At a time when much of the nation's economy is on life support, the giant health maintenance organization Kaiser Permanente opened a state-of-the-art, $600-million hospital in Hollywood on Tuesday, a feat that illustrates the vitality of the healthcare sector and of Kaiser itself.
The nation's largest nonprofit healthcare organization, Kaiser employs more than 128,000 people in California and is the largest private employer in Los Angeles County. It is positioning itself for even more growth as the Obama administration pushes sweeping changes in the way the nation delivers healthcare.
Kaiser gets its share of controversy, medical scandals and patient complaints. Even so, reformers in the U.S. and abroad are looking at Kaiser as a model of some of the biggest ideas in healthcare today -- prevention and demonstrable quality care, such as high mammography rates and top cardiac surgery results. It's also priced less than most competitors.
Chairman George C. Halvorson thinks Kaiser can capitalize on the growing demand from employers, consumers and policymakers for measurable results and relative value.
"In the midst of this continuing recession, we believe that our ability to deliver better care more efficiently will give us a competitive advantage," he said last month.
That puts Kaiser in the fore of a tectonic shift in the economy. Nowhere is that more visible than in Southern California. For decades, the Cold War fueled the aerospace industry, the region's most robust job machine. But quietly, over the last decade, bum knees, clogged arteries and other ailments have replaced airplanes, moon rockets and space shuttles as the region's primary job engines.
Today, hospitals like the 465-bed facility Kaiser just opened on Sunset Boulevard are the new factories of an economy that is reshaping itself to produce the services an aging America needs most.
The U.S. spends $2.5 trillion, or 16% of the nation's gross domestic product, on healthcare. Within a decade, that is expected to climb to 20%.
"Healthcare is, to some extent, independent of the business cycle," said Esmael Adibi, director of Chapman University's Anderson Center for Economic Research. "It's a domestic growth industry. As people are aging, you need more workers, whether it is in the clinic, offices or hospitals."
In the Los Angeles area, almost 1 in 10 workers is employed in healthcare. That was true for heavy industry, including aerospace, a decade ago. Now, 1 in 16 working Angelenos is employed in that sector.
