NEW YORK - Although Soros Fund Management, the money management firm founded by health-care philanthropist George Soros, lost $2 billion in last month's market free fall, the losses will not alter Mr. Soros' planned charitable giving in Russia and other countries, a spokesman said.
The $2 billion loss on Mr. Soros' Quantum Group of funds represents an average 8.57% decline for the day. The seven hedge funds in the portfolio represent some $20 billion in assets.
Still, the billionaire financier and philanthropist never has been one to retreat from a problem, if his health-care giving is any indication.
Since 1979, Mr. Soros has contributed millions of his personal wealth to some of the world's poorest nations. Last year he invested $2.3 million to improve maternal and child health and medical education in Hungary. His network of foundations in 31 countries will provide $15 million to $17 million in grants and donations to health and medical programs this year.
Now, at age 67, the Hungarian-born money manager is upping the ante. In his largest gift ever, Mr. Soros will spend $500 million over three years in Russia. Roughly $100 million of that will be invested in public health projects, exceeding the United States' own $95 million total foreign-aid contribution to the former Soviet republic last year.
Mr. Soros' goals are lofty: He wants to cure Russia's menacing tuberculosis epidemic and begin repairing the country's tattered public health-care infrastructure.
In an interview with Modern Healthcare, a sister publication of Pensions & Investments, Mr. Soros said he is intervening now because Russia's health-care system faces a "crisis" and needs immediate rehabilitation.
"The authorities are not in a position to do enough about it because the state itself is in disarray," he said.
Over the next three years, Mr. Soros' philanthropic arm in Russia will fund several projects, with an emphasis on maternal and child health. That's because children, he said, "are the future of the country, and they are also in very bad shape."
'Open society' concept at work
Mr. Soros' benevolence is influenced by the writings of 20th-century philosopher Karl Popper. Mr. Popper introduced the concept of an "open society," characterized by, among other things, a democratically elected government, moderation in politics and respect for diverse opinions.
Mr. Soros' New York-based Open Society Institute promotes the idea by supporting educational, social and legal reforms and exploring alternative approaches to problems. The fall of the Soviet empire in 1991 presented Mr. Soros with a framework for helping build an open society there.
Mr. Soros, who lives in New York's Westchester County, acknowledges some personal reasons for focusing on Russia. His father was imprisoned in a labor camp there during World War I.
"Yes, I have some emotional ties, but I'm not in any way favoring Russia to the exclusion of other countries," Mr. Soros said.
Once the Russian reforms are in place, Mr. Soros plans to move on to other targeted health-care projects around the globe.
"This is only a temporary measure on my part until the (Russian) authorities are able to get their act together," he said.
Beginning in 1998, foundation leaders have proposed spending $7 million over three years to expand general practice and family medicine training in Romania. The country suffers from a lack of generalists, Mr. Soros said.
His philanthropic advisers also are assessing needs in Georgia and Mongolia. Those programs will begin in 1998 as well, although specific funding amounts have not yet been determined.
Will it make a difference?
Sources in the international aid community said the amount of Mr. Soros' gift to Russia is substantial, but the nation's health-care needs are larger. Whether it will make a difference depends on how the money is spent, they said.
If it's used to leverage other commitments of money and manpower, then it can have a much larger impact, said Christopher Harris, vice president for emerging issues and international programs at the Council on Foundations, Washington.
Mr. Soros can get the most bang for the buck by concentrating on small projects, working with schools and hospitals to share medical knowledge, for example, added a spokeswoman for the U.S. Agency for International Development.
At times his brand of humanitarianism has riled critics. This summer, for instance, Mr. Soros donated $1 million to make sterile needles available to U.S. drug addicts at risk of contracting HIV. And last fall, he supported ballot initiatives in California and Arizona aimed at legalizing the medical use of marijuana.
In comparison, the Russian initiative seems relatively noncontroversial. His goal is to replicate and expand existing pilot projects in three areas: maternal and child health, medical education and information, and health promotion and disease prevention.
Much of it boils down to "simple, basic low-tech intervention," explained Abbey Gardner, a regional director for Russia at the Open Society Institute.
Ms. Gardner said one possibility is to expand local projects in which maternity-ward physicians have been trained to encourage breast feeding, dramatically improving infant health. A lack of funding has prevented the model from being replicated, she said.
Russian women lack even up-to-date, basic information on what to expect when they are six months pregnant and how to care for a 5-month-old baby.
"Some people are using Dr. Spock if they can get their hands on it, which is obviously out-of-date American information that doesn't work in 1997," Ms. Gardner said. One solution, she said, is to commission a textbook author to fill the gap.
Support from health ministry
Mr. Soros and his staff have met with key leaders in Russia's Ministry of Health to garner their comments and approval. "Without the ministry's support, it would be impossible to successfully implement the program," Ms. Gardner said.
Officials hope to launch the Russian initiative within the next several months. Right now, they are busy canvassing the globe for an executive director to oversee the project.
Mr. Soros already has written a $3 million check for the Russia project. The money, part of a $12 million grant, will go for a three-pronged attack against Russia's rampant TB epidemic and poor infection-control practices. Later, at least $6 million will be devoted to eradicating TB in Russia's prison population.
The TB project will be headed by Alex Goldfarb, a researcher at the Public Health Research Institute in New York. Mr. Goldfarb's researchers will begin by collecting sputum samples in Russian jails. If those specimens show that prisoners will respond to drug therapy, then clinical researchers will begin training prison personnel to administer "directly observed treatment" programs.
According to the World Health Organization's 1997 report on TB, having health workers watch patients take their anti-TB medications is cost effective, cures patients and stops the spread of TB. Yet it is not widely used. Between 1991 and 1994, TB case rates in Russia climbed 42% and death rates soared 87%, the report said.
If the sputum samples collected in Russia's prisons show a high incidence of multiple drug resistance, "then we have a real disaster on our hands," Mr. Goldfarb acknowledged. Treating a single drug-resistant case requires expensive drugs and isolation.
A second leg of the TB project focuses on reforming treatment in the general population. Russians still rely on old X-ray diagnostic procedures and long hospitalizations to treat the disease, and they lack the drugs that have been shown to work. In the long run, Russia could save a lot of money on TB treatment, Mr. Goldfarb said, but first the old system needs to be dismantled.
"There's no point in throwing good money on introducing (directly observed therapy) protocols on top of an inefficient system," he said.
Mr. Goldfarb hopes to spend money on two or three pilot projects demonstrating the effectiveness of non-hospital, community-based treatment. "If we were able to help the Russians plan the transition from the traditional hospital-based system of TB control to the community-based (directly observed therapy) program .*.*. then I think we would accomplish something," he said.
The final $1 million of the $12 million grant targets poor hospital infection-control practices. The money will pay for a state-of-the-art laboratory where technologists and clinicians will be trained in modern microbiology.
Small steps
Foundation officials measure Mr. Soros' philanthropic success one program at a time.
One of their proudest achievements is a partnership with the city of Cluj, Romania, where they established "the first baby-friendly hospital in Romania," said Srdjan Matic, director of network medical programs at the Open Society Institute.
He said the city donated the building and spent $1 million on reconstruction. Mr. Soros' foundation in Romania spent $200,000 to $250,000 on equipment and supplies and introduced the idea of integrated medical teams, in which nurses, physicians, midwives and technicians coordinate care. The hospital offers privacy during labor and delivery, and newborns get to stay in their mothers' rooms.
But in his classic shoot-from-the-hip style, not even Mr. Soros can say whether he'll be able to make a difference in Russia.
"I don't believe in being able to calculate these things too closely, and we haven't made any profound needs assessment studies," he said. "We just recognize the need is there. We'll do the best we can."
Crain News Service
