“We believe in universal access,” says Bernard J. Tyson, CEO of Kaiser Permanente, on stage at the 2019 Fast Company Innovation Festival.
Tyson has said that he does not think that “Medicare for All” is the right choice for right now in the United States. The reason, he says, is because the policy is focused on getting all Americans affordable insurance coverage rather than ensuring that everyone is getting affordable care, which he does not believe is the same thing. Though approximately 30 million Americans are not insured, according to 2018 census bureau figures, the overwhelming majority are.
“We should be focused on the care, not the coverage, and we should deal with the policy deficiencies where we’re not covering,” he says. Kaiser Permanente is both an insurer and a network of medical centers. It takes a fixed fee in exchange for providing a patient’s entire care, rather than a fee for a specific service. The organization focuses on a patient’s long-term health, a model that has allowed it to save money on health costs.
Kaiser Permanente has come to involve services outside hospital walls. In January, the organization made its first investment in a housing project with the aim of providing shelter to 500 homeless people over the age of 50, who suffer from chronic health conditions. The funding came from its $200 million impact investment fund. The organization also recently launched a program in California called Food for Life, which will connect qualifying members of its community with the state’s supplemental nutritional assistance program. In addition, those in the program will get meals based on their medical conditions, delivered to their home. Kaiser Permanente sees both housing and food security as key to maintaining a person’s overall health. Tyson says he’s also thinking about how to reduce social isolation, which impacts well-being.
Though Kaiser Permanente is unique in its structure, it is still an insurer. Presidential candidates Elizabeth Warren and Bernie Sanders are pushing policies that would eradicate private insurance in favor of a public option. Both plans promise generous service coverage at a low cost. Tyson acknowledged earlier this week that the plan would make Kaiser Permanente’s insurance business obsolete and force the company to significantly change its model, which relies on deep insight into its health operations to determine premiums.
Both Warren and Sanders say that through having a single payer, as opposed to many, the government will be able to negotiate lower prices with drug companies and medical providers, ultimately saving Americans money. In 2017, they spent $365 billion out of pocket on medical expenses, according to the Center for Medicaid and Medicare Services. Tyson says his concern is that Medicare for All may not actually reduce costs the way politicians believe it will.
“Who’s going to cut costs to match the new prices? That has not been answered yet. I don’t think the unions are going to say just cut the employees wages 25%-30%. I don’t think the doctors are going to say oh yeah I’ll start working for 25%-30% less, because that’s what you’re cutting,” he says. In order to bring the cost of care down, he says politicians need to figure out what is reasonable for a person to pay out of pocket for value-based care and perhaps set a cap on fees based on income if necessary.
Furthermore, he says the government’s failure to make necessary changes to the Affordable Care Act to ensure the millions without insurance are covered today says a lot about its ability to operate as an insurer tomorrow. Politicians are often more concerned with which party created the law than whether or not it’s effective, he says. Similarly, he thinks that conversation on shifting the American healthcare system away from commercial insurance may distract from the work of bringing down medical costs.
“We’ll spend the next 10 or 12 years working on that narrative, and not on the affordability.”