Cost Reduction at Heart of Healthcare Evolution, Says Kaiser Permanente CEO

Kaiser Permanente Chief Executive Officer, Bernard Tyson believes healthcare accounting in the U.S.is evolving so that the focus is gradually becoming a balance of costs and care.  This will see hospitals continue to provide important medical provision, but their roles would be less central.

In interviews and engagements, Tyson has reiterated that as patients continued to pay out-of-pocket, they were beginning to look for alternatives that would lower the price paid. This could be what forces the healthcare industry to evolve.

Turning the healthcare sector upside down

The Kaiser Permanente CEO said: “It’s evolving. I mean, the center gravity of health care is still the hospital setting. I think as more people are paying out-of-pocket, they’re asking the harder questions of the industry: What are the alternatives? Why am I taking this? How else can I get what I need? And rightfully so. They’re asking the right questions.”

“You’re going to continue to see the healthcare industry evolve. You’re going to continue to see the hospitals playing a critical role, but not the central role,” Tyson explained.

Instead of patients going to hospitals and pharmacies, Tyson believes players in the health industry should be proactive and go where the patients are in a manner that would turn the sector “upside down.”

“For the future, what we have to do is push care out to where the patient or member is. That’s our reimagined idea — care anywhere. What we’re trying to do now — what we will do — is turn this industry upside down. Rethinking the patient experience has really opened up the imagination here,” he said.

Patients more aware of health sector and are driving change

Tyson said people were now more aware of the health economy and how much they spent on healthcare; this was the biggest push factor for change in the sector.

He said it was important for players in the healthcare industry to realize that affordability and improved service were central to any health solutions they might implement, adding: “The work we have in front of us in the industry is to build a more affordable system that covers and cares for the American people.”

In February this year, Kaiser Permanente Washington Health Research Institute (KPWHRI) Executive Director, Eric Larson said the company had begun a movement to improve healthcare in America over the next 10 years, saying there was a need to align “financial incentives to best serve patients, their families, and their communities  —  versus making big profits for insurers, providers, and drug companies. Putting patients first is what health care systems like ours are built to do.”

With the surge in digital health solutions, Kaiser Permanente believes devices such as wearables can reduce costs for patients and also reduce the need for people to visit hospitals. The company says it has the single largest comprehensive electronic medical record system in the U.S..  With it Kaiser can determine predictive models that will make the health sector more efficient and effective.

Tyson explained that the company wanted to move healthcare upstream and find models for the prevention of chronic diseases. The company also wants to diagnose and treat chronic diseases early, “so people have a better chance at living healthy lives. This is all part of the innovative thinking that will be required as we move forward as a society.”

Kaiser Permanente leading in lowering costs

Kaiser Permanente has been working on a cheaper, more cost-effective health model that focuses on several issues. Among those issue are electronic patient records, voluntary screening for members so they can get advice and early treatment.

The strategy also looks at developing personalized treatment guidelines and the creation of the Garfield Innovation Center.

To illustrate its commitment to transforming the health sector, in May 2018, Kaiser Permanente joined the Health Care Transformation Task Force (HCTTF), a group of leading health care payers, providers, purchasers and patient organizations. The aim of the taskforce is to move the healthcare sector towards value-based models that support better health, better care and lower costs.

Kaiser Permanente is the largest private integrated health care delivery system in the United States. It provides care to more than 12 million members in eight states. Its sheer size, in conjunction with its integrated system that includes a network of providers, hospitals and insurers, allows it to be the leader in cost reduction.