokers would be paid a commission, by the Plan, for services rendered in helping clients make their choices.  In essence, WHF was proposing that it become a not for profit health insurance broker, and develop a service base for this work far beyond the conventions of what other insurance brokers provided for health insurance matters.

The WHF Board approved the concept, and a Business Plan was developed by staff to guide the business start up.  In late 2010, WHF started up the business and engaged on its development and growth up until 2013.

The service model was a full success.  WHF served thousands of people, as well as organizations  who wanted the Foundation to help rebuild their employee benefits approaches.  The Foundation did so, and was not compromised in any way by the potential payment of commissions.  Rather, it did so consistent with its belief in people centered health, making recommendations solely on the basis of the expressed and unique needs of individuals and families.  Over time, WHF also figured out how to lead users beyond the normal insurance acquisition question toward ways for them to build their own health improvement plans.

Many individuals made WHF their broker of record.  Through this, WHF began to build a revenue source that was expanding over time.  The challenge for the organization was that the commissions, while potentially long term revenue sources, were small for each individual and transaction.  WHF was in need of several hundred thousand dollars a year in revenue by the time its reserves reached a critical lowpoint.  

In 2012, despite continued growth in commission revenues, it became clear that these revenues would not be enough to sustain WHF.  The Foundation searched for grants to help it extend its strategic timeline, and was even successful with an award by the Washington State Attorney General for work that related to its mission and plans.  Several sponsors also helped to extend the Foundation’s strategic timeline.

These funds were spent by 2013, and this was when it became clear that WHF could no longer sustain its major base of operations through existing resources.  WHF sold off its XChange client base to an individual broker who shared WHF’s values, and suspended operations in 2013.