The longtime chairman and chief executive of Kaiser Permanente, George Halvorson, plans to retire in December 2013, and the nonprofit health system is searching for a new leader.
Halvorson, 65, helped build the Oakland company into the nation's largest nonprofit insurer and hospital system, with more than 9 million customers and nearly $50 billion in annual revenue. It employs 17,000 physicians nationwide. Kaiser is the largest health maintenance organization in California with about 6.6 million members. It runs 35 hospitals in the state.
Halvorson has been an influential figure in the healthcare industry for years. During the debate over the federal Affordable Care Act, many government officials cited Kaiser's integrated approach to patient care as a model for how to improve quality and reduce costs. Independent groups also regularly give Kaiser high marks for patient safety and member satisfaction.
"He was a committed foot soldier to the healthcare reform movement," said Cheryl Damberg, a senior researcher at Rand Corp., a nonprofit think tank in Santa Monica. "Kaiser is clearly at the forefront of demonstrating how to deliver high-quality care to patients and holding medical providers accountable for their performance."
After taking the helm at Kaiser in 2002, Halvorson led the development of its industry-leading electronic medical record system. Last year, patients used the system to send more than 12 million emails to their doctors and schedule nearly 3 million appointments.
"What we have done is a totally electronic, paper-free environment where data is flowing freely from doctor to doctor and to the patient," Halvorson said. "I'm really happy with what we've achieved, and it's time to hand that over to someone else."
Halvorson said he announced his departure more than a year in advance to give Kaiser's board time to deliberate on a successor. He said the board would consider both internal and external candidates.
His announcement marks another executive shake-up in the healthcare industry. In May, Blue Shield of California's chief executive, Bruce Bodaken, said he was retiring at year's end and Paul Markovich was being promoted to the top job.
In August, industry giant WellPoint Inc. began searching for a new CEO after Angela Braly left amid growing investor criticism about the company's performance. WellPoint runs Anthem Blue Cross in California.
Some employers have complained that Kaiser hasn't done enough to lower its costs and it continues to pass along significant rate hikes year after year.
"Kaiser has a well-integrated and well-managed delivery system, and their premiums are either the same or higher than other health plans," said Glenn Melnick, a USC health policy professor.
Halvorson said Kaiser typically offers more comprehensive benefits than competitors at rates that are often 10% less.
In 2010, the latest information available, Halvorson earned $7.7 million in total compensation, according to Kaiser's federal tax filing.