CEOs’ Urgent, Shared Commitment to Change


A few weeks ago, I joined five of my peers in health care leadership throughout the country to help launch Health CEOs for Health Reform, a coalition dedicated to transforming health care and creating a more sustainable health system. 

In mission, we committed to moving past policy concepts toward a detailed blueprint that would reconcile legislative goals with operational realities of the health care system. Our goals are lofty and the challenges immense. What struck me in recent months, with the current state of the economy, is the tremendous sense of urgency we all feel and the confidence we have that now is the time to truly transform health care. 

I read Michael Millenson’s post The Inevitability of Health Care Reform: This Time, the Politics Have Changed with great interest and personal reflection. What is different this time around? What do I think a handful of health CEOs can really do to change a system entrenched with waste and cost that does not add value to our very customer – the patient? 

First, it was clear to me last week that it is no longer “business as usual” for any of us. Health care reform can no longer be set aside or merely discussed. The New America Foundation has given us an opportunity to help make a difference and contribute to reforming our health system, but it is up to all of us to make the hard choices that will work – and every one of us will have to give up something for the better good.

As a medical doctor and a hospital administrator, I am proud to be a part of American medicine, but we can be much, much better. No other industry in the world tolerates the quality problems health care accepts as status quo. 

The defect rate in health care approaches 3 percent. Consider the gap in quality if other industries accepted a similar defect rate — about 2,000 airplanes would have unsafe landings a day, 12,000 checks would be withdrawn from the wrong account each day, and 20,000 pieces of mail would be erroneously delivered every hour. These levels of poor quality would be totally unacceptable.

As if quality standards were not enough to make the case, we’re also not getting what we pay for. According to a recent Washington Post article, U.S. health care represents about 16 percent of the gross domestic product (more per capita than any other nation in the world), yet we lag considerably in overall health. We’re 29th in infant mortality, 48th in life expectancy, and the worst of 19 industrialized nations in preventable deaths.

Our health care system is fraught with waste, which leads to poor quality and excessive cost. Nearly half of the $2.6 trillion in the U.S. health care system is waste that adds no value for patients and sometimes even causes harm. 

At Virginia Mason Medical Center in Seattle, we’re using our Virginia Mason Production System management method (modeled after the Toyota Production System) to show how health care can reduce cost while improving quality and safety. By eliminating the waste, we have seen over and over again improvement in quality, safety and the patient experience – all while reducing cost.

We’re seeing results in every area of our health system: ambulatory care, inpatient care, facility design, chronic disease management, finance, supply and the list goes on. As a result, we’ve created an environment where dedicated care teams can actually do their best work and have more value-added time with patients.

I’m confident patients in our country can get higher quality and safer care at less cost. It first requires participation of employers, health plans, government and others to truly achieve what is possible. 

At Virginia Mason, our work with employers, like Starbucks, Costco, Boeing and Microsoft, is yielding dramatic reductions in costs for those paying the bills; and better care, quicker return to work and more satisfaction for our patients. We, unfortunately, in the current payment system, reduce our profitability by doing the right thing. Despite my very supportive board of directors, they will not allow me to lead our organization into bankruptcy by doing the right thing. We need to change our payment system if we truly want to ensure universal coverage, improve quality and reduce cost. 

We all need to change our mindset and commit to our shared agenda of cost, quality and coverage. It will require delivery system reform and payment system reform. We must stop giving incentives to hospitals and physicians to do the wrong thing to provide non-evidence-based, non-value-added diagnostic and therapeutic interventions. 

We have seen what’s possible and we are anxious to share our experience improving care and reducing cost. It isn’t easy, but we are ready to roll up our sleeves and make it happen. The prize is worth it: quality, affordable health care for all Americans.

Gary Kaplan, MD is Chairman and CEO of Virginia Mason Health System in Seattle.