What healthcare leaders need to know now

 

Bernard Tyson: Workers will share in healthcare costs, but cost shifting is not sustainable

By | September 18th, 2014 | Blog | Add A Comment

 

Bernard Tyson: “I strongly believe that healthcare is unaffordable in large part because it's siloed, and it's running off the wrong chassis.”

 

One in a series of profiles of Modern Healthcare’s Top 25 Minority Executives in Healthcare (sponsored by Furst Group)

 

At a recent New York Times conference on healthcare, Kaiser Permanente Chairman and CEO Bernard J. Tyson drew applause when he said that healthcare costs can’t continue to be shifted onto the backs of American workers, who have seen few wage increases in the last 20 years.

 

It’s one thing when a consumer activist or patient advocate makes a bold statement like that; it’s quite another when the words come from one of the most powerful healthcare executives in the country. In a conversation the following week, he elaborated on that point.

 

“You have the American people seeing the cost of living going up every year and seeing the cost of healthcare going up three or four times the cost of inflation,” Tyson said. “They see no real wage increases and then they get stuck with the added cost that’s been shifting to them from employers and insurers.

 

“That is not a long-term solution.”

 

What does seem to be working is the Kaiser Permanente business model, in which the organization serves as both health plan and healthcare provider, with capitation helping to fund the delivery of care and hospitals viewed as expense centers rather than revenue generators.

 

“One of the moral obligations that I believe I have as a leader in the healthcare industry is to bring a lot of transparency as to why I believe our model is the best way to go,” Tyson says. “It’s a system that doesn’t pay for volume, that isn’t motivating people to produce more of something in order to get paid. What we have been able to do for almost 70 years is align the incentives of the financing mechanism with the hearts and minds of physicians and other caregivers who continually sign up to do the right thing.”

 

Read more…