Mr. Speaker, I rise today to recognize an excellent article recently published in the New York Times. For years I have talked about the benefits of real managed care, not the managed cost model Republicans in Congress and the Bush…
Mr. Speaker, I rise today to recognize an excellent article recently published in the New York Times. For years I have talked about the benefits of real managed care, not the managed cost model Republicans in Congress and the Bush Administration blindly push at the expense of patients.
In his article, Steve Lohr presents the facts about Kaiser Permanente and its non-profit staff model health maintenance organization. For thousands of people in my district and millions across the country Kaiser provides quality, cost effective care, while still finding the resources necessary to be a leader in the development of health information technology. At the same time, Kaiser keeps costs down by effectively managing chronic conditions and educating healthy members to avoid chronic conditions down the road.
Tax credits and personal responsibility will do little or nothing to ameliorate the crisis of 45 million uninsured Americans. The Kaiser model is the most reasonable approach to creating a single-payer universal health care system. Obstacles to reaching the goal of universal coverage are many, but this article presents the hard fact that Kaiser is the future of American health care.
It is with pleasure that I submit the attached article, ``Is Kaiser the Future of American Health Care?'' for inclusion in the Congressional Record. The article originally appeared in the October 31, 2004 edition of The New York Times.
[From the New York Times, Oct. 31, 2004]
Is Kaiser the Future of American Health Care?
(By Steve Lohr)
Oakland, CA--After 18 years in private practice, Dr. Victor
Silvestre was exhausted from his lonely battle, day after
day, with a health care system that seemed to be working
against him. A general practitioner, Dr. Silvestre found it
increasingly difficult to get his patients appointments with
specialists, who tended to focus on lucrative procedures
instead of routine care. Paperwork and haggling with
insurance companies, he said, took more and more time.
``There just had to be a better way,'' he recalled.
For Dr. Silvestre, the better way was not across the border
in Canada, or in some affluent nearby suburb, but in his own
backyard, in Oakland. Two years ago, he joined Kaiser
Permanente, the huge health maintenance organization based
here. ``So many of the solutions, the ingredients of a more
rational system for delivering health care, were there,'' he
said.
It may seem unlikely, given Kaiser's past image as a ham-
handed H.M.O., but plenty of others are reaching the same
conclusion. High-level visitors from across the political
spectrum--the Bush administration and National Health Service
of Britain, for example--are coming to California these days
to look at Kaiser as an institution that is actually doing
some of the things needed to improve health care.
Obviously, there is no single model for revamping the
nation's costly, disjointed health care system, and Kaiser
certainly has its share of problems. But 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. ``Quality health care in America
will never be cheap, but Kaiser probably does it better than
anywhere else,'' said Uwe E. Reinhardt, an economist at
Princeton who specializes in health issues.
HEALTH care systems in most industrialized countries are in
crises of one form or another. But the American system is
characterized by both feast and famine: it leads the world in
delivering high-tech medical miracles but leaves 45 million
people uninsured. The United States spends more on health
care than any other country--$6,167 a person a year--yet it
is a laggard among wealthy nations under basic health
measures like life expectancy. In a nutshell, America's
health care system, according to many experts, is a
nonsystem. ``It's like the worst market system you could
devise, just a mess,'' said Neelam Sekhri, a health policy
specialist at the World Health Organization in Geneva.
In this political season, the health care debate has been
mostly about who will pay the bill. President Bush talks
about tax credits and health savings accounts that are
intended to give people more control over their care but
would also mean that they would pay more out of their own
pockets. Senator John Kerry wants the government to pay more,
and he has proposed a major, and costly, program to cover the
uninsured.
The favored solution of many liberals--and of no small
number of health care experts--is a single-payer system of
health insurance, covering the entire population and
underwritten by the government. For the foreseeable future,
that is considered politically off-limits, which was the
message Washington absorbed from the abandoned effort to
fashion a national health program in the Clinton
administration.
How to finance health care is only one side of the problem.
The other is how to deliver the care more intelligently, and
that is where the Kaiser experience holds lessons. Given the
demands of an aging population and steady advances in medical
technology, national health spending will continue to climb.
Yet by all accounts, there is plenty of waste--estimates
range up to 30 percent or more of total spending--from
unnecessary clinical tests, hospital stays and prescriptions,
and the bedeviling sea of paper used to handle bills, claims
and patient records.
``We're not going to spend less, but figuring out how to
get the most value out of our health spending is going to be
the big issue of the future,'' said David Cutler, a health
care economist at Harvard.
But Kaiser as a model? Wasn't Kaiser, an H.M.O., part of
the ``managed care'' movement that faltered in the 1990's
amid protests from doctors and patients? In fact, Kaiser,
with its origins in the 1930's and 1940's, when the
industrialist Henry J. Kaiser provided health care for his
construction and shipyard workers, has always been a hybrid.
The managed care concept of the 1990's was about having an
outside bean counter, usually an insurance company, looking
over the shoulder of the doctor--managing costs instead of
managing care.
Kaiser has a different setup with different incentives. 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.
The country's largest private-sector provider of health
care, Kaiser employs more than 11,000 physicians and 135,000
other workers, owns 30 hospitals and hundreds of clinics
and serves more than eight million members in nine states and
the District of Columbia. Seventy percent are in California.
Kaiser is both insurer and provider; employers typically pay
fixed yearly fees for each member, no matter how much care is
provided.
Clearly, Kaiser has its limits as a model for others. It is
unlike many mainstream health plans in that it is a not-for-
profit company--though one with annual revenue of more than
$25 billion and operating margins of 5 percent. Its
facilities tend to be large, and 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.
Still, most health care experts who have studied Kaiser are
impressed. ``Kaiser has a model that consciously manages both
quality and costs in a way that has been very effective,''
said Margaret O'Kane, president of the National Committee for
Quality Assurance, an independent group that monitors health
plans.
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.
Four months ago, Jose Flores, 44, a postal worker in San
Francisco, had double-bypass heart surgery. While still in
the hospital, he was enrolled in a program of education and
treatment, which is run by nurses and lasts a year. Patients
receive instruction on diet, exercise and cholesterol
management; smokers are placed in a course to help them quit.
Mr. Flores says he is on a drug regimen that includes beta
blockers and Lovastatin, a generic cholesterol-lowering
statin. He takes large doses of niacin, a vitamin that raises
the level of high-density lipoprotein, the ``good''
cholesterol that protects against heart attacks. He walks for
an hour, five days a week. His eating habits have been
transformed, too: fried foods were once a staple of his diet,
but no more. Blacklisted, too, are sour cream, cheese and
corn chips. ``Now, I try to avoid all that,'' Mr. Flores
said.
In Northern California alone, Kaiser spends $55 million a
year on chronic-care management programs. ``But what's really
expensive is if we don't take care of these people 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.
Yet Kaiser is in the midst of a several-year, $3 billion
program, called KP HealthConnect, to drastically improve and
integrate its clinical and administrative systems and Web-
based services for members. Once it is in place, Kaiser
clinicians will be able to tap into a vast but flexible
storehouse of data that uses intelligent software to
automatically flag potentially harmful drug combinations for
a patient or to suggest what treatments have been most
effective for other people who are of the same sex, age group
and--eventually--genetic profile.
Dr. Brailer, for one, checks in regularly on the progress
of HealthConnect. George Halvorson, Kaiser's chief executive,
said, ``Policy makers are looking to us as the cutting edge
of how health care can be supported electronically.''
Kaiser has had setbacks in the program. Last year, it
abandoned I.B.M. as its main partner on the project and chose
to go with specialized health care software provided by Epic
Systems, a private company in Madison, Wis. Despite the
switch, HealthConnect is scheduled to be rolled out during
the next couple of years across Kaiser's operations.
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.
The fee-for-service model exists because patient visits,
clinical tests and surgical procedures can be measured. They
are inputs, in economic terms. Whether those inputs are
effective is another matter.
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.
Dr. Francis J. Crosson, the executive director of the
physicians' side of Kaiser, said, ``Our future has to be to
compete on quality, offering people demonstrably better care
and better value.''
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.
Quality yardsticks are helpful, but they still measure
inputs--ones associated with better health--instead of
tracking how patients fare. The longer-term goal is for
health plans to use technology more, as leading companies in
the rest of the economy do. For the health plans, that may
mean constantly tracking patients, treatments and results.
``To have a real market for quality in health care, you need
a product,'' Mr. Halvorson said. ``And that means reliable,
timely information about outcomes, clinical-trial sorts of
databases that show things like, for example, 50-year-olds in
our system have fewer heart attacks.
``With the right information and the right incentives,'' he
added, ``capitalism creates very good solutions.''