Executive Rewind: Kaiser Permanente’s CEO on Healthcare Consolidation

In this era of consolidation, healthcare executives need to be prepared for the overriding question of why bigger is better. The primary driving forces may be competition and costs of doing business, but what about the customer/patient?

Kaiser Permanente is the largest managed care organization in the United States. And it’s growing.

For CEO Bernard Tyson, that means accountability on a number of levels:

Tyson’s focus is on his most important audiences: current and prospective customers, his system’s doctors, all the other employees delivering healthcare under the KP banner, and even his competitors since the industry assumedly would want all its members on the same song sheet.

To member clients, his most urgent message is take personal responsibility for achieving and maintaining good health:

That raises another question. If the micro path to good health lies mainly on the individual, how does that square with the macro response of consolidation? Or, put another way:

The question of good mergers vs. bad mergers created a potential trap that the CEO instinctively avoided, criticizing competitors. He took the higher road staying on message and answering strictly from the perspective of Kaiser Permanente.

Tyson repeatedly sites improved technology in his business model. But more and better technology often can translate into higher costs:

Bottom line: Bernard Tyson is worth studying. He’s very good. He’s open, accessible, and friendly; positives that come through in his body language (good eye contact, fully engaged) as well as his reasoned responses. He had a definite messaging plan, first having a clear understanding of target audiences, and two primary messages: patients have a responsibility for using preventive ways of maintaining good health; and, consolidation has been good for Kaiser Permanente and its ability to manage costs more effectively.

Here’s some background from Wikipedia: Kaiser Permanente is made up of three distinct but interdependent groups of entities: the Kaiser Foundation Health Plan, Inc. (KFHP) and its regional operating subsidiaries; Kaiser Foundation Hospitals; and the regional Permanente Medical Groups. As of 2017, Kaiser Permanente operates in eight states (Hawaii, Washington, Oregon, California, Colorado, Maryland, Virginia, Georgia) and the District of Columbia, and is the largest managed care organization in the United States.