Frank Diamond
Senior Editor
MANAGED CARE June 2002. ©MediMedia USA

Senior Editor

When it selected the person who would become only the fourth CEO in Kaiser Permanente's history, it may have seemed that the health plan reached beyond its own culture.

George C. Halvorson, after all, is not a homegrown Kaiser product and, unlike David M. Lawrence, MD, the man he replaces, he is not a physician. Nevertheless, anyone who thinks that this means Kaiser Permanente — with 8.3-million members, $20 billion in revenue, and 100,000 employees — is moving in a radical new direction should think again.

"He's so much like him," Uwe Reinhardt, PhD, a health care economist at Princeton University, says in comparing Halvorson to Lawrence. Halvorson, who began at Kaiser on May 1, comes from HealthPartners, a not-for-profit, 660,000-member HMO in Minnesota.

"He comes essentially from the not-for-profit Minnesota world," Reinhardt continues, "and every Minnesotan is actually a public citizen. That's their nature. Minnesota people have a much larger view than 'me and my stock options.' I think he is a perfect guy. He's certainly not Kaiser culture — and that could be some problem — but I think he brings this strange mixture of entrepreneurial culture, which certainly Minnesota has, and its not-for-profit [nature]. There was always a public-citizen thing to it."

Lawrence could be described as academic; Halvorson is a bit more informal. He is, in the words of consultant Peter Kongstvedt, MD, "much more of a shirt-sleeves kind of guy."

As with Lawrence, Halvorson speaks frankly. For instance, when once discussing defined contribution, Halvorson pointed out why handing over the purse strings to consumers can't motivate all of them to shop for price: "Anyone who has just been diagnosed with cancer is in no position to go out for bids."

Halvorson, chairman of the board of the American Association of Health Plans from June 1994 until June 1996, has been described as a vigorous proponent of managed competition.

As with Lawrence, he is also a big advocate of information technology. In early May, he told the Minneapolis Star Tribune that HealthPartners is about five years ahead of Kaiser in implementing information systems, including an electronic medical record.

Considering Lawrence's difficulties on this score, moving every Kaiser physician onto electronic medical records could be quite a chore. The reward, however, seems to be worth it.

The Star Tribune also reports that Halvorson made $814,000 a year at HealthPartners; his Kaiser salary has not been disclosed. Lawrence made $2.2 million in 2000.

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