In 2007, Kaiser Permanente member Russell Rector was diagnosed with cancer. The company where he worked as a sales manager let him go after his disability benefits ran out, leaving him and his two children without health care coverage. Kaiser Permanente stepped in and provided coverage at minimal cost to the family through two Community Benefit programs.

"Without Kaiser, I wouldn't have health care," he says. "I wouldn't even be here to talk about it."

Member Paul Olson fell ill with a spinal infection in 2006, and lost his job as well. With his wife's Social Security disability benefits the only family income, they couldn't afford individual coverage. The Olsons, too, were offered subsidized KP care through a program that reduces premiums and co-pays to affordable levels for low-income families.

Losing insurance, as Rector and Olson and tens of thousands of others know all too well, is one consequence of the state of health care in America today. For the fortunate, the assistance like that available through KP's charitable coverage programs—which extended subsidized care to almost 90,000 people last year, part of the $1 billion KP invested in our communities—offer help. But there are hundreds of thousands of others across the country for whom there is no safety net.

Rising health care costs and the national economic landscape takes its toll in other ways, too. Even though a major independent analysis ranked our financial efficiency tops in six regions, including both California regions—and even though KP's rate trends are below the national average—some customers face double-digit increases in their premiums, including one Northern California union local that has offered KP to its 850 members for more than 30 years. "It's a real problem," said the local's business manager. "A lot of our members use Kaiser and would be very unhappy to have to go elsewhere. But there's no way we can afford that." (Negotiations were ongoing as Hank went to press.)

These are big problems—for the families and communities we serve, and for Kaiser Permanente itself.

A model and a target

Today, the U.S. health care system is at a crossroads, and Kaiser Permanente is both a model for our nation and a target for our competitors. It's important to understand the larger forces at work in health care and in the country, so we can respond to the challenges.

Those larger forces include not only spiraling health care costs but also increasing financial pressure on middle-class families and cut-throat competition among health care insurers and providers. The responses to these challenges come from many levels of the organization—from KP and union leaders working on health care policy to planners developing new products to attract and retain members.

The response also must come from the frontline employees, managers, physicians and other providers who do the work of serving members and building our capacity for care.

KP was 'founded to be an answer for working families when it comes to affordable health insurance, and keeping those families healthy.'

Maria Fenwick, unit-based team trainer

The people working at the frontline can influence the broader market trends with one simple, straightforward step: Put our patients and members first. Give every patient and member we encounter every day—and our colleagues who serve them—our full attention, compassion, care and respect.

"We have good service scores in some places, but not everywhere—and that just has to change," Sal Rosselli, the president of SEIU United Healthcare Workers-West, told a gathering of Union Coalition delegates this spring. "We are the ones who can do it. In this brutal market, poor service can sink our goals."

Most of the time, most employees and providers at KP already are "patient-centric." The key is to elevate patient-centered care from being a matter of individual effort and make it the basis for team decision making and performance improvement.

An example from Northern California shows what it can look like in action. A behavioral health services team of frontline staff, managers and physicians decided to improve patient access.

The Oakland Medical Center Adult Psychiatry team had worked long and hard to ensure that 90 percent of new patients were seen within two weeks. They tried different methods to ease the backlog, but the problem kept creeping back. Each time it did, staff morale dropped and frustration grew.

At a staff meeting last year, Robert Fusco MD, the Psychiatry department chief, asked the team to work together to find a solution. The staff studied the data and, for the first time, understood how access affected their department, their co-workers and ultimately, the patient. They proposed solutions to work through the backlog by using time normally scheduled for staff meetings for patient intake instead. September was spent clearing up the backlog. By October, patient access had improved dramatically and in November, for the first time in more than four years, the department met its access goal for seeing 90 percent of new patients.

"Improving access boiled down to team effort, improved staffing and good leadership. Partnership, in short," said psychologist Ana Klatt Mogro.

The upward trend continues in 2008. Access to Oakland's Psychiatry Department has climbed past the 90 percent mark to 97 percent this year.

Will putting the patient at the center of decision making solve all that is wrong with U.S. health care? Of course not. But because our integrated not-for-profit system offers keys to reform, we must focus on performance improvement, now more than ever.

"KP must be the model for health care reform—no one can provide better care, for more working people, at a more affordable price. But we have to make the model work at its absolute best," Rosselli said. "If we just keep doing what we've always done, we're looking at a period of stagnation and decline."

Unique from the beginning

The largest nonprofit health care system in the country, Kaiser Permanente always has offered a different approach. For starters, we have a strong social mission: To provide quality, preventive care that's affordable.

"Kaiser Permanente is great because when we were first founded, we were founded not to make profits," said Maria Fenwick, a unit-based team trainer in Colorado. "We were founded to be an answer for working families when it comes to affordable health insurance, and keeping those families healthy."

As a progressive employer with strong unions, Kaiser Permanente also has set the standard for salary and benefits in the health care industry. But over the past 30 years, many of the people we serve have not fared as well as we ourselves have. In fact, the middle-class families that represent most Kaiser Permanente members have seen average weekly wages, adjusted for inflation, decline slightly since 1973.

And while workers' wages have remained flat, the cost of health care has not. In fact, the average cost of family health coverage has doubled just since 1999.

That has put basic health coverage out of reach for millions of families. In California, for instance, the average cost of necessities for a family of four is $45,000 a year. But one-third of California families don't make $45,000 a year. The average HMO premium for a family is $11,600 a year—more than 25 percent of that $45,000 cost of necessities. The trends across all Kaiser Permanente regions are similar.

With health coverage less available and less affordable, an estimated 100 million Americans either are uninsured or underinsured. Only 56 percent of workers in this country have employer-paid health coverage today—down from 70 percent 30 years ago.

"We need to be even more focused on affordability than we have been, because more and more, people are asking individual patients to help pay the bill," said Louise Liang MD, senior vice president, Quality and Clinical Systems Support. "Everyone should have comprehensive health care, and that's becoming less possible (in the U.S.)."

They want to eat our lunch

We also face new challenges brought on by our competition. In the face of the same economic realities that KP faces, our competitors have one sure way to grow: take our members.

Not long ago, Kaiser Permanente competed with hundreds of small health plans in local or regional markets. We were able to more than hold our own. Today, however, a few large for-profit insurance companies dominate the national market: WellPoint, United HealthCare, Cigna and Aetna. They have deep pockets that allow aggressive pricing and marketing. They offer a range of products that allows them to position themselves as a "total replacement" package—a package that requires an employer not to offer any other plan, particularly Kaiser Permanente.

KP is responding to these market pressures with more flexible, competitive products. But our traditional plans—which usually were more comprehensive and significantly less expensive than competitors' offerings—have lost some of their appeal in the marketplace.

These challenges have slowed our membership growth. And growing our membership is important.

The key is to elevate patient-centered care from being a matter of individual effort and make it the basis for team decision making and performance improvement.

"Kaiser Permanente has high fixed costs. Aetna and Blue Cross don't operate hospitals, they don't buy diagnostic equipment, and they don't pay health care workers," Rosselli told the Union Coalition delegates. "If we don't bring in new members every year, while the cost of workers and building and equipment goes up—well, do the math!"

And while we may measure our business in many ways, "the ultimate sign of acceptance is our membership growth," says Bernard Tyson, executive vice president of Health Plan operations.

"We need to grow to be credible," George Halvorson, the chief executive officer of Kaiser Foundation Health Plan and Hospitals, said at the union delegates' conference. "Even if you're doing really, really well, if no one is buying your coverage, you have a credibility problem."

Growing allows us to:

• Invest in maintaining, expanding and upgrading our facilities and our systems to better serve members and patients;
• Provide competitive wages and working conditions;
• Maintain our market share to grow with the general population;
• Maintain the right mix of members—young and old, healthy and sick—that lets us manage risk appropriately; and
• Carry out our mission.

Right now, we're not growing as fast as we need to to remain competitive.

KP must be the model for health care reform—no one can provide better care, for more working people, at a more affordable price. But…if we just keep doing what we've always done, we're looking at a period of stagnation and decline.

Sal Rosselli, president, SEIU UHW-West

Here again, putting our patients and members first is the beginning of the solution. The collective impact of some 100,000 member visits a day is phenomenal. Each visit creates several points of contact between the member and a KP worker—and each encounter is an important opportunity to deliver care and service quality.

"Bad news" stories travel further and faster than good news—and it takes a long time and a lot of hard work to overcome the negative impact of a single bad customer experience.

"Members &talk about their experience, especially a bad experience, with family, friends and the community. We as frontline staff hold the future of KP in our hands," said Shernida Wheeler, a surgery scheduler in Atlanta. "People at KP need to do their best with every member they encounter."

Medical assistant Stella Manriquez, who works at the Lancaster pain clinic in Southern California, has discovered just how much her actions can affect patients.

One particular patient, Manriquez remembered, came into the clinic in a wheelchair, in excruciating pain.

"My first encounter with her, she says, 'Don't weigh me. I'm here for pain medication. That's all.' She was really negative."

Manriquez was tempted to react in kind but resisted the urge.

A month later, Manriquez noticed a slight smile on the woman's face during one appointment. By the sixth week, the woman was apologizing to everyone for her behavior. And several months into her treatment, the woman walked into the center using a cane and accompanied by another woman—her daughter.

"The daughter came in to thank us," Manriquez recalled. "She said, 'Thank you for not pushing her away &.Thank you for giving me my mom back.' "

Manriquez continued, "The extra touch, trying to be compassionate—sometimes if you just give them a hug and say, 'I understand where you're coming from,' that's all people need. And a little patience. It's as simple as that, and it works. I've been working at Kaiser for 26 years, and it's taken me that long to understand that."