The Sunday San Francisco Chronicle had a somewhat rambling interview with Kaiser CEO George Halvorson. The main isues he raised were:
a) the conversion from an acute to a chronic health system raises costs
b) Kaiser is committed to evidence-based practice improvement–and will spend $3bn on the EMR that is supposed to get it there–and that IT might reduce costs enventually.
c) Halvorson wants universal coverage but not single payer (but has no real idea how to get there unless Brazil is the model!).
d) Hospital consolidation has meant that Kaiser has had to continue building its own facilities. (My comment: because they can’t buy cheaply on the margin like they could in the mid-1990s).
e) As an HMO-only model they are in trouble from competition from high deductible plans, and institutionally a closed system like Kaiser cannot create these products.
His last comments are certainly true. For an example I plugged myself into the PacAdvantage system. (PacAdvantage is a small business buying coalition formerly known as CalHIPC). The Healthnet PPO saver with a $500 deductible and $2,500 max out of pocket is $72 a month. The Kaiser plan is the cheapest of the HMOs but it costs $137 for the same yearly maximum out of pocket–although it has no deductible. So the premium difference is $800 a year! Consequently Kaiser has been losing members to the high deductible lower premium plans, as employers push their employees towards them. Internally Kaiser had planned for growth in 2003, but instead it’s losing members overall.