Buying health insurance benefits from Kaiser Permanente could be cheaper than it is, but because of some unusually high costs, the company charges more than it should, according to Dr. Benjamin Chu, the president of Kaiser's Southern California region.

Chu was one of several featured speakers late Monday afternoon in Orlando, Fla., at the Healthcare Financial Management Association's Annual National Institute. Chu also is the group president of Kaiser Foundation Hospitals and the Kaiser Foundation Health Plan.

Though the subject of his 75-minute talk was using healthcare information technology to improve community health, Chu deviated from the script at the end of his presentation to more than 400 attendees to comment on criticism that Kaiser's health coverage is more expensive than that sold by other major health insurers. Kaiser insures about 8.9 million people in 11 states.

Chu defended Kaiser's prices, saying that the not-for-profit insurer actually charges less than its competitors on a benefit-to-benefit basis. “We're about 10% cheaper, but we could be a lot cheaper, to be honest with you,” he said. In fact, Chu said Kaiser could be 15% to 20% less than its competitors absent some high cost factors. Those factors include high labor costs and the expense of replacing 10 of his region's 13 hospitals with new facilities, he said. Separately, Chu said Kaiser is unlikely to expand its operations in new markets by itself as the cost of building an integrated delivery system of hospitals, physicians and health insurance plan, all under one corporate umbrella, is prohibitive. But, he said Kaiser is open to the possibility of partnering with an existing system in a new market to create a Kaiser-like operation. “If you're sick of Blue Cross, WellPoint, we could talk,” Chu said.