Challenging the status quo in medicine and education, healthcare giant Kaiser Permanente said it plans to establish a medical school in Southern California.
The nonprofit health system said Thursday it hasn’t selected a site yet for the Kaiser Permanente School of Medicine. Classes will begin in 2019.
The move is unorthodox and further illustrates the lofty ambitions of Kaiser Chief Executive Bernard Tyson. He strongly believes that Kaiser’s technology-driven, evidence-based model of coordinated care is the answer for what ails the U.S medical system, and he said teaching that approach to young doctors could accelerate change across the country.
Kaiser will face tough competition from more established and better known medical schools in the pursuit of top students and faculty nationwide. The Oakland-based company didn’t provide details on what it expects to spend in creating the school.
“We have the opportunity to help train future physicians on 21st century medicine and be on the cutting edge of all the changes we are experiencing,” Tyson said in an interview. “Our model of care is best for the current and future diverse populations in this country.”
Kaiser runs hospitals and an HMO in eight states and the District of Columbia. Nearly 80% of its 10.2 million members are in California.
It just announced this month that it was spending $1.8 billion in a deal to acquire Group Health Cooperative, a nonprofit insurer in Washington state.
Overall, the company’s annual revenue was $56.4 billion last year, and operating income hit $2.2 billion.
Kaiser is different from most health insurers in that it runs 38 hospitals across the country, owns hundreds of clinics and has nearly 18,000 doctors on salary at its affiliated medical groups. It collects an upfront premium from customers to cover all of their care and has an incentive to keep patients healthy as opposed to the conventional fee-for-service model that can trigger wasteful spending.
Kaiser said medical education, long centered on care being given inside hospitals and physician offices, hasn’t evolved fast enough to meet consumers’ reliance on mobile technology to manage their busy lives.
Kaiser has been a leader nationally at adopting electronic medical records and offering doctor visits online.
Dr. Edward Ellison, executive medical director of the Southern California Permanente Medical Group, said Kaiser received strong encouragement in a meeting it held about six weeks ago with leaders in medical education. He downplayed the notion that Kaiser’s move is a knock against existing medical schools.
“We are all in it together on how to prepare physicians for the future,” Ellison said. “Many medical schools are evolving in different ways at different rates.”
Diversity was another motivating factor behind Kaiser’s decision. The company wants to recruit more minority students and teach all doctors how to care for an increasingly diverse patient population in California and nationwide.
Tuition will be competitive with other medical schools, according to Kaiser, and financial aid will be provided to help “disadvantaged students.”
Many details about the school haven’t been finalized, such as its location and what facilities will be built at the new campus. The first class of about 50 students should start in the fall of 2019, and enrollment will grow after that, Kaiser said.
In the coming months, Kaiser said, it would establish the medical school’s legal entity and organizational structure as well as begin the process for accreditation. Another priority for next year is to hire the school’s dean.
Tyson said he was scouting for locations across Southern California and declined to be more specific. The company is considering factors such as the proximity to Kaiser facilities and other teaching hospitals and access to public transportation.
UC Riverside opened its new medical school to students in 2013. It became the sixth medical school in the UC system and first new one in more than 40 years.
Some health-policy experts were surprised by Kaiser’s announcement, but they said a medical school could help fill the company’s own workforce needs as it continues to grow.
Kaiser will be creating a steady supply of physicians it can hire into its affiliated medical groups who practice at the company’s hospitals and clinics, though its graduates won’t be under any obligation to work for Kaiser.
“Kaiser is clearly making a statement that they want to train doctors in their culture, philosophy and way of delivering care,” said Steve Valentine, vice president and West Coast consulting leader at healthcare firm Premier Inc. “It won’t be a fit for some students. They will still want UCLA, USC, Johns Hopkins.”
Kaiser works with doctors in training now. It has about 600 physicians currently completing their residency programs, and several thousand more do some of their training at Kaiser each year.
“Medical education needs to change to keep pace with the changing healthcare delivery system and changing patient needs,” said Dr. George Thibault, president of the Josiah Macy Jr. Foundation, a New York group that supports health education. Kaiser brings its “vast experience with teamwork, coordinated care and technology.”
Some critics worry a Kaiser medical school might put too much emphasis on controlling costs at the expense of patient care.
Some Kaiser patients feel restricted at getting the care they want in the HMO’s system. Last year, the company paid a $4-million fine imposed by California regulators related to inadequate treatment of mental health patients.
“I’d rather have a physician who went to a real medical school and who is focused on what’s the best treatment for this patient,” said Scott Glovsky, a Pasadena attorney who has represented patients suing Kaiser over denials of care. “Kaiser limits creativity in the art of medicine.”
Outside experts, Medicare officials and patient safety advocates routinely give Kaiser high marks for its preventive care and overall performance. Policymakers hold up the company as a model for how it coordinates care across its hospitals and physician offices.
The Affordable Care Act pushes other insurers and medical providers to collaborate in much the same way in hopes that will lead to better care at a lower cost.