Kaiser Permanente Challenges Peers to Take Ownership of the Healthcare Crisis

Cesar Villalpando, Senior Vice President & Interim Leader of Enterprise Shared Services, Kaiser Permanente
Cesar Villalpando, Senior Vice President & Interim Leader of Enterprise Shared Services, Kaiser Permanente

Growing up as a Mexican immigrant in the United States, Cesar Villalpando thought about health care more than the average youngster. His family lived without medical or dental insurance, accumulating nonurgent health needs until the next trip back to Mexico. “It wasn’t until I played sports that I even knew what an annual physical was,” he notes. “That really opened my eyes to the tiered nature of health care.”

Now an executive leader at Kaiser Permanente—an organization noteworthy for developing integrated health care well before the Affordable Care Act (ACA) became law—Villalpando has seen those different tiers from countless angles. He shares his insights with Hispanic Executive.

Since you began your tenure at Kaiser Permanente, what changes have you seen, both good and bad, in the health-care industry?

Health coverage and health care are still out of financial reach for too many families. You see all the examples of families forced to choose among groceries, housing, and health care. America should not be about that. The ACA is really a culmination of this pattern that’s been there for years. As consumers are becoming more sensitized to the health care they’re getting for their money, they’re getting much savvier. You hear the term “consumerism” sweeping over health care. Individuals are getting more involved in choosing their coverage, and much more information is available now about the price of health care and the quality. At the end of the day, it’s really about empowering the consumer. I think it’ll make us that much more accountable and responsive to the people we serve.

At the risk of oversimplifying, why do you think it took the ACA for that to change?

Right now health care consumes almost 20 percent of the gross national product. That’s crowding out those basics like groceries or housing I talked about earlier. But I think we finally reached the tipping point where consumers, businesses, and the government, said enough is enough. We have to do something substantially different to change that trend. We cannot afford to sit idly on the sidelines and watch health care bankrupt America.

How is Kaiser Permanente in particular approaching the new healthcare landscape?

We are a prepaid, integrated model. That means when you choose Kaiser Permanente, you get medical insurance, which we call health plan coverage, and you get hospitals, doctors, nurses, pharmacists, physical therapists, and phlebotomists. The idea is that by having this team of people under one roof, they are working seamlessly to provide you with the best care possible. It has proven to be much better than traditional, disorganized, fee-for-service health care.

What are the tangible benefits of comprehensive care for the patient?

If you’re a member of Kaiser Permanente in Northern California, for example, your risk of dying from heart disease compared to those who are not Kaiser Permanente members is reduced by 30 percent. The chance of experiencing a stroke is 40 percent less. Chances of dying from cancer: 10 percent less. These are just some of the many examples in the prevention field. In the areas of infectious disease and hospital-acquired infections, we’ve made such advances that if you happen to be under the care of a Kaiser Permanente physician, your likelihood of experiencing severe illness from a hospital infection is reduced by anywhere from 30 to 50 percent.

Can you give an example of this?

There is a deadly infection known to spread in hospitals that leads to sepsis. Kaiser Permanente looked at a large population of patients to track when they were confirmed to be septic. After looking upstream to monitor their symptoms, we designed sophisticated models of the early signs of sepsis or soon-to-be sepsis. That led to more aggressive testing and faster intervention with IVs and drugs, ultimately reducing the chance of death from that highly fatal disease. In that area alone, we reduced the sepsis mortality rate in our hospitals by 50 percent. We then published studies on that practice and made it nationally available. Many other institutions have adopted it.

Talk more about the challenges one might experience with the “traditional” approach to healthcare.

It’s what I call old-fashioned health care: the fee-for-service mentality where the more complex or invasive the treatment received, the more that institution/provider can bill. I think the ACA actually does a good job of flipping that equation and providing incentives for health-care providers to be more about prevention and not just after-the-fact intervention for an injury or illness. Facets of the health-care industry that have traditionally worked in a highly disaggregated fashion are trying to quickly come together to build partnerships and behave the way Kaiser has for 70 years. They’re going to have a lot of challenges, but at the end of the day, this is what’s best for the individual consumer.

As interim leader of enterprise shared services, how is your division impacting care for members?

My charge specifically is to embed robust, shared-services practices that allow the organization to deliver consistent, high-quality service to our customers. When you visit a Kaiser Permanente doctor, more likely than not you can leave the doctor’s office, walk down the hall, and have your prescription filled. That’s a good example of a shared service. My job is to make sure we capitalize on our size, have the best process for filling that prescription locally, and negotiate the best drug prices possible, so we can pass those savings along to our patients.

What new technologies is Kaiser using to facilitate the process of integrated health-care systems?

Kaiser deploys the largest database of electronic medical records in private industry, allowing our clinicians to help members manage their care through almost all the different health-care settings. For instance if you were in the hospital, we have access to the care delivered to you while in that hospital, the follow-up doctor’s office visit, the prescriptions you’ve received in the pharmacy, and any lab tests you had done­—all in one record. So you can imagine the advantage this provides to the patient and the clinician to enable coordinated care. Our members also have a wide array of tools that allow them to interact with us in the manner most convenient to them. This year we expect to deliver about 17 million e-visits between members and their clinicians. It’s not for everyone, but for those patients who prefer that style of engagement (e-mailing their caregivers), that’s completely available to them.

How rapidly is the affordability factor being addressed? I’m assuming the ACA is facilitating this in a way that just couldn’t happen previously?

Within our organization there’s a strong commitment to lead the industry—to change this paradigm around making health care more affordable to all—so there are a lot of changes already happening within Kaiser Permanente as well as in the industry as a whole. We lead by not supporting narrow networks that limit the choice of which doctors you can see or which hospitals and pharmacies you can go to. We don’t think that reducing health-care costs should be about reducing options for our customers. We strive to transform how care is delivered, to improve quality of life for every individual, and we plan on doing so by using technology very aggressively to drive down cost and make health care more economically accessible to the average person.

Call us disrupters or call us protagonists on this journey, but this is absolutely what is needed in health care, and we want to set the example because we know if we do that, we’re large enough that we will provoke our peers in the industry to follow suit.

Are the more traditional providers warming up to the ACA, or do they still see it as something of a death knell?

A very large percentage of organizations out there are still looking for ways to work around the ACA. But again—we (the health-care industry) did this to ourselves. This is something that we caused, so those organizations are in denial. They won’t last long if they don’t change their mindset. When Kaiser Permanente recognized what was happening in the health-care industry, we welcomed the change and became strong advocates for the ACA even though we, too, would have to make significant changes. But that is part of the DNA of our organization—to look at ourselves and say, “How can I lead in this opportunity?”