Kaiser Foundation Health Plan

Kaiser Foundation Health Plan figures prominently as a health plan and provider among CHCC’s member organizations and their three million plan beneficiaries. Since April, 2007, CHCC and Kaiser have been meeting to discuss members’ concerns and to explore a new approach to the conventional health plan-purchaser relationship. We report some progress. Kaiser has agreed to consult with CHCC as it sets 2009 performance goals and to discuss a customized performance guarantee program in which Kaiser would accept some financial risk if it fails to meet specified quality benchmarks. These are good first steps. Moving forward, CHCC’s continued negotiations with Kaiser seek to establish:

1. A process for joint review of performance data and selection of quality improvement goals;

2. Improved communications between Kaiser and CHCC member groups and joint initiatives leading to improvements in health and health outcomes;

3. A Kaiser-CHCC performance guarantee program that provides premium rebates to CHCC member groups if Kaiser fails to meet jointly established quality thresholds;

4. CHCC input into Kaiser’s budget and rate setting processes, with fair application of rate-setting methodology across customers and markets;

5. Review of Kaiser’s financial reserve policies and use of unnecessary financial reserves to lower premiums.

In the nearly 45 years since the passage of Medicare and the health cost inflation spiral began, Kaiser has produced hope and disappointment. Hope springs from its labor-management model of care delivery – integrated, pre-paid, multi-specialty and facility-based group practice -- with potential to offer quality, affordable health care to all; disappointment comes with the uneven quality of care in the system, its growing lack of affordability and the marketing of high deductible health plans that achieve lower costs at patient expense.

If the Kaiser model won’t work, what chance do we have for a viable health care system for all? In our fragmented health market, no single purchaser can hold Kaiser or any other health plan accountable for lapses in quality and excessive costs.

By bringing together many large purchasers with common problems and shared solutions, CHCC aims for a balance in the Kaiser-purchaser relationship that will significantly benefit both.