Working toward a sustainable future

In 2025, the National Product Council (NPC) — a Federation-sponsored partnership between clinicians and Kaiser Foundation Health Plan/Hospitals’ supply chain services organization — realized operating cost savings of beyond 100% in multiple categories, including orthopedic and physiological monitoring technologies. Across all spending categories, the NPC savings surpassed organizational goals by more than 40%. One notable success was securing a new 7-year agreement for pulse oximetry products, which will generate long-term financial value through rebates and technology upgrades.

Improving business capabilities

The council also continued to identify ways to use medical products more effectively, safely, and cost-efficiently across care delivery through its Value-Based Use (VBU) program. The goal of the VBU program is to ensure that clinicians have the right product for the right patient at the right time — while reducing unnecessary variation and waste. The NPC doubled the savings from 2024 to 2025 and plans to expand the program in 2026 with the launch of 25 new initiatives.

The PMG External Provider Management Community of Practice (CoP) met quarterly to share best practices for provider contracting and network management. Building on prior years’ discussions on behavioral health provider contracting and Medicare clinical documentation, the CoP expanded its focus to referral management strategies with contracted providers and modernizing provider contracting and network management systems.

In 2025, Kaiser Permanente took a significant step forward in modernizing contract systems to support network growth and value-based contracting by selecting a vendor for an enterprise-wide Contract Lifecycle Management System. This system enables the management of provider agreements, and PMG leaders played an integral role in vendor selection. They will also continue to collaborate with KFHP/H teams in planning the system’s implementation and deployment.

Ongoing labor activities

For much of 2025, the Federation’s labor relations activities centered on negotiations with the Alliance of Health Care Unions, which represents more than 60,000 clinicians and employees across the regions. Along with PMG colleagues, the Federation team helped to lead those negotiations and worked with Federation co-CEOs Maria Ansari, MD, FACC, and Ramin Davidoff, MD, to formulate strategy and partner with KFHP/H leadership. The negotiations carried into 2026 with no new agreement.

In addition to collective bargaining, the Federation partnered with KFHP/H colleagues to work with the unions in labor management partnership activities, including the Competitive Task Force, a joint committee negotiated with the Alliance back in 2021. The task force, co-sponsored by Federation Chief Operating Officer Chris Grant, is designed to responsibly look at opportunities to reduce costs, and in 2025 led to savings of $64.5 million through October.