At a Crossroads, Kaiser Permanente in Georgia Changed Course
Kaiser Permanente in Georgia found itself at a crossroads four years ago. The popular health services and insurance provider was being phased out as a state government employees option, affecting tens of thousands. Kaiser also admitted internally that it had too few primary care staff physicians, too few specialists of any kind, too few locations and limited service hours.
Further, Kaiser had begun to confuse the health care community by signing service agreements with doctors in downstate locations where it had no offices. One of Kaiser’s senior executives today puts it this way, “It was impossible to know who we were. You couldn’t describe it.”
Kaiser did have a loyal following and considerable strengths. First, it provides insurance and care and no other Georgia provider does both. Second, as a non-profit it focuses on how to decrease costs. “The goal is to keep out patients out of the hospital,” said Dr. Alison Wiebe, senior director at Kaiser’s new advanced care center in Kennesaw. Third, it pushes technology; Kaiser members have access to their medical records on the internet and through mobile apps.
Fast forward since 2008 and Kaiser Permanente in Georgia says it has completed two-thirds of the journey to establish a stronger medical care and insurance footprint in metropolitan Atlanta with an eye to once again become competitive for the state contract that it lost four years ago.
State of Georgia provider contracts that expire next year cover almost 700,000 employees, dependents and retirees. Georgia reduced the number of vendors during the current five-year contract; it also dropped Blue Cross Blue Shield of Georgia. The state estimates it saved $47 million in administrative costs. United Healthcare has 89% of the state business and Cigna has the rest.
Losing the state contract was not the only reason Kaiser recognized it must reinvent, but it was a sizable cannon shot across the bow. Kaiser has long been very good at practicing Minivan Mom Medicine – the simple diagnose-and-treat procedures that young families typically need.
But often it came up short for patients with advanced medical requirements, for instance, adults who needed cardiology or neurology care. “Our patients would complain that they would come in for a primary care visit but when they needed a specialty they had to go right back to the community,” said Daniel Styf, Kaiser’s vice president for regional and marketing strategy in Georgia.
Kaiser Permanente’s current Georgia strategy is threefold: Expand its primary care physician group, expand in-house advanced medicine specialists and offer 24 x 7 x 365 service at some locations. “We’re about two-thirds of the way to becoming a complete integrated delivery system,” said Styf. “We need two more years to complete the journey.” The company has also recommitted to its Atlanta-area strategy; there is no more discussion about downstate service.
Four years ago 80% of primary care physicians who saw Kaiser Permanente in Georgia patients were staff doctors; today that is 99% with 200 new doctors hired. Advanced care specialists such as cardiologists, neurologists and oncologists were 20% Kaiser and 80% non-Kaiser. Sixty percent are Kaiser physicians now and that will increase to 80% within two years.
Notably, there are more Kaiser locations – 29 total. Twelve opened since 2009, including a new Athens location. Why Athens? Kaiser has a contract with the University System but until this year it could serve only Atlanta-area university employees. “They are very aggressive with their pricing,” said University system vice chancellor Tom Scheer. “Kaiser seems to work for us.”
Access to service was another hurdle that Kaiser needed to address. Its clinics had limited evening and weekend hours. That is not a full service medical model and it often forced Kaiser members to rely on hospital emergency rooms or urgent care clinics.
Last month Kaiser debuted all day, all night, every day services in the new $47 million, 80,000 square foot advanced care center in Kennesaw. Kaiser expected 500 after-hours patients in May; there were 1,200 visits. “Anytime you open a service like that and within the first week you’ve seen 300 patients you know that the need has been there,” said Dr. Twiggy Harris, lead internal medicine physician at Kaiser in Kennesaw.
The Kennesaw location is similar to the model Kaiser operates in eight other states. “Our national accounts saw what Kaiser was like in California. Everything was integrated, everything was housed like this,” Dr. Harris said as we toured last week. “When they came to Georgia everything was fragmented. (We) didn’t have any service after six o’clock. Where do you go if you need to see a specialist? Now we are able to present that we are a Kaiser delivery model. That is how we are different.”
Kaiser Permanente has invested $150 million to open and upgrade Georgia facilities since 2008. Around-the-clock services like those in Kennesaw will be available next year in Duluth, then later in Sandy Springs and Jonesboro.
The Kennesaw facility will keep patients for up to 23 hours before it decides whether they can be discharged or require hospitalization. Kaiser has agreements with Northside and Piedmont hospitals and Children’s Healthcare of Atlanta. In emergencies, any doctor can obtain a Kaiser patient’s history by calling a toll free number that is staffed 24 x 7.
With 237,000 members, Kaiser is still a relatively small but aggressive Georgia health insurance player. It has five percent of the university system employees; Blue Cross Blue Shield has the rest. Kaiser also has contracts with Cobb, Gwinnett, DeKalb and Clayton counties, and Kaiser is an option for Atlanta-area federal employees.
“The key difference between what the federal government does and what the state government has done is the federal government does not require us to be in every county of the state,” said Styf, “nor do they require us to be in every state of the country.” Kaiser’s private sector Georgia employee clients include AT&T and Walmart.
Most of Kaiser’s continued Georgia expansion over the next two years will be personnel. The 29 metro Atlanta locations could expand by a small number but the emphasis will be staff. Styf said Kaiser is immediately able to handle at least 50,000 new members and up to one-half million total within two years, or twice the number it serves today.
Kaiser lost 45,000 state employees and their families four years ago. “Everything we hear from the leadership in the House, the committee chairs and the leaders, they are supportive of adding more choices to the state health benefit plan,” Styf said, adding that Kaiser talks with the state “any chance we get.”
More about Kaiser Permanente
Kaiser Permanente traces its history to 1933 and a tiny hospital in Desert Center, California opened by Dr. Sidney Garfield to care for sick and injured workers who were building the Los Angeles aqueduct. Later, Garfield established similar care for Grand Coulee Dam construction workers. World War II brought Garfield’s prepayment medical model to the attention of industrialist Henry Kaiser and President Franklin D. Roosevelt.
Kaiser was seeking a solution to provide medical care for 30,000 workers at his shipyard in San Francisco. Intrigued with Garfield’s earlier successes, Kaiser asked that President Roosevelt waive the doctor’s military obligation so Garfield could remain stateside and serve the country by creating medical care for Kaiser’s defense industry workers. Roosevelt agreed.
After World War II, Kaiser and Garfield were convinced the prepayment model could have a civilian application. The Permanente Health plan was launched in northern California. The company was renamed Kaiser Permanente in 1952. It consists of two main divisions – the not-for-profit Kaiser Foundation Health Plan and the Permanente Medical Group.
Kaiser Permanente has about 8.9 million national members. That is small by health insurance standards; Blue Cross Blue Shield has 100 million national members and several other insurers have between 10 and 20 million. But as a non-profit and a care provider, Kaiser is unique.
Kaiser has also become an important research player. The federal Centers for Disease Control financed a Kaiser Vaccine Study Center research into the impact of the MMRV vaccine given to 150,000 children. MMRV is a two-step vaccine given to prevent measles, mumps, rubella and chicken pox. Kaiser also participated in a vaccine safety analysis of 200,000 adults who received shingles vaccines shots.
Kaiser Permanente in Georgia membership is diverse:
Private Sector 135,035 55%
Public Sector 37,456 15%
Federal Government 28,298 11%
Medicare & Medicaid 27,122 11%
Individuals & Families 19,123 8%
(Mike Klein is Editor at the Georgia Public Policy Foundation)
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