...according to economists and medical experts, Kaiser is a leader in the drive both to increase the quality of care and to spend health dollars more wisely, using technology and incentives tailored to those goals.Maybe it's a little more efficient, but is it a really good idea? If the largest excess cost is due to the current overuse of medical resources by patients, this doesn't look that it's going to solve the whole problem.
...It emphasizes preventive care and managing chronic diseases like heart disease and diabetes to keep people healthier. And that saves money because healthier people require less costly care like hospitalization.
...Kaiser is both insurer and provider; employers typically pay fixed yearly fees for each member, no matter how much care is provided.
...it has a lingering reputation for practicing an impersonal, regimented style of medicine that limits patient choice, despite recent efforts like the creation of physicians' personal Web pages and e-mail communication with patients.
...Kaiser's approach is best illustrated in two ways: its management of chronic illnesses like heart disease and diabetes, and its $3 billion initiative to use information technology to improve clinical care and streamline operations.
Across the country, health costs are skewed. In any given year, 90 percent of spending provides care for 30 percent of the population, and more than half of total spending goes to 5 percent of the population. Much of it is spent on people with chronic illnesses like heart disease and diabetes. So helping people with those ailments stay as healthy as possible offers much opportunity for cutting costs - and for improving lives.
In Northern California, Kaiser has sharply reduced the death rate for its three million members there in recent years by monitoring and controlling blood pressure and cholesterol levels and by promoting the use of aspirin and beta blockers (to reduce the risk of heart attacks) and statins (to lower cholesterol). The death rate from heart disease among the Kaiser members is 30 percent lower than it is in the rest of the Northern California population, adjusted for age and gender.
"...what's really expensive is if we don't take care of [people who need chronic care] and manage their chronic conditions," said Dr. Robert Mithun, chief of internal medicine at Kaiser's medical center in San Francisco.
Dr. Mithun's comment may seem like no more than common sense, but it does not reflect the typical logic of the dominant fee-for-service model of health care. Most doctors and hospitals get a fee from insurers for each patient visit, clinical test, surgical procedure or day a patient spends in a hospital. In practice, the fee-for-service system is often an invitation to do more of everything - more visits, more tests, more surgery. What gets done is what gets paid for, and insurers usually do not pay for preventive care or chronic care management provided by nurses or in group classes, like the ones at Kaiser.
In the fee-for-service medical economy, doctors and hospitals routinely strike different deals at different fees with many different insurers. The results are complexity, inefficiency and a constant bureaucratic tug-of-war between health care providers and insurers over claims.
The Kaiser economy seems a world apart. "What works at Kaiser is the integration of the financing and delivery of care, and the aligned incentives that allow you to make more rational decisions about health care for members," said Ms. Sekhri, the policy expert at the World Health Organization, who has studied Kaiser.
Ms. Sekhri was a co-author of a 2002 report that compared Kaiser in California with the National Health Service of Britain. The report found that for comparable spending, the Kaiser system in California did a better job of keeping people with chronic conditions out of hospitals. And when Kaiser patients were admitted to hospitals, their stays were generally shorter. Recently, Britain sent groups of primary care physicians and hospital administrators to California to learn from Kaiser.
The Labor government in Britain may look to Kaiser as an efficient model for its health service, which is run by the government. But the Bush administration is more interested in Kaiser as a model for the efficiencies and integration that can be achieved through information technology.
In May, the Bush administration appointed Dr. David J. Brailer to the new post of national coordinator of health information technology. His mandate is to prod the nation's health care system into the computer age. Bringing patient records and prescriptions out of the pen-and-ink era promises to save both dollars and lives. The automation of an electronic system could sharply reduce medical errors, which are estimated to be responsible for 45,000 to 98,000 deaths a year, according to the Institute of Medicine of the National Academy of Sciences.
Kaiser has been investing heavily in information technology for years. Its clinical information system includes electronic records with a patient's history, prescriptions and preventive health recommendations. A doctor can call up a patient's X-ray or magnetic resonance image on a desktop personal computer. Electronic prescribing - a goal in the government plan - is routine at Kaiser.
The conversion of inefficient paperwork to a digital network also opens the door to fostering more efficient markets in health care. Markets rely on information, yet the health care economy is one in which information on patients, treatments and outcomes is trapped on paper and isolated in clinics, hospitals and insurance offices - instead of being shared, analyzed and compared, while still insuring privacy.
...In recent years, there have been efforts to focus on the quality of health care. The National Committee for Quality Assurance conducts annual reports based on a health plan's use of practices shown to improve patients' health, from timely prenatal care to cholesterol management. Kaiser plans consistently earn excellent ratings in the group's reports, and, this year, it had four of the five top-rated plans in the Pacific region, its stronghold.
...And the Kaiser system delivers quality while controlling total costs. A recent survey of health care costs in 15 metropolitan areas by Hewitt Associates, the human resources consulting firm, found that the cost for care per employee last year was lowest in the San Francisco area, where Kaiser members were about 35 percent of the insured population, at $5,515, and was highest in regions where Kaiser did not operate - led by New York, at $6,818 a worker.
Marketplace presented another option, based primarily on nurse practitioners.
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