|January 17, 2002
Kaiser Permanente Patients "Getting More for Their Money" Than UK's National
Health System Patients
Patients of Kaiser Permanente (KP) are getting better
health care than National
Health System (NHS) patients in Britain, for roughly the same cost, according
to UCSF researchers.
The study, which compared the costs and performance of the NHS with those of
Kaiser Permanente's California region, appears in the January 19, 2002 issue of
the British Medical Journal (BMJ).
After adjusting for age and socio-economic differences between the two populations, the
researchers found that health care costs per capita in Kaiser and the NHS were similar
(within 10%) and that Kaiser's performance was significantly better in important areas.
KP patients experience more comprehensive and convenient primary care services and much
more rapid access to specialist services and hospitals. In addition, they spend one third
of the time in hospital than NHS patient do, said Richard Feachem, UCSF professor of
International Health, director of the UCSF Institute for Global Health, and lead author of
The researchers chose to compare Kaiser Permanente (a not-for-profit health
organization based in California) and NHS because they provide a similar range of services
to a population with similar age and socioeconomic profile. KP is roughly the same age as
the NHS and has had the same amount of time (about 60 years) to evolve and adapt to new
circumstances. This study compared KP's California region with the NHS because this region
represents the model most similar to NHS.
The researchers noted that KP achieves better performance at roughly the same cost
because it has:
- Better integration of care throughout the system
- Efficient management of hospital utilization
- The benefits of competition
- Greater investment in information technology
"These findings are provocative because they challenge two long-cherished beliefs:
first, that the NHS is efficient, and second, that the problems of the NHS can be fixed by
more investment, rather than by restructuring the way in which the system is organized and
managed," said Feachem.
KP has achieved real integration through partnerships between physicians and
administration and can exercise control and accountability across all components of the
health care system, according to the researchers. This allows Kaiser to manage patients in
the most appropriate setting, implement disease management programs for chronic conditions
(KP patients are far more likely than NHS patients to receive appropriate treatment and
intervention for diabetes and heart disease), and make trade-offs in expenditures based on
appropriateness and cost-effectiveness.
Because KP spends less on hospital bed days (the most expensive component of a health
system), it can provide more and better paid specialists and perform more medical
interventions with much shorter waiting times than NHS, said the researchers. Remarkably,
KP members spend one third as much time in a hospital as do the clients of NHS.
"Limiting the number of days that patients spend in the hospital permits large
sums of capital to be freed up to fund improved information technology, comprehensive and
convenient primary care facilities, ambulatory surgery centers and other facilities,"
said Feachem. He explained that scarce clinical resources (physicians, nurses) can be used
more effectively for prevention, chronic disease management, home care services and
support services to keep people healthy and functioning independently.
"KP focuses a great deal of attention and resources on monitoring admissions,
reducing lengths of stay, creating disease management programs for chronic conditions and
opening doctors offices in the evenings and weekends to reduce the use of emergency rooms
for non-emergency care," he said. As compared to NHS (per 100,000 members), KP
provides access to almost twice the number of oncologists, two and one-half times the
number of pediatricians, twice the number of obstetricians, and more than three times the
number of cardiologists.
Competition plays a key role in KP's effectiveness. Members are offered a choice of
health plans and can move each year if they choose without penalty. Therefore, KP is
motivated to sustain and improve member satisfaction and loyalty.
More sophisticated technology also contributes to KP's success, according to the
investigators. Sophisticated and efficient IT systems reduce administrative time -
particularly clinician time spent taking medical history, dictating letters, and locating
patients' records. KP will invest $2 billion over the next five years (2% of total budget)
to extend this virtually paperless patient care system to 423 outpatient centers, and over
11,000 clinicians. The NHS will spend roughly 0.5% of its budget over the next few years
on information technology (IT) development, and hopes to have all general practitioners
and specialists connected to NHS Net by 2005.
The comparison of NHS and KP focused on cost and performance. Cost was measured by
determining the total operating costs of each system and adjusting for four factors: the
package of benefits offered, special circumstances not common to both systems, the
relative costs of the medical environment in which the two systems operate, and the age
and socio-economic characteristics of the populations served. Performance was measured by
comparing inputs, access to services, responsiveness, and limited quality indicators.
These findings come at a time when NHS performance is the hottest political issue in
the UK, according to Feachem. "Daily headlines attack long waiting times and carry
tales of poor quality of care. According to opinion poles, the NHS is the number one
concern of the British public and poor performance is becoming an increasing embarrassment
for the Tony Blair government."
In the same issue of the BMJ, Don Berwick, president and chief executive officer of the
Institute for Healthcare Improvement in Boston, comments that the findings of Feachem and
his colleagues are "blockbusters" for the current NHS policy debate.
Additional investigators included Neelam K. Sekhri, MHA, CEO, the Healthcare Redesign
Group, Inc. in Alameda California; and Karen L. White, MBA, MPA, program development
officer, the UCSF Institute for Global Health. All authors have been affiliated at one
time, in some manner, with at least one of the institutions compared in the study. Feachem
received services through NHS from 1948 to 1995. Sekhri was an employee of Kaiser
Permanente from 1981 to 1994. White was a Kaiser Permanente member during 1998-99.
Source: Maureen McInaney