Thoughts on  George C.Halvorson, Kaiser Permanente CEO Retirement, and on MegaGroupThink and Independent Practice

Before a group can enter the open society, it must first close ranks.

Charles Vernon Hamilton (born 1929)

October 6, 2012 -  Yesterday George C. Halvorson sent me this email about his retirement, which has already been announced to the nation’s newspapers and other media outlets:

“Dear Dr. Reece,

I am sending you this note to let you know that I just told our Board of Directors that I will be retiring at the end of next year. I do love my job and Kaiser Permanente is a great place to work, but I have been here slightly longer than a decade. Things are all going well -- and I am ready both to spend time with my family and to do some post-retirement work in areas relating to intergroup issues and diversity. We are an increasingly diverse society and I want to help that diversity create synergy.

So I will retire at the end of next year. Our Board is now going through a succession process. It is a great Board and I expect them to do that work well.

This is not a farewell note -- because I will be retiring more than a year from now. It’s just a heads up. I thought you might want to hear it directly from me.

Our media people have developed a press release about my retirement. I have attached a copy of the release. It talks a bit at the end about what I hope to focus on as my next agenda.

Be well,

George”

George and I go back a long way, starting in Minnesota,where I was editor-in-chief of Minnesota Medicine from 1975 to 1990)., and George ran Group Health and then Health Partners.  

I conducted two print interviews with George. The first appeared in my 1988 book And Who Shall Care for the Sick; The Corporate Transformation of Medicine in Minnesota.  The second was in a 2005 book Voices of Health Reform:  Interviews with Health Care Stakeholders at Work.  

I have also reviewed his books:  Strong Medicine (1993), Health Care Reform Now!: Epidemic of Care: A Call for Safer, Better, and More Accountable Health (2003); A Prescription for Change  (2007), co-written with George J. Isham, MD;  Health Care Will Not Reform Itself: A User’s Guide to Refocusing and Reforming American Health Care(2009). 

Before George became one of the nation's  leading health care executive and  a high profile policy visionary. George was a journalist. His books and his addresses before national and international health reforms show the power of his writing, which is clear, persuasive, and to the point.

George’s views are well-known. 

He advocates health plans, doctors, and hospitals working together to bring out systematic change to reform the nation’s health, rationalize the system,  improve outcomes, and lower costs.  

To accomplish these goals, George believes;

• We must make online  information instantly available at the doctor’s offices, at the bedside,  at policy levels, and to health consumers. 

• We must invest heavily in electronic health records, as Kaiser has done by investing $4 billion in its electronic information system. 

• We must innovate: Kaiser has established a national network for innovation.  

• We must form ready response teams to respond to the crisis of hospital-acquired infections.

• We must educate patients with diabetes and heart disease and hypertension how to prevent and minimize complications,  from these and other chronic conditions.

• We must recognize that 5 chronic diseases – diabetes, congestive health failure, coronary artery disease, asthma, and depression – create 70% of total health costs.

• And lastly, we must recognize that our delivery system is a non-system – with millions of independent, uncoordinated, separately acting independent practitioners pursuing their own priorities. We must engage in more systems thinking, rather than individualistic endeavors.

I am not in accord with George’s attitude towards independent physicians.   After all, these physicians  provide more than 80% of the physician services in the United States, and most of them have their patients’ best interests at heart and  in mind.  Furthermore,  many of them choose not to work with large organizations, like hospitals, health plans, academic centers, and large megaclinics like Kaiser Permanente.  They like their clinical freedoms, and, having run the academic and licensing gauntlet to become physicians,  they think their clinical judgments  deserve respect and trust.  

Organizations like the Physicians Foundation (physiciansfoundation.org), are advancing the work of private practices.   To date, according to the Physicians Foundation national survey released on September 24,  two-thirds of practicing physicians  do not believe Accountable Care Organizations or hospital employment will improve health care quality or are necessarily in the best interests of patients.

Still,  there is much to be said for health plans, physicians, and hospitals working together,  as Kaiser Permanente, under the leadership of George Halvorson for the last ten years, has demonstrated. 

But it is one thing to manage an organization with multiple hospitals and thousands of  salaried physicians, both of whom are obligated to march to the beat of their employer or to form a consensus on how to operate.   It is quite another thing  to manage more than 500,000 independent physicians and 5000 hospitals,each of whom may march to their own drummer.

Kaiser Permanente is a large 67 year old successful health care organization, with more than 189,000 employees including more than 17,000 salaried physician employees, 9 million covered patients,  and $50 billon in revenues. Kaiser owns 37 hospitals and has 600 medical offices.   Halvorson is among the highest paid health executives with a reported $7.7 million in annual income.  Kaiser's  massive size allowed it to collect $316 million from employees to support Obamacare, the only health care organization among the top ten Obama corporate donors.   This makes sense,  since Kaiser and Obamacare agree on the need for accountable care organizations,  universal EHR use, and data-driven systems.

Good luck, George,  in your last year of Kaiser Permanente stewardship, which will end in 2014.  Be well, and may your organization – which combines a health plan, hospitals, and physicians under one corporate roof – continue to improve the health of Kaiser clients and to be well financially.

Tweet: George Halvorsan, CEO of Kaiser Permanente,  has announced he will retire in January 2014, leaving the Kaiser Board ample  time to find a successor.