Message from the CEO and Board Chair

Reflecting on Altarum Institute’s efforts and accomplishments in 2015, there is one dominant theme—dynamism. Energy, activity, change, and progress permeated all aspects of our work throughout the year.


Altarum exists to solve complex systems problems to improve human health. In 2015—as in every year—this bold calling is evident in our work across a wide range of health issues, affecting diverse populations and communities. This report highlights but a few of these efforts. We are proud of all our work; please check out more at

Altarum doesn’t succeed alone. We enjoy a growing list of partners— including government agencies, universities, and major health systems, to foundations and grassroots organizations. We are honored to work with them to accelerate progress toward a healthier future.


2015 marked the operating turnaround our team has worked so hard to create. As outlined in the CFO Message later in this report, our revenue and operating performance beat the 2015 plan and growth and is accelerating as we start 2016.

Altarum is strong financially, and well-positioned to increase investments—to expand its client work and to deepen its commitment to internally chartered research for the longer term.

A sincere and heartfelt “Thank you!” goes out to all colleagues across Altarum and its subsidiaries, Palladian Partners and KAI Research, Inc. Once again, they delivered exceptional results and helped place us on a path to long-term success.


With this “bounce” in revenue, we are rapidly adding the talented team members needed to deliver on our growing contract commitments. We have scaled up significantly over the last year. Our total headcount is up 18% (a net of 67 people!) from the same date in 2015. And, we have many more open positions.

Despite all this good news, the February board meeting had one bittersweet element. Due to term limits, Mary Ousley stepped down from the chair position and retired from our board. Mary loyally served us—through growth and challenge—leaving the Institute and its board stronger for her service. She loves Altarum, and is a mentor and a great friend. She will be missed.

On behalf of our leadership team and Board of Trustees, we look forward to making an even greater contribution in the years ahead.

Linc Smith, President and Chief Executive Officer
Rosemary Gibson, Chair of the Board of Trustees

Reducing the Burden of Childhood
Dental Disease

Tooth decay is largely preventable, yet is the most common chronic disease affecting children today—five times more common than asthma. In 2013, more than 60% of Medicaid-eligible children in Michigan did not receive any dental care. Untreated decay can affect development and quality of life and eventually can develop detrimental and costly long-term effects.

Altarum Institute’s second Center for Medicare & Medicaid Innovation Health Care Innovation Award is targeting more than 1 million publicly insured children in a collaborative effort with Delta Dental of Michigan, the University of Michigan School of Dentistry, and the Michigan Department of Health and Human Services, working to increase oral health screening rates, improve coordination and referrals between medical and dental professionals, and significantly reduce the level of adverse outcomes associated with untreated dental disease in this critical population.

The Michigan Caries Prevention Program is coordinating existing resources, is educating physicians and caregivers, and has launched an online portal for facilitating community connections, bringing dental providers together with the patients who may need them the most.

The program is also putting into place the technology infrastructure needed for integration and coordination between medical and dental communities: Michigan’s Dental Registry (MiDR). MiDR brings together patient-centric care information to allow more complete monitoring of pediatric oral health, leading the way for medical and dental providers to engage in sustained, systemwide improvement in health care delivery.

Since May 2015, the program has trained more than 700 providers, impacting more than 100,000 patients, increasing the number of children who receive these preventative services, and improving access to care.

For more information, please visit or

For more information, please visit or

Providing Cross-Training for Intimate Partner Violence and HIV Service Providers

Intimate partner violence (IPV) is a significant public health concern. Women in relationships with violence have four times the risk of contracting HIV or sexually transmitted infections than women in relationships without violence have. Because of these interrelationships, both HIV and IPV providers can benefit greatly from increased awareness of this intersection.

Altarum Institute’s Behavioral Health Technical Assistance Center Team, with support from the Office on Women’s Health, brought together HIV and IPV service providers in a first-of-its-kind cross-training approach to improve support for women in these areas.

The Intersections Project was a collaborative training effort among Altarum, Cardea Services, and eight local service providers in California, Texas, and Washington, D.C., bringing together clinicians, supervisors, case managers, counselors, social workers, and advocates from IPV and HIV systems of care and support.

The training ensured that providers were equipped with important tools to help clients receive comprehensive screening, current information on the intersection of the two public health issues, and effective referrals. The training led to powerful results. Seventy-five percent of organizations made changes to HIV policies and protocols and provided more educational materials to clients. One hundred percent of organizations improved referral resources and strengthened relationships with partner agencies.

Organization leaders and community stakeholders shared knowledge, built connections, and identified ways to better coordinate HIV and IPV services, contributing to systemwide change for women in need of support. “The training has changed the way we interact with our clients,” said one HIV service provider.

For more information, please visit



Improving Medical Care Operations
and Support for Veterans

With more than 21 million Veterans and 1,000 U.S. Department of Veterans Affairs (VA) medical centers in the United States, the need for quality health care and streamlined revenue operations has never been greater.

Altarum Institute’s Business Advisory Services group is helping Veterans Health Administration (VHA) enhance its revenue operations and shift its patient load from VOLUME TO VALUE.

Since the advent of the Patient Protection and Affordable Care Act (a.k.a. Obamacare), new health care delivery and payment models have emerged, leading to better quality and outcomes and lower costs. With the new law in place, Altarum has been reviewing contract language, providing revenue cycle analysis, and examining reimbursement claims data to determine regulatory compliance for VA insurance collections.

Since 2015, this analysis has saved the VHA approximately $44 million in revenue that the VHA would not have claimed otherwise and helped to collect an additional $2.7 billion from third-party payers—money that goes directly back into improving medical care operations and support for our nation’s Veterans.

For more information, please visit

Developing a Bureau of Economic Analysis Health Care Satellite Account

People expect precise measurement of prices and output for health, given its prominence. Yet only with the release of the Health Care Satellite Account (HCSA) in January 2015 has the Bureau of Economic Analysis (BEA) made progress in measuring the numbers of persons treated for medical conditions and the cost per person.

With a seminal 2009 study of national health spending by medical condition and a publication on cost per case and disease prevalence, Altarum Institute research strongly influenced the HCSA. As the HCSA initiative gained momentum and needed independent research, it was natural for BEA to contract with Altarum for methodological support.

Via two contracts beginning in September 2014, the Altarum Center for Sustainable Health Spending has updated and enhanced its methods while resolving related technical issues. We found among many results that in 2013, mental disorders topped the list of most costly conditions at $201 billion.

Products from this work include a blog post, “At Last: The Data to Routinely Discuss Health Spending by Medical Condition”; a BEA article, “Comparing Estimates of U.S. Health Care Expenditures by Medical Condition”; and a Health Affairs article. Altarum will complete other project activities (e.g., comparing health care prices produced by government agencies, further analysis of prevalence and cost per case) by the end of 2016.

Accurate measurement of productivity in the health sector requires accurate health care price information. Ultimately, this project should lead to more reliable estimates of the health sector contribution to the gross domestic product, potentially affecting tens of billions of dollars.

For more information, please visit

Improving Diversity in the Future
Maternal and Child Health Workforce

Maternal and Child Health (MCH) professionals increasingly need skills to help them anticipate changes, adapt, and transform how MCH services are provided throughout the health care system, including the areas of diversity, improved access, and quality of care. Recent studies show that 80% of the public health workforce has not yet received this type of formal training.

The Division of MCH Workforce Development, within the Health Resources and Services Administration’s Maternal and Child Health Bureau, is charged with providing education and training for future MCH leaders. In partnership with state MCH programs, academic institutions, and professional organizations, the Division collaborates with a range of programs to ensure the presence of MCH leaders at the national, state, and local levels.

Altarum Institute led representatives from the Division’s grantees and partner organizations in a collaborative yearlong process to develop a nationally focused multiyear strategic plan for MCH training. Subsequent workgroups helped to review, improve, and develop new performance measures to monitor training for MCH leaders more effectively.

The highly participatory process, which engaged representatives from each of the 11 categories of training grants in a 9-month virtual workgroup, resulted in several changes to existing measures that were adopted for use across all grant programs. Altarum also developed and facilitated a peer learning collaborative with the National Center for Cultural Competence to facilitate cross-program learning and expansion of efforts to increase the diversity of students in MCH training programs.

For more information, please visit

Helping the U.S. Navy Manage
Health Care Delivery

Since 2013, Altarum Institute has been working with the U.S. Navy Bureau of Medicine and Surgery (BUMED) to provide analytical and professional development support to Navy Medicine.

Our expertise has led to critical support and innovation in these areas:

  • Developing classroom and distance learning sessions on multiple health care topics

  • Designing metrics and scorecards for the Navy’s Strategic Hospital Incentive Program to help Navy hospitals meet performance targets,

  • Determining how well Managed Care Support Contractors are meeting access to care standards for primary and specialty care, and

  • Evaluating a host of health care management issues

In one example, this work has helped BUMED (1) decide where to put a new Navy health care clinic in order to reach as many underserved beneficiaries as possible and (2) assess compliance with TRICARE drive-time access standards.

By educating Navy Medicine managers and analysts in health care topics, issues, and analytical processes, Altarum is improving the Navy’s ability to effectively and efficiently manage health care delivery to our nation’s service members and families. By identifying where quality varies, the Navy can make data-driven decisions to improve the quality of care better.

For more information, please visit

Impacting the Health and Quality of Life
for Older Adults

The National Institute on Aging (NIA). One of the 27 Institutes and Centers of the National Institutes of Health (NIH), leads the federal government in conducting and supporting research on aging and the health and well-being of older people. In order to extend the healthy, active years of life, the NIA seeks to understand the nature of aging and the aging process, as well as the diseases and conditions associated with growing older.

KAI Research, Inc., a Contract Research Organization (CRO), is a wholly owned for-profit subsidiary of Altarum Institute. KAI has worked with the NIA to assist in the oversight of several of its large clinical trials. This has a direct impact on the health and quality of life for older adults, a rapidly growing segment of today’s society.

KAI does this by improving the quality and safety of clinical trials. It has been involved in training clinical investigators, monitoring the safety of study participants, and participating in large nationwide efforts to extend the healthy lifespan of older adults.

Some areas under study in NIA clinical trials include:

  • How to reduce falls in the elderly,

  • The effect of calorie restriction on extending the life span, and

  • Discussions of hormone replacement therapy and behavioral and lifestyle changes in older people.

This work has led to improved safety of clinical trial participants as well as higher quality study materials, and data available for scientific analysis. It has expanded KAI’s technical assistance and training capabilities to further improve procedures throughout the NIA.

For more information, please visit

Internally Chartered Research Centers

Altarum Institute launched these Centers with internal funds plus support from philanthropic organizations, grants, and contracts to leverage their work.

Each Center is delivering the insight, evidence, and policy models needed to accomplish meaningful and sustained reform of our health and health care systems.

Center for Consumer Choice in Health Care
This Center is designed to help employers assess the health engagement levels of their staff, through the use of tools like the Altarum Consumer Engagement (ACE) Measure™, and to help consumers better understand the scope of their own health care, including benefits, risk, and price.

Center for Elder Care and Advanced Illness
Our current health care system is not prepared to care for the oncoming age wave. This Center, with its focus on MediCaring™, aims to create the fundamental changes needed to build a compassionate, effective, affordable, trustworthy system, thus making it safe for all of us to grow old.

Center for Healthy Child and Youth Development
The early years are a critical period of growth and development. This Center promotes healthy child development through program evaluation, technical assistance, and advocacy, and helps to ensure that all children achieve their full potential.

Center for Sustainable Health Spending
Health spending has grown faster than the economy for decades, but where does it stand today? This Center utilizes innovative monthly economic tools to track spending growth, prices, and labor while advocating for meaningful change.

Center for Prevention
This new Center, started in 2015, addresses both high-priority health topics and cross-cutting initiatives. It focuses on three main areas – sexual health, aspirin health, and tobacco control, and makes preventing disease and promoting health a leading national priority.

With external funding from a major foundation and an association, plus internal funds, Altarum is defining and measuring the financial waste and potential harm to people resulting from low-value care. Reducing low value care is a top priority for the Institute’s internally chartered research agenda for 2016-2025.

Message from the CFO

2015 reflects an operating turnaround and the start of accelerating growth. In 2015, Altarum posted revenue of $76.0 million, up slightly from the prior year. However, this top-line revenue figure masks strength in Altarum’s internal operations.

As shown in the chart, 2014 net revenue (excluding subcontract and other non-labor costs) was down 6% from its 2012 peak. This decline was driven by effects of the federal budget sequestration. In fall 2014, we had cautiously budgeted 2015 net revenue down by another 2%. Fortunately, based on strong sales and aggressive hiring to respond to demand, 2015 net revenue actually beat this budget by 5%. These strong sales mean an even stronger 2016. The rightmost bar depicts 2016 budgeted net revenue. At nearly $65M, it’s up more than 11% over 2015.

For the second straight year, 2015 operating income was more than double that of the prior year. The Institute used this strong cash flow from operations as well as gains proceeds from the sale of short-term investments to pay down on its line of credit, which significantly strengthened the balance sheet. As noted in last year’s annual report, the Institute’s ratio of debt to net assets was cut in half from 2011 to 2014. The ratio was cut in half again over the last 12 months.

Most importantly, Altarum’s operating and asset strength positions us well to increase important investments in both the Institute’s internally-chartered research agenda as well as the growth of our client-supporting operations. Copies of audited financial statements for Altarum are available by written request.

Alicia M. Torres—Chief Financial Officer & Senior Vice President, New Ventures