Kaiser seen as a model for health care overhaul

Sacramento BeeFebruary 18, 2013 

Sharon Brandon, 59, watched her cousin and her auntie die in a matter of months. Her beloved mother went in two weeks. Big Mama, the grandmother who famously distrusted doctors, lasted four months.

Cancer, too far gone to halt, took them all.

Were it not for a persistent Kaiser Permanente doctor badgering her to get her annual mammogram, Brandon might have suffered the same fate. Turns out, the screening captured the image of a tiny white mass of 1.2 centimeters: Stage 1 breast cancer.

"I feel very blessed that the doctors caught it early," said Brandon, an Elk Grove teacher's aide who underwent surgery. She is getting radiation and reports feeling well.

Brandon's case exemplifies the Kaiser experience, experts say. That focus on prevention is what has helped Kaiser evolve from an HMO with a reputation for cut-rate, cookie-cutter care to the health care industry giant it is today.

In the four decades since President Richard Nixon officially threw the federal government's weight behind the concept of HMOs, Kaiser has shed its early growing pains and stigma, rising to become a national model for health care reform.

Today, Kaiser reports that it commands 43 percent of the privately paid insurance commercial market in Sacramento, more than any other health care insurer. In the greater Sacramento four-county region, Kaiser claims 30 percent of the market.

Kaiser operates 35 hospitals and boasts 5.5 million Californians as its commercial customers, collecting $23.3 billion in premiums annually, according to a Citi Investment Research analysis. That analysis concluded that the nonprofit company has captured 40 percent of the state's commercial and individual markets, more than any competitor.

Kaiser's upward trajectory is timely, coming as the Affordable Care Act stands poised to overhaul federal health care so that the industry, in effect, mirrors Kaiser's model of emphasizing prevention, wellness, integrated care and use of electronic medical records. Kaiser's top executive was among the influential players at the table in Washington, D.C., as the policies that would underpin the ACA were shaped.

California officials also have cited the Kaiser model as they move to carry out the federal health care overhaul here. The Legislature recently selected Kaiser as a model for other insurers to follow when they offer products through the state's health exchange.

"Broadly speaking, Kaiser is aligned with health care reform," said health policy analyst Micah Weinberg of the Bay Area Council, a nonprofit economic advocacy group. "In a lot of ways, the world of health care is seeing the need to become more like Kaiser."

It wasn't always this way. In the 1930s, when the company began as a prepaid group practice covering Kaiser Industries' workers who were building aqueducts and dams in the Mojave Desert, Kaiser was an outlier.

In the beginning, workers paid a nickel a day for medical coverage in case they were injured on the job. Even back then, prevention was key to a healthy workforce.

"We are pioneers in prevention," said Greg Adams, president of Kaiser in Northern California. "Prevention is in our DNA."

Over the decades, the HMO spread throughout the Golden State, with two separate operations – Northern California and Southern California – and another group employing their doctors. Kaiser early on adopted the strategy of requiring patients to see only Kaiser doctors and use Kaiser medical facilities, often located under the same roof.

There were times when the industry faced a backlash from customers who chafed against restrictions in their choice of doctors. But the model eventually caught on as a way to contain costs. By 2009, as co-pays and deductibles in traditional health plans rose exponentially, Kaiser's offer of preventative and specialty care with low out-of-pocket costs gained widespread appeal.

That year, President Barack Obama cited Kaiser Permanente in the same breath as the Mayo Clinic and the renowned Cleveland Clinic as examples of "efficient health systems … with lower costs … and higher quality."

Kaiser's problems

That doesn't mean Kaiser has been without problems.

In 2005, the California Department of Managed Care cited issues with access to mental health providers, long waits for a kidney transplant program, and in 2006, denials of payment for in-area, out-of-network emergency services.

In 2009, state regulators investigated a backlog of hundreds of patients waiting for autism assessments. Last year, regulators probed denials of payment for emergency ambulance services.

In all these cases, according to state records, the department ordered corrective action.

One of Kaiser's more public low points occurred years earlier, in 1988, when state regulators found a host of deficiencies, including delays of six weeks or longer before members were able to see a doctor.

According to state officials, Kaiser was undergoing a period of "unparalleled growth," particularly in the Sacramento area. In that one year, Kaiser in Northern California hired 400 doctors to keep up with patient demand.

Still, experts in the field note, in any health care delivery system, disputes and grievances inevitably crop up.

"What we're going to see is that our health care system is always going to evolve," said Wendell Potter, senior analyst, industry watchdog, and author of "Deadly Spin," a tell-all book revealing trade secrets of the health care industry.

"I do think that the Kaiser model is the right model," Potter said. "It's not perfect, but it's one of the best models of integration of care, the most effective way to improve costs and safety."

Potter gives Kaiser credit for "breaking down the silos protecting and separating the self-interests of insurance companies, doctors and hospitals."

With their streamlined approach, Kaiser executives said, they are able to provide that care at 10 percent to 20 percent lower than the market average.

"It's where we need to go," Potter said. "And we need to work to get to where integration of care is seamless."

Integrated health care

What does integration of care look like? Ron Groepper, Kaiser's senior vice president in the greater Sacramento region, relayed one patient's story:

A Kaiser member visited her primary care doctor, who heard something abnormal in her heartbeat. He ordered an ultrasound. The results came back, and he referred her to a cardiologist. The cardiologist, viewing the results, told her she had a heart valve issue. He prescribed medication. She picked it up and began treatment.

All of that occurred in a span of three hours and all at the same location, Groepper said.

That's what integrated care means, he said: smooth coordination among the various medical professionals so there's little delay and perhaps less hassle. Kaiser was among the first to introduce the concept of a centralized electronic medical record, allowing doctors to do their jobs without duplication.

A 2012 report from Health Leaders Media titled "Lessons from Kaiser Permanente's Integrated Delivery Model" notes that the age where the doctor alone is boss "is gone."

Instead, physicians must be team players, armed with information – and not ego – in the exam room, the report concluded.

Kaiser officials say they adapt to marketplace demand. As an example, they cited plans to expand services in the home and in assisted living facilities to meet the needs of aging baby boomers.

When members asked for alternative healing, the company added yoga, acupuncture and meditation sessions. In the maternity ward, each expectant mother gets a private room, and can choose to go through labor soaking in a tub of warm water for relief.

An iPhone app allows patients to communicate with their doctors, pull up their medical information, order prescription refills and download test results.

Leslie Margolin, CEO of the Margolin Group, has held top executive positions at Wellpoint, Cigna and Kaiser in California.

"Are they really the top of the heap? I think the answer is yes," Margolin said. "I don't think they do everything perfectly. But I think history has shown that in the last 10 to 15 years, they've done well with a fully integrated model and deliver better quality."

Certainly, Brandon would agree. Speaking at a recent Kaiser Permanente South gathering to honor doctors, nurses and others who persuaded patients to get their annual mammograms, Brandon said support from her Kaiser doctors helped her get through treatment with a positive attitude.

"I've talked to a lot of people 'outside' (Kaiser) and they say their doctors barely look them in the face," Brandon said. "I'm full of energy and everybody 'outside' says, 'You're supposed to feel awful.' This has been amazing."

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