INTERVIEW: Health care CEO George Halvorson on care delivery models

As we prepare for the 2018 Lown Conference in April, we want to help you get ready as well. So we’re putting out interviews with some of our keynote speakers so you learn more about what to expect at the conference, and start getting excited!

We spoke with George Halvorson, Chair and CEO of the Institute for InterGroup Understanding, who will be giving a keynote address at the Lown Conference. Halvorson served for more than 30 years as CEO of six different health care delivery and financing organizations in the U.S. Most recently Halvorson served as Kaiser Permanente Chairman and CEO from 2002 – 2014.

The Institute for InterGroup Understanding works on issues of racism, prejudice, discrimination, misogyny, and InterGroup stress and conflict. Halvorson has written four books on those topics, which are all available as teaching materials from the Institute. His most recent health care book, Don’t Let Health Care Bankrupt America, explains how to use market forces and extensive care support tools to make health care significantly better and more affordable.

Lown Institute: If you could create a perfect health care delivery system, what would it look like?

George Halvorson: First we need universal coverage, then we need to optimize patient care delivery by providing care in teams and aligning financial incentives. Having doctors on salary [rather than paying fee-for-service] is optimal; you want doctors to never, ever make a treatment decision based on their own revenue.

At the same time, capitation can be tricky – If I’m only getting a certain payment per patient, will I do this expensive knee operation? That’s why giving the financial risk to care teams, instead of individual doctors, is so important.

Lown: Where does cost come into the equation?

Halvorson: We should be able to negotiate fee schedules for tests and procedures the way other countries do. If we used the same fee schedule as Canada, we could go from using 17% to 12% of our GDP on health care without changing anything else.

We tried to do something like that at Kaiser Permanente, use a different fee schedule that was actually based on how much the procedures were worth. But it wasn’t accepted because it looked nothing like any other fee schedule. Our proposed fee for a CT scan was $100, at most other hospitals it’s $2000. We realized that these fees are invented, they’re arbitrary.

The whole price thing is fascinating, because the prices have no relationship to value or cost. Usually hospitals just charge whatever they can get away with.

Lown: How did your time at Kaiser Permanente inform how you approach issues of inequality at the Institute for InterGroup Understanding?

Halvorson: At a lot of hospitals, they put racial and ethnic disparities on the agenda, and then go directly to wishful thinking, saying, “I wish we did this better, we should do that better…” At Kaiser, we actually tracked the data to find out where the disparities were, and created interventions to fix them. If you decide to gather the data and use it for continuous improvement, you can make a real difference.

Lown: Any other tips for quality improvement you learned at Kaiser?

Halvorson: Don’t underestimate the power of friendly competition. At Kaiser we were measuring outcomes for different types of cancers and finding wide variation in survival rates. So we had the oncologists all meet with each other and had them lead the discussion. Rather than get defensive, they started bonding and learning about what everyone else was doing. This led them to share best practices with each other and work to rise to the level of the best care.