Is Kaiser the Future of American Health Care?

By STEVE LOHR

NY Times

Published: October 31, 2004

 

AKLAND, Calif.

AFTER 18 years in private practice, Dr. Victor Silvestre was exhausted from his lonely battle, day after day, with a health care system that seemed to be working against him. A general practitioner, Dr. Silvestre found it increasingly difficult to get his patients appointments with specialists, who tended to focus on lucrative procedures instead of routine care. Paperwork and haggling with insurance companies, he said, took more and more time. "There just had to be a better way," he recalled.

For Dr. Silvestre, the better way was not across the border in Canada, or in some affluent nearby suburb, but in his own backyard, in Oakland. Two years ago, he joined Kaiser Permanente, the huge health maintenance organization based here. "So many of the solutions, the ingredients of a more rational system for delivering health care, were there," he said.

It may seem unlikely, given Kaiser's past image as a ham-handed H.M.O., but plenty of others are reaching the same conclusion. High-level visitors from across the political spectrum - the Bush administration and National Health Service of Britain, for example - are coming to California these days to look at Kaiser as an institution that is actually doing some of the things needed to improve health care.

Obviously, there is no single model for revamping the nation's costly, disjointed health care system, and Kaiser certainly has its share of problems. But according to economists and medical experts, 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. "Quality health care in America will never be cheap, but Kaiser probably does it better than anywhere else," said Uwe E. Reinhardt, an economist at Princeton who specializes in health issues.

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. In a nutshell, America's health care system, according to many experts, is a nonsystem. "It's like the worst market system you could devise, just a mess," said Neelam Sekhri, a health policy specialist at the World Health Organization in Geneva.

In this political season, the health care debate has been mostly about who will pay the bill. President Bush talks about tax credits and health savings accounts that are intended to give people more control over their care but would also mean that they would pay more out of their own pockets. Senator John Kerry wants the government to pay more, and he has proposed a major, and costly, program to cover the uninsured.

The favored solution of many liberals - and of no small number of health care experts - is a single-payer system of health insurance, covering the entire population and underwritten by the government. For the foreseeable future, that is considered politically off-limits, which was the message Washington absorbed from the abandoned effort to fashion a national health program in the Clinton administration.

How to finance health care 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.

"We're not going to spend less, but figuring out how to get the most value out of our health spending is going to be the big issue of the future," said David Cutler, a health care economist at Harvard.

But Kaiser as a model? Wasn't Kaiser, an H.M.O., part of the "managed care" movement that faltered in the 1990's amid protests from doctors and patients? In fact, Kaiser, with its origins in the 1930's and 1940's, when the industrialist Henry J. Kaiser provided health care for his construction and shipyard workers, has always been a hybrid. The managed care concept of the 1990's was about having an outside bean counter, usually an insurance company, looking over the shoulder of the doctor - managing costs instead of managing care.