While some are questioning the future of value-based healthcare under the Trump administration, Kaiser Permanente is doubling its efforts to bring value and affordability for millions of patients.
"At the end of the day, people are demanding value and people want more transparency about what's going on with the cost of care and the value that they are getting with the health care system around the country. That's going to continue," said Kaiser CEO Bernard J. Tyson.
Tyson is so confident about the consumers' request that he's investing on expansion of the model that's set a standard for other providers.
Last week, Washington Insurance Commissioner Mike Kreidler approved Kaiser's $1.8 billion acquisition of Seattle-based Group Health Cooperative, one of the largest managed care plans in the state. The deal, which was first announced in December 2015, expands Kaiser's well-known business model—one that combines hospitals, physicians and a health plan—into its eighth market, bringing an additional 650,000 members to Kaiser, boosting its health plan membership by 6%. The deal is expected to close February 1.
“We're not growing for the sake of growing in new markets,” Tyson said. “It really is to bring the value proposition to new markets around the country” and demonstrate the benefits of Kaiser's “proven” model, he said.
That 70-year old model, which is considered by many the gold standard for delivering value-based care to patients while also saving costs, is more relevant than ever as the health care system struggles to deliver affordable care, Tyson said, adding that “We are working hard to deliver on affordability, and that is very relevant to everyone I can think of—to families, the government, and employers.”
Oakland, Calif.-based Kaiser's take on value-based care has long been imitated. Large hospital systems, such as Danville, Pa.-based Geisinger Health System, Englewood, Colo.-based Catholic Health Initiatives and St. Louis-based Ascension Health, have moved into the insurance space as way to take on more financial risk and better control spending.
The Affordable Care Act, with its bundled payments and incentive programs, helped prod the health care system toward paying for value. That's led many to wonder if the shift will continue once the law is dismantled. If the ACA is repealed as President-elect Donald Trump and congressional Republicans have promised, programs driving the shift, such as the CMS Innovation Center and the bipartisan Medicare Access and CHIP Reauthorization Act would likely be axed or delayed.
Tyson isn't worried. “As people become more informed about expectations of the care delivery system, they are asking very different questions,” he said. “I think that will continue under the next administration.”
“Many people have concern that the Trump administration would move away from value-based care. Nobody really knows what the Trump administration is going to do…but I do know that without a movement toward value-based care there's no way to control spiraling health care costs,” said Bill Bithoney, a managing director with BDO Consulting.
While Kaiser isn't hunting for another acquisition just yet, the system is keeping its options open. “We first and foremost want to continue growing in core markets that we're already in,” Tyson said, and then look at opportunities in the “next zip code over.”
Kaiser currently operates in California, southern Washington, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia and Washington, D.C. Its operating revenue in fiscal 2015 was $60.7 billion.