Earlier this year, Bernard Tyson became CEO of Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, a $50 billion-a-year integrated delivery network that serves more than 9 million members in nine states and the District of Columbia. During a recent interview with Modern Healthcare Editor Merrill Goozner, the 30-year Kaiser veteran described Kaiser's approach to participating in the insurance exchanges, improving the health of the population it serves and how the organization views its not-for-profit mission. The following is an edited excerpt.
Tyson: Kaiser on a mission to make care more affordable
Modern Healthcare: The insurance exchanges are open for business. Tell us about Kaiser's approach to those exchanges on pricing and signing people up.
Bernard Tyson: We're excited. We've made a couple of critical decisions. One is that we want to play in every market in which Kaiser exists. No. 2, we have decided that we're going to bring Kaiser Permanente into the exchange. We have not created narrow networks. We're bringing what we bring every day in markets around the country. The pricing is based on being very affordable … and becoming even more affordable. So our pricing strategy is really what it costs us to provide care to given populations.
MH: Is your competition offering something different from what you're offering?
Tyson: Yes. Across the country people are getting a range of choices. The nice thing is that I do believe that's good for the consumer, and I also believe it's good for the healthcare industry because competition, a level playing field, is ultimately a good thing. We are working hard at getting even better, and I suspect our competitors are as well. That will improve care. That will improve quality. And hopefully, over time, it's going to drive down the entire cost of care.
MH: A new study said Kaiser has been extremely successful in gaining market share in California, your biggest market. Tell us what factors are allowing you to succeed in that market?
Tyson: It goes back to the value proposition. People want to know that they're getting access to the highest quality care possible. We are demonstrating that in how we are providing the care (and) the results that patients are getting from being part of Kaiser Permanente. And we are providing it at an affordable price. In addition, we are bringing more technology forward. Last year across the program of Kaiser Permanente, we had over 14 million secure office visits through technology.
MH: Half of healthcare reform is not about insurance expansion but about delivery-system reform. What are your goals on affordability?
Tyson: To continue to transform how care is provided. We are looking at multiple ways in which we can care for individuals and populations. Critical to that is the technology investments to make sure we have the best data to really look at evidence-based medicine, to make sure that we're figuring out how to make our members and patients understand what they are getting and how it's being provided and what else they can do to improve their health. We have a lot of that work going on as we go forward. We have a wonderful committed workforce of almost 200,000 employees and over 18,000 physicians. The technology is great. But if it comes without the brilliance of the people who actually make it all happen, it will be a failed strategy. We are working to keep the entire workforce engaged on this agenda of improving quality and making it more affordable.
MH: Does wellness and patient engagement play a role at Kaiser?
Tyson: We are intensely focused on early prevention, early detection, early treatment. We're number one in mammography screening; that is important because we can know what's going on early on to prevent breast cancer. We're doing that now with prostate cancer. We're doing that with colon cancer testing. Prevention is a big part of our agenda for wellness. We're heavily engaged in ways of getting the American people more active and exercising and walking and bicycling and swimming. We want people to get out and get moving. And then thirdly, we are focused a lot on what people are eating. We're really working on good food habits and how to think about the balance of how many calories you take in and are they good calories; and then how you're using them, so you can maintain weight balance and good health.
MH: How do you balance the fact that you are a business and have to make money with the demands being made on you about affordability?
Tyson: We are a not-for-profit organization, and one of the things that I'm working on is to get everyone to understand it really means that. I don't wake up every day thinking about how to make a profit. I don't wake up every day thinking about maximizing profit. We have to demonstrate a certain margin … because we borrow money and we have creditors who invest in our buildings to make sure that we have state-of-the-art hospitals. We provide care back into our communities and across the country because we are not-for-profit, and so we have that social responsibility. We probably make three cents on the dollar, about a 3% margin. That's how much we need to make (to) go back into the business. I don't have shareholders. … The beauty of that is our focus is on the mission of affordability, not on the mission of making more money.
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