For decades, health policymakers considered Kaiser Permanente the lode star of delivery system reform. Yet by the end of 1999, the nation’s oldest and largest group model HMO had experienced almost three years of significant operating losses, the first in the plan’s history. It was struggling to implement a functional electronic health record, and had a reputation for inconsistent customer service. But most seriously, it faced deep divisions between management and the leadership of its powerful Permanente Federation, which represents Kaiser’s more than 17,000 physicians, over both strategic direction and operations of the plan.
Against this backdrop, Kaiser surprised the health plan community by announcing in March 2002 the selection of a non-physician, George Halvorson, as its new CEO. Halvorson had spent most of his career in the Twin Cities, most recently as CEO of HealthPartners, a successful mixed model health plan. Halvorson’s reputation was as a product innovator; he not only developed a prototype of the consumer-directed health plan in the mid-1990’s, but also population health improvement objectives for its membership, both firsts in the industry.
During his twelve year tenure as CEO, Halvorson not only guided the plan to solid profitability, but added a million members in California, its largest market, despite a devastating recession and a national retreat of commercial HMO membership. He invested over $6 billion in computerized patient care systems and population health management infrastructure, healed the breach with Kaiser’s physicians, and markedly increased its consumer satisfaction scores, earning 5 STAR ratings under Medicare Advantage. He left the organization at the end of 2013 with more than $53 billion in revenues and more than $19 billion in reserves and investments.
This interview covers Halvorson’s time at Kaiser, his views of health reform, including the unfinished reform agenda, and his public health activism. It was conducted by Jeff Goldsmith, a veteran health industry analyst, and Associate Professor of Public Health Sciences at the University of Virginia. Jeff is a member of the editorial board of Health Affairs.
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