Kaiser Permanente Hawaii, the largest medical insurer in the state, has fallen behind the competitors in the volatile healthcare business.
Ron Vance, the new president of the Kaiser Foundation and Hawaii Health region, painted a sharp financial picture of employees in a recent memo, which indicated that the health plan is losing “significant sums of money each year,” behind our competition. a member's affordability, access, convenience and experience ”with“ no plan to achieve sustainable growth. ”
“For over 60 years, Kaiser Permanente has been at the forefront of patient led care in Hawaii, but changes in the market have challenged the way we work and do business,” he said in the letter. “As a result, our finances have been in the wrong direction for some time.”
“We have no clear pathway to a positive balance sheet – and without this we will not be able to continue to deliver the care and service that our patients and members expect and deserve,” he said.
Kaiser is the largest health maintenance organization in the state – both a medical provider and a health insurer covering over 250,000 members and has an exclusive contract with doctors in its network. It only applies to market share with the Hawaii Medical Service Association, which has 729,000 members.
The health plan recorded a gradual loss of $ 88 million in the third quarter and a loss is expected “which could be significantly higher” in 2020, said Vance.
“This is unsustainable,” he said, adding that Kaiser's national program office must lend almost $ 400 million to the region in recent years.
In its effort to achieve financial sustainability Kaiser has delayed some $ 370 million of maintenance and capital projects, said Vance, adding that the backlog and construction for the future could cost more than $ 2 billion. wear.
“Incremental change and a laundry list of cost saving initiatives are not sufficient to ensure our future,” he said. “It's not enough what we've always done.”
Vance said that Hawaii's health plan must “become more affordable”.
“It costs us to buy more healthcare policies compared to our competitors. And the difference can be significant, ”he said. “This is not how we would like to serve our community. We need to reduce our costs and improve our margins so that we can fulfill our mission of offering quality care at a competitive and competitive price on the market. ”
Kaiser spokesman Laura Lott said Vance was off the island and was not available to comment on the memo. She previously stated that in early 2020 an HMO is developing a long-term strategic plan to reduce costs and ensure that members' expectations of quality, service and affordability are being met.
Paul Tom, president of. T Working with large employers and trust funds covering around 50,000 employees and their dependents, other health plans have been far more competitive than Kaiser in recent years. That's because Kaiser members were not able to get their choice and appointments in a timely manner.
Access to care
In the letter, Vance admitted that the health plan and more than 400 physicians in the Hawai Permanente Medical Group are not working well together.
“We need to fundamentally rethink how we provide medical care. Our members want easier access to their terms. They need the care they need when needed. They want to be able to call or make video chat with a doctor after hours or, if necessary, get urgent care personally, ”said Vance. “Today it can be too long to schedule an appointment over the phone, often the online process is not ready and it is difficult to see a selected practitioner. In summary, we are ahead of our competitors in this field. We must be innovative and re-establish ourselves as a leader in the delivery of health care or may not be left behind. ”
Kaiser competitors say patient portals, video visits and access to urgent care more convenient, he said.
“If you can't make appointments and get the doctors you want, then you will choose other plans. If people think they need an appointment, they don't want to stay long, ”said Tom. “It was too small that Kaiser is not competitive and the gap (between his health plan and other market plans) is growing. We have gone too far, and to correct it now we are going to make a great effort on everyone's part. ”
Medicare, the government's health insurance program for the elderly, and HMSA were aggressive with new payment models, including bundled payments and set monthly repayments to physicians no matter how many times patients visit the doctor, in an effort to cover care costs. increase health. Repayments are based primarily on quality outcomes and patient satisfaction.
Because the HMO is not in line with the contest, some employers are choosing a freeze roll or an end to Kaiser altogether, Tom said.
One issue is that Kaiser is cutting “a larger share than large employers' entitlements to large employers” to offset Tom's lower prices. Health insurers form small groups to determine premiums and increases on the more dispersed rate, and large employer rates are based on the use of medical benefits.
“One of the problems we see is that they want to be competitive with small plans and, as a result, they expect the big plans to subsidize the small plans,” he said. “What employers and employees have to pay, if it is not affordable, of course, is not to be registered in the plan.”
Kaiser founded his health plan when his Honolulu hospital was opened in 1958. He is expanding primary and specialty care on Oahu, and a $ 60 million medical building in Kapolei is slated to be completed in 2021.
In 2017, the HMO took control of three Maui County hospitals in the largest privatization of state history, and promised to invest more than $ 50 million to expand services and update technology to improve patient care. The following year he received 6.2 acres under his Wailuku Medical Office for $ 22 million for future reform and expansion.
In recent years, Kaiser has been challenged by the Queen's Health System over its demands as unfair billing practices and recent negotiations with the nurses' union.
The company has made a number of leadership changes in recent years following the departure of President Janet Liang since 2007 and moved to the Northern California Kaiser region in 2014. Mary Ann Barnes, who retired in 2017.
The interim regional President Bill Caswell began until 2018, when Kaiser hired Dave Underriner, who suddenly stood down in October. Kaiser Vance announced as a new interim regional president in an email screen shot of an iPhone memo while searching for a permanent leader.
While the company faces challenging times, Kaiser's integrated healthcare system, which competitors have wanted to emulate in recent years, has been valued by Tom.
“But in everything if you leave it and don't pay attention to it, it's not effective and does not respond to members,” said Tom. “Our market is competitive and recognizes it (Vance). It is not assumed that we are almighty and that no one can contact us. They are beginning to find out about the cost of health care, particularly when it comes to drugs, it affects everyone. The problem is that it had not been viewed objectively by the previous Chief Executives. They were looking at him with colored rose glasses. This person has taken the glasses and is looking at the reality of their delivery system. ”
Letter to employees Kaiser at Honolulu Star-Advertiser on Scribd