University of California San Francisco
CHC Home About the Center Research Education News Events Administration
Exchange Archives

January 17, 2002

California 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 study.

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


Copyright 2014 The Regents of the University of California