One key target is the product supply chain that is, the supply chain for the medical devices and supplies used to deliver those healthcare services. ADOPTING A NEW APPROACH TO SUPPLY CHAIN MANAGEMENTĪs the Affordable Care Act legislation takes hold, the company is looking for new sources of cost savings while continuing to improve the quality of the healthcare services it provides. In 2011, KP received top marks from the National Committee for Quality Assurance in 20 out of 77 effectiveness-of-care measures-that is, proactive illness-prevention measures such as weight counseling for children, comprehensive diabetes care, and antidepressant medication management. KP's emphasis on health maintenance and low prices encourages members to engage in routine checkups, wellness visits, and lifestyle counseling. People who have traditional fee-for-service plans are more likely to have to contend with skyrocketing premiums, escalating copayments, and out-of-pocket costs that can vary widely depending on the physician seen and the facility visited. Members typically pay a monthly premium and fixed copayment for visits and procedures and in turn can choose from a wide range of KP clinics, hospitals, and clinicians. The focus on collaboration and integrated information systems has made it possible to realize substantial cost savings, which KP shares with its members, offering some of the lowest insurance premiums in the markets it serves. Through e-visits and telephone consultations, for example, KP doctors are able to access patient records and consult with patients electronically, resulting in fewer unnecessary visits, better medical outcomes, and higher patient satisfaction. As a result, virtually every detail about a patient-from doctor visits to postsurgical treatments-is in the system, improving both clinicians' ability to administer high-quality care and patients' experience of the treatment process.
One of the factors that have made this collaboration work so well is KP's huge investment in cutting-edge information systems, which give KP providers access to patient records all across the program. Additionally, it has put an infrastructure in place to provide quality-of-care oversight and to keep everyone focused on a common goal, namely keeping people healthy and out of the hospital. KP has carefully coordinated its clinical services-primary, secondary, and hospital care-to promote and provide higher quality healthcare. The company has remained committed to providing affordable, high-quality healthcare ever since.Ĭollaboration among the various KP entities has been key to realizing that commitment. With roots dating back to the 1930s, Kaiser Permanente was formed following World War II, when many people could not afford to go to a doctor. All told, the Kaiser Permanente organization has 37 medical centers and more than 600 medical offices located in nine states and the District of Columbia. The KP organization consists of three separate legal entities: the nonprofit Kaiser Foundation Hospitals, the for-profit Permanente Medical Groups, and the nonprofit Kaiser Foundation Health Plan and its subsidiaries. Headquartered in Oakland, California, Kaiser Permanente is the largest nonprofit health plan in the United States, serving more than 9 million members. Taking the next step, the company is making innovations in its supply chain that will make it possible for the organization to thrive-not just survive-in the new era. Since its establishment in 1945, the KP Medical Care Program has focused on high-quality, affordable care. In an industry where employers and consumers for decades absorbed year-over-year cost increases, the Affordable Care Act catapulted most healthcare providers into a new world, where survival will require a laser-sharp focus on cost and efficiency without compromising patient outcomes.įor Kaiser Permanente (KP), by contrast, the Affordable Care Act ushered in the next phase of work, one that was already very much in progress. government in 2010, is designed to make health coverage more affordable and available.
Patient Protection and Affordable Care Act, enacted by the U.S. Ironically, as treatment options become more advanced, fewer people are able to afford them. 1 Costs have skyrocketed across the board, including hospital stays, doctor visits, pharmaceuticals, lab tests, new technologies, healthcare administration, and health insurance premiums. The issue is particularly acute in the United States, which not only spends more per capita on healthcare than any other country but also has seen spending rise as a share of national income for decades-from 10 percent in 1985 to 17 percent in 2010 to a projected 25 percent in 2037. In most developed countries, health spending is rising faster than incomes.
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