Innovation in health care: 3 lessons from Kaiser Permanente

At the end of my interview with Chip Heath, co-author of the New York Times bestsellers “Made to Stick” and “Decisive,” I asked him what topic he’d like me to cover in the future.

“I’m impressed by the culture you’ve created at Kaiser Permanente in Northern California,” he said. “You’ve generated quarter-to-quarter change that I think would have taken three years elsewhere. I don’t think most organizations know how to do that. That’s the article I’d like to read.”

I’ve been the CEO of The Permanente Medical Group for the past 15 years. Our medical group’s 8,000 physicians and 34,000 staff care for over 3.5 million Kaiser Permanente members.

I’ve never wanted my blogs to focus on Kaiser Permanente. I’ve tried to highlight the broader set of issues facing the culture and business of health care.

But over the past year, readers and leaders from around the country have echoed Chip’s request.

I hope the lessons I’ve learned will help leaders who want to accelerate change within their organizations, in health care or elsewhere.

What successful change looks like

Let me explain why Chip made his request.

Twenty years ago, the quality of care we delivered at Kaiser Permanente in Northern California was good but didn’t rank among the nation’s top 1 percent.

Today, we rank in the country’s top 10 programs for quality as determined by the National Committee for Quality Assurance (NCQA) for both commercial and Medicare members. We’re one of just 11 programs in the nation to earn a five-star quality rating from the Centers for Medicare & Medicaid Services (CMS) each year since the ratings launched. And our patients rate our service as the best in California, according to J.D. Power and Associates.

External accolades like these do matter.

But here’s what is more important: Kaiser Permanente members in Northern California are 30 percent less likely to die of a heart attack or stroke than patients cared for elsewhere in the state. Our patients are 40 percent less likely to die from sepsis and 50 percent less likely to die from HIV or AIDS than other patients across the United States.

These results didn’t happen by chance.

They’re a product of our organizational approach and culture. Although being part of a fully integrated medical group has its unique advantages, we’ve noticed that three distinct approaches have helped Kaiser Permanente fast-track improvements in a traditionally sluggish industry. And if they drive success in health care, they should be equally applicable to a broad set of businesses and professionals who strive for positive change.

Tip 1: Start with the heart

Medical practice attracts the best and brightest students, many of whom are left-brained thinkers with great analytic skills, advanced problem solving abilities and high IQs.

But lots of organizations hire smart people. Intelligence alone doesn’t spark purposeful change.

Instead, we’ve found improvement comes faster and easier when leaders appeal to a greater sense of purpose within an organization, speaking not only to the head but — more importantly — to the heart.

Doctors are mission-driven people. First and foremost, they want to help patients.

But health care is not the only mission-driven industry. The business world is rife with organizations that want to add value, not just generate a profit. Retailers strive to help customers live better lives. Insurers aim to protect families from fire, accidents or disease. Media companies seek to inform and entertain the populace.

Yet too many administrators approach change by focusing solely on the external threats of their competitors or by dangling financial incentives in front of employees.

Threats and financial incentives change the way people act. But more often than not, they don’t achieve the organizational outcomes that leaders intended.

At Kaiser Permanente, we care about numbers but only in the context of helping the people we serve. We measure clinical outcomes and patient satisfaction scores as part of a larger effort to improve the well-being of our patients. We also avoid creating the types of personal financial incentives that are typical in a fee-for-service payment model (where care providers are rewarded for quantity over quality). And because our physicians don’t work for an insurance company, they don’t need to obtain authorization for testing, referrals or hospital admission.

This freedom — to practice without the financial incentives or insurance obstacles that can compromise clinical decision making — has allowed Kaiser Permanente to be a place where the best physicians want to practice. As a result, we currently receive 12 highly qualified applicants for every physician opening in our medical group.

In his book “Switch,” Chip Heath describes the importance of focusing on the destination, not the metrics. And he emphasizes the power of connecting with people’s emotions. Our experiences and success at Kaiser Permanente echo his approach.

The lesson: Improvements happen much faster when leaders appeal to the heart over the head or the pocketbook.

Tip 2: Innovate locally, share successes broadly  

Many organizations make one of two mistakes: Either they only drive change from the top or they encourage local innovation but fail to spread the best solutions far and wide.

In my experience, the best solutions tend to stem from a series of small improvements (created locally) that are then scaled up to yield system-wide benefits. And when organizational leaders formalize this solution-hunting approach and embrace local innovation, positive change happens very quickly.

At Kaiser Permanente, we routinely cast a wide net, looking for local initiatives that have the greatest potential to improve care. And when we find them, we teach everyone what we’ve learned. By travelling to each hospital and talking to thousands of physicians each year, we can discover and select the initiatives that will have the best impact on patients.

And in the fall of each year, we bring dozens of physicians together to establish quality and service goals for the upcoming year based on what we’ve learned. They then translate those goals into specific, measurable steps that every physician and staff member understands and can accomplish. This “bottom’s up” and “top down” approach allows us to identify hundreds of ideas and implement the best ones everywhere.

In Chip and Dan Heath’s newest book “Decisive,” he recounts how one Kaiser Permanente physician sparked organizational change that helped save thousands of lives.

Dr. Diane Craig and her colleagues in Santa Clara had spent several years working on a medical condition called sepsis, a bloodstream infection that kills 210,000 Americans each year.

She realized that reducing the death rate required physicians to order specific tests and begin aggressive treatment very early on. At the time, this approach was considered risky by some clinicians.

But her solutions proved successful. Sepsis deaths declined in her medical center. By summer 2012, all 21 Kaiser Permanente hospitals in Northern California had adopted sepsis protocols and drove sepsis mortality rates 28 percent below the national average.

Driving change in most businesses usually isn’t a matter of life or death. But regardless of the industry, finding innovative solutions and spreading best practices will lead to organizational improvements.

At Kaiser Permanente, this approach has allowed us to increase brand perception and grow our market share from 34 percent to 46 percent over the past decade.

The lesson: Innovate locally, but educate broadly. Quickly disseminate information, best-practices and guidelines throughout the entire organization.

Tip 3: Invest in technology now or pay later

No organization today can ignore the importance of technology.

But when it comes to investing in it, many businesses are quick to tighten the purse strings in the face of downward economic pressures. Big mistake.

From large-scale food makers to cutting-edge communication companies, organizations rely on the latest technology to climb to the top of their industry. Likewise, health care providers can’t expect to deliver the best quality or service without using 21st century information technology (IT) systems.

In the health care world, electronic medical records (EMRs) enable doctors to improve the overall quality of patient care. These records are available 24/7 and contain comprehensive patient information. This allows doctors to make faster and smarter clinical decisions.

In today’s age, you’d expect every doctor and hospital to quickly jump on board, particularly when the Centers for Medicare & Medicaid Services (CMS) offers financial incentives up to $44,000 for doctors who install and use an EMR system. In fact, given the rapid advances in information technology, there has never been a better time in our industry to upgrade.

But adoption and use of health IT still isn’t standard practice.

A recent HHS release shows that just over half of all physician offices in America have implemented a health IT system or used one for anything other than billing. And even among physicians with EMR systems, data-sharing is limited.

At Kaiser Permanente, we implemented a comprehensive EMR system almost a decade ago. We also recognize that an EMR is just the first step toward using technology for superior patient care.

We now provide patients with internet and mobile tools like the KP Preventive Care application, so they can communicate conveniently and securely with our physicians. We maintain large, secure disease registries so that patients with specific medical problems can avoid falling through the cracks.

We also allow our patients to make appointments online, check their laboratory and radiology results and send a secure e-mail to any physician they have seen. In addition, they can reorder prescription refills online and have them delivered to their home at no cost.

We hope doctors and medical centers everywhere will adopt these same technologies for the convenience and benefit of their patients. But no matter what the organization, the risk of slow-playing technology can be fatal.

The lesson: Information technology is a powerful source for learning and improving. If you’re not leading the way, you’re falling behind.

Positive change never happens by chance

Even under the best of circumstances, change never comes easy.

In my role as CEO, I’ve learned that the case for change needs to resonate not just with the brain but with the heart.

I’ve learned the best innovations start locally, but need to be implemented broadly for them to have the greatest impact.

And I’ve found that technology facilitates positive change, more so now than at any time in our history.

These three lessons have proven invaluable for me and for Kaiser Permanente over the past 15 years. I hope they prove helpful for others who are committed to achieving the best results for their organizations.

Robert Pearl is a physician and CEO, The Permanente Medical Group. This article originally appeared on

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