George Halvorson: The communicator

In mid-2003, about a year into his 11-year tenure as CEO of Kaiser Permanente, George Halvorson realized the organization had a problem that was limiting its ability to recruit new members.

Surveys showed the 8 million people then signed up for Kaiser insurance plans liked its team-based approach to care. But to outsiders, bombarded daily by news accounts highlighting the patient backlash against HMOs, belonging to Kaiser, the nation's largest integrated delivery system, meant not having a relationship with a personal physician. And if you really wanted excellent care when faced with a serious illness, you had to go outside KP.

The reality was far different. Then as now, Kaiser, whose model since its founding in the 1940s combined the insurance plan with service providers under one umbrella, ranked among the best performing healthcare systems in the country for both quality and outcomes. But Halvorson couldn't communicate those facts to outsiders since Kaiser suffered from internal problems that still plague many healthcare systems across the U.S.

Each of the system's eight regions had different electronic medical records. Its then 30 hospitals and scores of clinics had 125 different accounting systems. Though it had the highest quality and was lowest cost in most of its markets, Kaiser couldn't pull together the data to tell that story.

External communications suffered from the same fragmentation, which made coming up with a unified strategy for altering perceptions next to impossible, he recalled in a recent telephone conversation from his home office in Sausolito, just north of San Francisco. Each region touted its own brand and had its own advertising campaign.

Each hospital ran its own communications shop and operated independently from headquarters. When a big issue hit the Los Angeles Times shortly after he got the top job, he had to make three calls—to headquarters public relations, to the regional staffer and eventually to local PR—to find out what was going on.

To tackle those problems, he came up with a solution that might seem strange coming from a leader who learned healthcare on the insurance side of the business. Halvorson had begun his career at Blue Cross of Minnesota. He had helped knit together HealthPartners, a mini-Kaiser in that state, which he ran for 18 years before being recruited by KP's board and top medical staff.

“I knew there was great power in having a redemptive ad campaign that encouraged the best behaviors,” he said. “It was really good for the staff morale in seeing ads about the great things being done by the organization. And you want the patient feeling good about receiving great care.”

Halvorson moved quickly to correct the organization's most pressing internal problems. He set it on a path for common records and accounting systems. He streamlined Kaiser's administrative structure, eliminating many regional positions.

But he simultaneously launched a campaign to create an entirely new image for the organization, one that would communicate his vision for healthcare to both internal and external audiences. He tapped Bernard Tyson, then running Kaiser operations outside California, to run it.

At first Tyson, who would succeed Halvorson as CEO in 2013, thought it was a demotion, an effort to get him away from day-to-day operations, which traditionally had been the surest path to advancement in Kaiser. But Tyson soon realized “he wanted me to work on a brand strategy so people would really know who we are,” Tyson recalled. “It was a fun job that translated into one word, which is 'thrive.' ”

A dozen years later, the award-winning “Thrive” ad campaign by Detroit-based Campbell Ewald agency remains ubiquitous in California and other Kaiser markets, often using “West Wing” star Allison Janney for instantly recognizable voice-over. Some ads promote healthy nutrition, exercise and prevention. Others highlight the care Kaiser gives people faced with life-threatening or life-altering conditions.

That two-track branding strategy reflected a vision for the future of healthcare that Halvorson had developed over the two decades he spent managing an insurance company-based integrated delivery network in Minnesota. He had already documented that vision in Strong Medicine, which was published by Random House in 1993, and, a decade later, in Epidemic of Care: A Call for Safer, Better, and More Accountable Care, which he co-authored with George J. Isham, who remains the medical director of HealthPartners.

Delivering on the vision begins with a relentless focus on delivering high-quality care at an affordable cost, and then demonstrating that achievement to patients, staff and employers, who pay most of the freight. “A brand is a belief system,” Halvorson, who this week was given Modern Healthcare's Marketing Visionary IMPACT Award, said. “If people believe the No. 1 value is to improve health, then everything you do is interpreted in the context of improving health. If people believe the No. 1 thing is to save money, then people believe the No. 1 thing the organization is about is saving money.

“So we created a two-tier brand for Kaiser Permanente,” he said. “The 'Thrive' brand was the public brand and the brand with our employees. But we also created a 'Best Care' brand: We had the best research, the best data, the best information flow. That was the insider brand … We did a brand for the heart and a brand for the head.”

Tyson was charged not only with coming up with the brand, but with developing the data to demonstrate the organization was living up to its claims. Kaiser physicians began using the new data systems to measure performance on care processes and outcomes, develop registries to drive best practices and identify at-risk patients. They used data to document and then steadily improve the quality of care, eventually publishing over 1,500 papers in the medical literature.

“The focus was on the building block of the electronic medical record and our ability to look at data … to determine if we were delivering the best care possible,” Tyson said. “He was willing to bet the farm on that.”

Growing up in the tiny town of Menahga, Minn., Halvorson, now 68, was surrounded by farms. His father taught in the local high school; his mother was the librarian. His grandfather and father both served as mayor of the town and president of the local Lutheran church. “When I listen to Garrison Keillor, it's like going home,” he said. “My mother didn't think it was funny. She thought that is the way it is.”

He attended Concordia College, his parents' alma mater, in Moorhead on the western side of the state. While there, he picked up the writing bug. Besides editing the college literary magazine, he worked part-time at the Fargo (N.D.) newspaper as an obituary writer. “It was great training,” he said. “It was unforgiving. If you make a mistake in an obituary, the family will never forgive you.”

His college years coincided with the turbulence of the late 1960s, and he was no bystander. One of his first non-obit pieces for the paper reported the experiences of an African-American friend who had been denied a room rented to another white friend a short time later. In the winter of 1967-68, he got “clean for Gene,” working in the anti-Vietnam War presidential campaign of Minnesota Sen. Eugene McCarthy—the poet senator—whose strong showing in the New Hampshire Democratic primary led President Lyndon B. Johnson to withdraw from the race.

He wanted to pursue journalism as a career, but after a half-year internship at the Wall Street Journal, already married with a child on the way, he applied for a job in Minneapolis as underwriter at Blue Cross, thinking that was some type of assistant writing position. Coincidentally, the organization was also looking for someone to assist the ad director and work in public relations. “The guy in H.R. thought it would be funny to put a guy who applied for a job as an underwriter in that job,” he said.

But they also thought it was important for him to understand underwriting, so they sent him off for classes in how to form risk pools, which he loved. “I liked the mathematical,” he said. “I have found that training has been very useful over the years in many, many conversations.” He soon moved into market research and eventually strategic planning.

By the mid-1980s, the HMO revolution was gathering steam. He began a long relationship with Dr. Paul Ellwood, a pediatrician and one of the founding architects of HMOs as co-convener of the Jackson Hole Group that advised President Richard Nixon on healthcare reform. (The late Sen. Ted Kennedy of Massachusetts would later express regret for not accepting Nixon's 1971 offer of universal coverage through competing managed-care organizations, a model that was later incorporated into the failed “Hillary-care” reform effort under President Bill Clinton.)

Ellwood had set up a think tank called Interstudy in Minneapolis, which drew healthcare leaders from across the country to learn about managed care. Halvorson worked closely with him in setting up Blue Cross' first plan. Before that, “We'd tell doctors to tell us what your fee schedule is and we'll pay it,” he recalled. “We even used to send out letters reminding the doctors to raise their rates because we didn't want problems in January and February. The doctors and hospitals enjoyed that world.”

He knit together about two dozen physician-run clinics to form the new network, which began competing with plans run by groups like the Hennepin County Medical Society and Park Nicollet. As executive director, he met constantly with the practices to learn what they needed to do to live in a world where they received a set payment for each member. “We learned capitation from doing it,” he said.

He eventually became CEO of the plan, which was later merged with three hospitals into HealthPartners. The experience laid the basis for his first major book. But after Strong Medicine appeared in 1993, public opinion turning against the managed-care model. Halvorson turned to the airwaves and newspapers.

“We ran full-page ads showing 100 babies who were at high risk of being born prematurely who weren't born prematurely, really cute,” he said. “We showed an Africa-American woman who had gotten a heart transplant after not wanting one, who was back doing social work and she said how it had transformed her life. Other health plans were doing just the opposite—trying to recruit healthy people. We went against that flow. It was incredibly good for staff morale.”

HealthPartners blossomed, earning a reputation as one of the best health plans in the nation. Secure in his C-suite position, Halvorson rekindled his youthful idealism by getting involved in a number of international projects.

He partnered with Land O'Lakes to set up clinics in Uganda. The agricultural non-profit treated their cattle, HealthPartners their people. They set the clinics up to be self-sustaining—earmarking 10 cents of the $1 monthly premium for administration—and locally-run. The World Bank now uses the model in other parts of the world.

Records from the Ugandan clinics were also fully computerized. “We could track malaria case patterns in the villages based on that database,” he recalled. “We came back to the U.S. and said: If we can do it in Uganda and completely eliminate paper, we can do it in the U.S. Kaiser doesn't have a single piece of paper today. It was inspired by Uganda.”

When members of the Kaiser board reached out to recruit him as a replacement for Dr. David Lawrence, who had presided over the most troubling period in KP's history, he at first demurred. The organization had lost money for three straight years during the mid-1990s, and consumer groups in the late 1990s repeatedly blasted the organization for imposing factory-style medicine in its bid to keep costs in line.

But then he received a phone call from Karen Ignagni, then head of the predecessor organization to America's Health Insurance Plans. In the mid-2000s, he would become AHIP's chairman. “She said I was crazy. 'Everything you're trying to do at Minnesota, you can do at Kaiser Permanente. You're doing it in the people's republic of Minnesota and nobody will think it's transferrable. But if you do it for 9 million people instead of 900,000 people, people will believe it's true.' ”

“I urged him to do it because the leadership he deployed in Minnesota was pathbreaking in terms of working with hospitals and physicians,” said Ignagni, now CEO of the New York not-for-profit insurer Emblem Health. “I thought his emphasis on wellness and care coordination would fit in very well with the Kaiser system.”

Halvorson would become a key voice on AHIP's board pushing for universal coverage and cost control before Barack Obama was elected president. The group eventually threw its support behind the Affordable Care Act. “The integrated delivery systems are positioned to attack it from both sides,” she said. “He was a very influential in both discussions.”

During his last years at Kaiser, Halvorson increasingly relied on key lieutenants to direct the day-to-day operations, especially Tyson who became chief operating officer. “He wasn't hands on. He was clear about needing outcomes. He weighed in when he needed to, but he didn't micromanage,” Tyson said. “He made sure he had the right people working on the right project.”

“A brand is a paradigm,” Halvorson said. “It creates an expectation and tells you what ought to happen.” With the mission and key lieutenants in place, he devoted an increasing amount of his time to communicating Kaiser's core message to its 175,000 employees.

In September 2007, he began authoring a weekly Friday letter to employees, delivered by e-mail. The letters were not exhortations. Whether on patient-focused care, registry outcomes, reduced medication errors or any other subject, they celebrated Kaiser's accomplishments. “He loves to write,” Tyson said. “He crystallizes his thinking through writing. When you want to know what he's thinking, you'll find it on those pages.”

If Kaiser lost any luster in the last years of his tenure, it was on the issue of costs. “Kaiser got to be Kaiser because they were a price leader,” said Dr. Mark Smith, who ran the California HealthCare Foundation during most of the years Halvorson ran the organization. The pair served together on numerous boards and commissions, including most recently on one looking at problems at the Veterans Health Administration. “They haven't been as aggressive because of the nature of their contracts with physicians and the unions, and inertia. Others have been more aggressive,” Smith said.

Halvorson, who published Don't Let Health Care Bankrupt America: Strategies for Financial Survival in 2013, remains sensitive to the criticism. “America is going to get optimal pricing as soon as it starts rewarding optimal pricing. What the market gets right now is what it rewards. Providers who are most efficient and have the lowest price don't get any more volume for that,” he said.

Smith, a long-time Kaiser member, lauded the turnaround executed during Halvorson's tenure, and called him one of the nation's leading voices on the importance of care coordination and the use of data to improve quality and outcomes. “He stepped out as a leader in the way the policy world thinks care should be delivered,” he said. “There was a time when Kaiser was considered second-class care and a place where doctors didn't want to work. Now it's perceived as a leader.”

Halvorson may have left Kaiser in 2013, but he hasn't left healthcare. He is now putting his communication skills to work on solving one of the most difficult problems society faces: the permanent intellectual deficit unnecessarily imposed on many children growing up in poverty during the first years of life. One of his recent stresses the importance of talking and reading to children before age 3.

Gov. Jerry Brown appointed him to chair the First 5 California Commission, which is using $500 million from tobacco tax money to focus attention on early childhood development. “We have schools where 40% of minority kids can read and 80% of majority kids can read and it's all because those kids weren't read to when they were kids,” he said. “Only 30% of low-income mothers read to their kids every day.”

Data-driven as always, he said surveys show most of these mothers are unaware of the long-term impact of failing to read and talk to their children. But when told about those consequences, they universally want to do the right thing. “We have to get that 30% to 60%,” he said. The commission has launched a $25 million advertising campaign, “Talk Read Sing,” that is running during San Francisco 49ers football games and other spots likely to reach the targeted audience.

His next set of books, however, will be on strategies to avoid the types of conflicts that have engulfed communities like Ferguson, Mo. or Israel's West Bank. He used some of the wealth earned during his 40-year career in healthcare to create the Institute for InterGroup Understanding, which will work on developing reconciliation strategies for any country or community riven by racial, ethnic or tribal conflicts.

“I'm now working on world peace because healthcare reform was too hard,” he said of a refrain from his recent speeches. “Most audiences laugh except people in the healthcare world.”