Is Kaiser A Model for the Future of Health Care?

Many people have decided that Kaiser has the ingredients of a more rational system for delivering health care. A recent New York Times article reports that representatives from the Bush Administration and the National Health Service of Britain, among others, are examining Kaiser as an institution that is actually doing some of the things needed to improve health care. Kaiser is a leader in the drive both to increase the quality of care and to spend health dollars more wisely, using technology and incentives tailored to those goals. Health care systems in most industrialized countries are in crises of one form or another, but the American system is characterized by both feast and famine: it leads the world in delivering high-tech medical miracles but leaves 45 million people uninsured. The United States spends more on health care than any other country––$6,167 a person a year––yet it is a laggard among wealthy nations under basic health measures like life expectancy.

The favored solution of many health care experts is a single-payer system of health insurance, covering the entire population and underwritten by the government. But how to finance such a system is only one side of the problem. The other is how to deliver the care more intelligently, and that is where the Kaiser experience holds lessons. Given the demands of an aging population and steady advances in medical technology, national health spending will continue to climb. Yet by all accounts, there is plenty of waste––estimates range up to 30 percent or more of total spending––from unnecessary clinical tests, hospital stays and prescriptions, and the bedeviling sea of paper used to handle bills, claims, and patient records.

Kaiser has a different structure with different incentives. It emphasizes preventive care and managing chronic diseases like heart disease and diabetes to keep people healthier. And that saves money because healthier people require less costly care like hospitalization. As the country’s largest private-sector provider of health care, Kaiser serves as both insurer and provider; employers typically pay fixed yearly fees for each member, no matter how much care is provided.

Possible Implications for Kentucky: Efforts to improve and transform our health care delivery system must be strengthened to emphasize preventive care and management of chronic diseases. Some medical researchers report that obesity is a major risk factor in disease, early mortality, and health care costs, contributing to heart disease, stroke, and cancer. The rates of obesity have more than doubled among adult Kentuckians since 1990, and the incidence of diabetes is rising sharply. Smoking has long been recognized as the leading preventable cause of death in the United States, yet Kentuckians continue to smoke at the highest rate in the nation. As a consequence, lung cancer and heart disease take a disproportionately high toll here. The public cost of health care spending will only expand with such problems and thus continue to crowd out other public priorities if left unchecked and unmet by aggressive public health efforts to educate, encourage healthier lifestyles, and effectively manage chronic illnesses. Too, technology offers immense opportunity for saving health care dollars and lives. In the last session of the General Assembly, Kentucky made real strides in this area. The savings realized could help meet the challenge of insuring more than half a million Kentuckians without health care coverage.(5)

Contributing Writer Billie S. Dunavent