The Economist reviews Kaiser Permanente health care

The “newspaper” The Economist originates in London, but it has a wide circulation, with almost half of its subscribers in the US. A recent issue contained a lengthy opinion of the health care provider Kaiser Permanente (KP).

Europeans tend to regard American health care with distain. French President Nicolas Sarkozy commented, after the passage of US health care reform, “Welcome to the club of states who don’t turn their back on the sick and the poor.” The Economist argues not only that KP is the best of a few “nuggets of good practice” in the US, but that Europeans could learn a few things from KP’s example.

Economically viable, quality care: Why don’t we have more of this?

The first item of praise is an economic one:

For the most part, the American health system is dominated by cream-skimming health insurers and the myriad “fee for service” providers they do business with, which drive up costs by charging high prices for piece work. KP’s business model integrates fixed-price health insurance with treatment at its own hospitals and clinics. This has led to big efficiency gains, making KP one of the cheapest health-care providers in most of the regional markets in which it competes.

The article goes on to praise the quality of care (“KP’s medical results are as good as its financial ones”), its comprehensive computerization of medical records, its investment in long-term care (wellness classes, preventive dentistry), and fixed salaries for doctors: “[U]nlike America’s many self-employed physicians, [KP doctors] have every incentive to share information with other specialists and no financial motive to order unnecessary procedures.”

So why aren’t there more health care initiatives that follow the KP model, both in the US and abroad?

The prevailing culture of health care in the country is difficult to overcome. Some American patients, used to having all the scans and consultations with exotic specialists they want, costs be damned, do not like KP’s frugal ways. By the same token, some freewheeling American doctors do not like KP’s rigid systems or fixed (albeit generous) salaries. Much the same applies in other countries: whether in politicised state-run systems or profiteering private ones, the incentives for doctors and patients are seldom as soundly aligned as they are at KP. “Most of its success is explained by culture,” says Alain Enthoven, a health economist at Stanford University, “and that is simply not easy to replicate.”

Reader comments and a disclosure

There’s an extensive collection of comments on The Economist article from both patients and doctors. Some comments dissent from the glowing praise of KP, but most opinions are favorable, based on positive experiences.

As a disclosure I should mention that KP has been my health insurance provider since 1995, when I move to California. I’m not an employee of KP, but I am a contractor, teaching in their Wellness Program.

The Economist article and many of the comments refer to the ease with which doctors and patients communicate by email and phone. One thing I didn’t see mentioned is that it’s possible to get an appointment very quickly, often the same day. Appointments are available in the evenings and on weekends.

I say this not to recommend Kaiser as a health care provider. That’s a personal decision that shouldn’t be based on any one individual’s opinion. Plus Kaiser is available only in a very limited geographical area — California, Colorado, and a few other states. The take away here is that health care can be done well in the US, but unfortunately — so far — it is not.

Resources:

Photo source: Working Nurse

Another American way, The Economist, April 29, 2010

Comments on Another American way

Frank Langfitt, ‘Economist’ Magazine Wins American Readers, NPR, March 8, 2010