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Brainstorm Health: Kaiser Permanente CEO, Apple and the FDA, STDs at All-Time Highs

If you want a gander at the future of technology in health care, you might take a look at an institution founded in 1945.

I speak of ye old behemoth, Kaiser Permanente. With somewhere close to 11.8 million policy holders, KP is the biggest integrated health delivery system in the country, which means it combines coverage (a health plan) and care—the latter via its 39 hospitals, 677 medical offices, 200,000-plus employees, and the 23,000 non-employee physicians in Permanente medical groups, who contract exclusively with the health plan.

Or to gauge its size in another way, if KP weren’t a not-for-profit entity, its $64.6 billion in 2016 operating revenue would place it at No. 42 on the Fortune 500—right behind Dell, and just ahead of MetLife, Aetna, and PepsiCo. As noted, it’s a behemoth.

But as I said up top, this septuagenarian Brobdingnagian health system has also made a name for itself as an innovator—and notably so in the realm of technology. That hasn’t come by accident. Under the leadership of CEO Bernard Tyson, who took command in 2013, KP has invested heavily in tech. “Of our capital spend every year, about 25% (around $3 billion) is now dedicated to our IT investments,” Tyson told me yesterday when visiting Fortune. “It’s a major commitment, as critical as if we were building another hospital or medical office building. That’s how strongly we believe in it.”

Much of this investment is focused on changing the center of gravity of healthcare—a center that has long been the hospital itself. “They built that, and then they built everything in and around it,” says Tyson, “and then everybody had to come in to the hospital [or a doctor’s office]” to get the care they needed. “We’re saying, ‘No you don’t. There are multiple access points and the hospital or doctor’s office is just another access point.’” Technology, says Tyson, can help extend that access to anyone and anywhere, make it more convenient—and, importantly, make it more affordable.

To that end, KP plan members last year had nearly 61% of “visits” with a KP doctor, nurse, or other health provider by way of a mobile device: in many of those cases, a customer simply texted a question and got an answer back, or they just wanted to access their own medical file or view lab results (which they did 45 million times in 2016, an increase of 12% over the prior year). Secure email, likewise, has largely replaced waiting endlessly for a call back from a doctor. Last year, there were nearly 24 million such email exchanges between KP members and caregivers; while customers filled nearly 22 million prescriptions online.

KP doctors, likewise, increasingly see patients by video conferencing—which is to say, in real-time. And the health system can do this without charging a copay because these triage-sessions-by-chat often save the cost of an unnecessary office visit. (“Yes, ma’am, that rash will go away.” “Yes, sir. It’s okay to have your pulse race when you’re running for a train.”) As for medical records, those are available electronically to every KP doctor, for every KP patient—which is sort of a remarkable achievement when you consider how sprawling the health system is. (Kaiser claims it’s “the largest non-governmental medical record system in the world.”)

Of course, there are many who will read the above and shudder. “There, in the maw of technology, is the swallowed soul of human contact!” you might exclaim: “There, in the name of progress and cost-cutting, lies a cold, impersonal future.”

When I pose such concerns to Tyson, he is not oblivious to them. But then he’s also not buying them. His own experience tells him otherwise: that healthcare can be both high-tech and high-touch.

In 2006, Tyson—who was then an EVP at Kaiser, newly in charge of the health plan and hospital operations—had to undergo coronary bypass surgery. Prior to the operation, he lay waiting in his hospital room, as a lot of well-meaning people came in to visit him “to make sure I was okay, and doing what people do,” Tyson recalls. Eventually, everyone except the nurse left the room. “What she saw was, ‘Here’s this guy who’s trying to be strong,’” Tyson says. “But obviously I was scared and she saw the fear. She didn’t say a single word to me. She just put her hand on top of my hand, and then she removed it and walked away. And I calmed down. I will always remember that—because it was the right medicine for the moment. She didn’t have to say a word. She understood. She got it. And she gave me comfort. I’ve told that story many times before. Because it was that one touch that helped me to frame many of the things that I talk about today: that health care is about the human touch. You can’t write a procedure to tell a nurse to do what she did. Technology is important and we leverage it as much as possible, but it is not a substitution for the touch, for the hand, for the moment.”

“We are most vulnerable when something goes wrong with our bodies,” Tyson continues. “And so to have someone that you trust, in the moment that you are putting your life in their hands—to have someone who understands you at that level, as that nurse did—is a connection that I never want to break.”

Technology, says Tyson, can take cost out of the system, create efficiencies, improve care, and make it more convenient and accessible. But it cannot substitute for touch. “The human interaction,” he says, “that’s what healthcare is about in its finest moments.”

Clifton Leaf, Editor in Chief, FORTUNE
@CliftonLeaf
clifton.leaf@fortune.com

DIGITAL HEALTH

Apple, Samsung, Fitbit join FDA digital health fast-track program. Apple, Samsung, Fitbit, Alphabet arm Verily Life Sciences, Johnson & Johnson, and Roche Holding AG are all part of a new Food and Drug Administration program meant to speed up digital health application processes—a key goal for FDA Commissioner Scott Gottlieb. (Fortune)

INDICATIONS

European regulators warn of drug production fallout from Brexit. The European Medicines Agency (EMA)—somewhat an analogue to the U.S. Food and Drug Administration for the EU—is warning that there could be a mass employee exodus if the drug regulation agency isn’t moved to the right place following Brexit. And that could cause a big disruption to European drug development at large. Just where do the regulators want to move the current London-based headquarters? Amsterdam, Barcelona, or Vienna (with Amsterdam as a potential top choice). (Reuters)

THE BIG PICTURE

STDs hit all-time high in 2016. A new CDC report finds that new STD cases spiked to a record high in the U.S. last year, driven by significant increases in chlamydia, gonorrhea, and syphilis cases, particularly among women and men who have sex with men (MSM). The public health agency is urging screening and prevention measures, especially since many of the conditions on the rise can be prevented with safe sex and antibiotics.

There’s another big health care program that’s getting ignored. The major health care headline on Tuesday was the collapse of yet another Republican Senate effort to repeal Obamacare; but, while the health law will likely remain a political and policy football for the foreseeable future, there’s another major program whose funding expires at the end of this month: the Children’s Health Insurance Program, which provides health coverage to some nine million kids in low-to-middle income households and was the largest health care coverage expansion since Medicare/Medicaid before Obamacare came around. (Fortune)

REQUIRED READING

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The VC Who Passed on Elon Musk Speaks Outby Polina Marinova

Neuroscientist Proves What You Already Knew: Your Dog Really Does Love Youby Chris Morris

Your Guide to Getting WiFi On Most Major Airlinesby Lisa Marie Segarra

Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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