Com­pe­ti­tion is ris­ing, and that’s not a bad thing

Modern Healthcare - - Q & A -

Bernard Tyson, chair­man and CEO of Oak­land, Calif.-based Kaiser Per­ma­nente, has led the health­care gi­ant since 2013. Be­fore his cur­rent role, he was pres­i­dent and chief op­er­at­ing of­fi­cer for the in­te­grated sys­tem that now has more than 10 mil­lion mem­bers in eight states and the Dis­trict of Columbia. Kaiser, which gen­er­ates more than $56 bil­lion in an­nual op­er­at­ing rev­enue, in­cludes 38 hos­pi­tals and about 17,400 physi­cians. Mod­ern Health­care Edi­tor Mer­rill Goozner re­cently spoke with Tyson about value-based re­im­burse­ment, the im­por­tance of com­pre­hen­sive elec­tronic health records with in­for­ma­tion-tech­nol­ogy in­ter­op­er­abil­ity and chal­lenges from in­sur­ance ex­pan­sion un­der the Af­ford­able Care Act. This is an edited tran­script.

Mod­ern Health­care: The fed­eral gov­ern­ment is push­ing for more value-based re­im­burse­ment. Do you think it’s mov­ing too fast or do you think the gov­ern­ment should be mov­ing faster in that di­rec­tion? Bernard Tyson:

I think we are mov­ing in the right di­rec­tion. I hope we move faster, but we can only go so fast and so far. If this is suc­cess­ful—and I ex­pect it will be over time—it will change the eco­nomics of the value chain, how we think about health­care and the fi­nanc­ing of health­care. Start­ing to pay for out­comes, to pay for the con­tin­uum of care, is go­ing to be of greater ben­e­fit to the eco­nomics of health­care.

MH: Kaiser is the model for in­te­grated sys­tems. Do you see com­pe­ti­tion ris­ing, repli­cat­ing your kind of val­ue­based care de­liv­ery? Tyson:

Yes, there is no ques­tion that we see com­pe­ti­tion ris­ing. That’s not a bad thing. The en­tire health sys­tem must im­prove. The com­pe­ti­tion helps us to get bet­ter, so we cer­tainly em­brace that. We have im­prove­ment agen­das in all parts of our or­ga­ni­za­tion to pro­vide higher-qual­ity, more-ac­ces­si­ble, bet­ter ser­vice, and more af­ford­able ser­vice.

MH: In­creased com­pe­ti­tion means that a pa­tient might want to be able to walk across the street and go to a dif­fer­ent sys­tem from one year to the next. Will pa­tients be able to take their elec­tronic health records with them? Where are we on in­ter­op­er­abil­ity? Tyson:

It’s re­ally a mat­ter of when. The health­care in­dus­try needs to have in­ter­op­er­abil­ity, just like we have in the bank­ing in­dus­try. How do we make that fluid enough where I can take my in­for­ma­tion wher­ever I hap­pen to be in the health ecosys­tem? In some cases part of the chal­lenge is that the EHR is not avail­able as the ba­sic build­ing block of what be­comes in­ter­op­er­a­ble in­side of the health ecosys­tem. We have a ways to go to bring the health­care in­dus­try up to this new stan­dard of hav­ing an elec­tronic record for every­body we take care of in­side the in­dus­try.

I am pleased to say that all 10 mil­lion mem­bers in Kaiser Per­ma­nente are on the EHR, to make sure all known and rel­e­vant in­for­ma­tion was avail­able to our physi­cians and care teams at the time it was needed.

MH: The Na­tional Co­or­di­na­tor for Health IT re­cently came out with a re­port that said many providers are en­gaged in data block­ing. They also looked at ven­dors and the lack of in­ter­op­er­abil­ity be­tween dif­fer­ent sys­tems. When some­body comes to Kaiser, do you have prob­lems get­ting their records? Tyson:

We have some prob­lems get­ting records from other or­ga­ni­za­tions, but I wouldn’t go as far to say it’s block­ing. There are just le­git­i­mate lo­gis­ti­cal is­sues that we work through. We try to make sure the in­for­ma­tion is avail­able when (pa­tients) need to go some­place else. It is not com­pletely in­ter­op­er­a­ble, although we have ex­per­i­ments with other health­care sys­tems. At Kaiser, with ev­ery­thing or­ga­nized in one EHR, when we need to send in­for­ma­tion out, we can make that hap­pen very quickly.

We also try to get lon­gi­tu­di­nal (pa­tient) data. It gives a more com­plete pic­ture of their care his­tory. This also helps with the eco­nomics of the health­care sys­tem. If we don’t have to keep re­peat­ing the same tests be­cause we don’t have the re­sults, that helps drive ef­fi­ciency up and health­care costs down.

MH: You have seen some episodic nurs­ing union walk-

“Start­ing to pay for value, for out­comes, for the con­tin­uum of care, is go­ing to be of greater ben­e­fit to the eco­nomics of health­care.”

outs and are in some pro­tracted ne­go­ti­a­tions. What’s driv­ing that con­flict?

Tyson: We set­tled re­cently with the big­gest nurs­ing union in Kaiser Per­ma­nente, the Cal­i­for­nia Nurses As­so­ci­a­tion. Ev­ery­one ex­pected we were go­ing to have ma­jor prob­lems and a mas­sive pro­longed strike. We came to the ta­ble with trans­parency and a will­ing­ness to work to the right con­clu­sion that would show our nurses how much we re­spect them, that we need them and that they have a voice. And we ob­vi­ously want to con­tinue to pay a com­pet­i­tive pay pack­age.

I ap­plaud the lead­er­ship of the CNA and (Ex­ec­u­tive Direc­tor) RoseAnn DeMoro and oth­ers who came to the ta­ble and were re­al­is­tic and clear about their ex­pec­ta­tions. A big part of their agenda is to make sure that man­age­ment hears that nurses want a greater voice in the fu­ture of where health­care is go­ing.

MH: Kaiser has al­ways had an em­ployed physi­cian model. What are those doc­tors in­side Kaiser feel­ing to­day, in terms of their re­la­tion­ship to the or­ga­ni­za­tion and the added pres­sures on them, and also the pres­sures that are com­ing from the out­side?

Tyson: This too, is where we see the im­pact of a trans­form­ing in­dus­try. Our physi­cians are in­de­pen­dent of the health plan, in the Per­ma­nente Med­i­cal Group, and self-gov­ern in­side of those mod­els. We have seen a big shift in pri­mary-care physi­cians be­ing in greater de­mand in the en­tire in­dus­try, and as a re­sult, (we see) dif­fer­ent ap­proaches to at­tract more pri­mary-care physi­cians into dif­fer­ent groups around the coun­try.

I think that will con­tinue. There are a lot of perks now—prob­a­bly more for pri­mary-care physi­cians at this point than for spe­cial­ists.

At a lot of sys­tems out­side of the Kaiser Per­ma­nente model, physi­cians need to get ap­proval from the in­sur­ance side for ev­ery pro­ce­dure they want to do. We would never do that.

MH: On the in­sur­ance side of Kaiser, you are com­pet­ing in­tensely on the ex­changes in the states where you op­er­ate. You also of­fer high-de­ductible plans like other in­sur­ers. What new chal­lenges does this pose for Kaiser?

Tyson: There is a cer­tain seg­ment of the new mem­bers from the Af­ford­able Care Act who have never had in­sur­ance and don’t know how to work the health­care sys­tem. Some in this pop­u­la­tion have only used the emer­gency depart­ment for care, so ed­u­cat­ing them and mak­ing sure they un­der­stand the to­tal ben­e­fit of what they have signed up for is a big pri­or­ity for us. It also will help to make their care more ef­fec­tive and ef­fi­cient be­cause they are not show­ing up in the ED. We of­fer high-de­ductible plans within Kaiser Per­ma­nente, and peo­ple have told me they don’t like it. Peo­ple ask, “Why am I pay­ing you $50 or $100 bucks ev­ery month for care and then you charge me an­other 50 bucks when I come in? I don’t have that kind of money.” We’re hear­ing that frus­tra­tion. High de­ductibles are a con­cern be­cause you end up with pa­tients drag­ging out care that re­ally needs to be pro­vided, and their con­di­tion gets more and more se­ri­ous.

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