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health systems have played the dual role of both provider and payor,291 but now that role is likely to be played by the new consolidated health systems.292 The largest managed care organization in the United States, Kaiser Permanente, has been operating as a health plan and a provider since 1945.293 Kaiser is made up of three separate, yet cooperative, entities including: Kaiser Foundation Health Plan, Kaiser Foundation Hospitals, and Permanente Medical Groups.294 Kaiser has effectively produced a structure that successfully aligns the goals of the health plan and medical group, implementing total accountability for a global budget.295 Kaiser’s health plan and healthcare providers “share in the goal, reflected in the organization’s capitated payment system, of keeping patients healthy while optimizing utilization.”296 Rather than focusing on producing a high-volume of services, a goal inherent in a fee-for-service reimbursement model, Kaiser is financially incentivized to “provide high quality, affordable care and manage population health,” as a result of its integrated and managed care structure.297 Kaiser is simultaneously a provider and payor, and this dual role allows Kaiser to align incentives leading to an improvement of the community’s overall health.298 The coordination of the three Kaiser entities provides a “common vision, joint decision-making, and aligned incentives.”299 The success of Kaiser’s high-quality integrated health care and health plans is further evidence of what can result from providers offering health plans. According to a National Committee for Quality Assurance report, Kaiser’s health plans have achieved top national scores in consumer experience, disease prevention, and overall
291. Herman, The Risks, supra note 257. 292. The trend of provider-owned health plans is increasing, but “[p]rovider-owned plans cover less than 10% of the entire privately insured market.” Herman, More Health Systems, supra note 258. 293. Word’s Out: Kaiser Permanente Health Plans Among Nation’s Best, PR NEWSWIRE (Sept. 17, 2015), http://www.prnewswire.com/news-releases/words-out-kaiser-permanente- health-plans-among-nations-best-300145297.html [hereinafter Word’s Out]. 294. Douglas McCarthy et al., Kaiser Permanente: Bridging the Quality Divide with Integrated Practice, Group Accountability, and Health Information Technology, 17 COMMONWEALTH FUND 1, 2 (June 2009), http://www.commonwealthfund.org/~/media/ Files/Publications/Case%20Study/2009/Jun/1278_McCarthy_Kaiser_case_study_624_updat e.pdf. 295. Jesse Pines et al., Kaiser Permanente – California: A Model for Integrated Care for the Ill and Injured, BROOKINGS INST. (May 4, 2015), http://www.brookings.edu/~/media/ Research/Files/Papers/2015/05/04-emergency- medicine/050415EmerMedCaseStudyKaiser.pdf?la=en. 296. Id. 297. Id. 298. What Health Systems Can Learn from Kaiser Permanente: An Interview with Hal Wolf, HEALTH INT’L 18, 20 (Nov. 8, 2009). 299. McCarthy et al., supra note 294.