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As the enrollment base grew, the CPMG was able to directly offer more specialty care. When KP first entered the market, it intended to target only the Research Triangle area. Over time, however, KP—Carolina's service area grew to encompass 22 of the state's counties, including the Charlotte metropolitan area. Its provider network included more than physicians, nurses, and physician extenders in nine medical offices, plus more than contracting community providers Silberman Instead, it contracted with hospitals on a per diem or case rate basis for regular inpatient hospitalizations and on a discounted FFS basis for outpatient hospital services Silberman KP—Carolina and the CPMG had a mutual risk-sharing arrangement that allowed both parties to share in both the positive and negative financial results.
Individual physician shareholders were eligible for bonus payments when both the CPMG and the health plan had positive financial results. Although other medical groups and IPAs relied on capitation revenue from HMOs, they did not exhibit the mutual exclusivity of the group or staff model. Then a flurry of HMO activity took place, dramatically altering North Carolina's competitive health care landscape in the mid-to-late s.
Numerous network-model HMOs, with primary care contracts with individual physicians in the local communities, began to compete against KP—Carolina. An important factor in KP's successful entry into other regions was the strong backing of influential local organizations. On the West Coast and in Colorado, Kaiser was strongly supported by the AFL-CIO, which liked its emphasis on comprehensive benefits and preventive medicine and demanded that employers offer Kaiser as an alternative to the traditional insurance.
Given this history, KP—Carolina targeted North Carolina public employees as the initial foundation of its enrollee base. KP—Carolina was one of the first alternative plans that the SHP offered, and it proved to be a popular choice. In fact, in , KP—Carolina had the highest enrollment of any alternative plan to the SHP's traditional indemnity option, with enrollment peaking at 26, SHP members.
This constituted Although KP—Carolina depended heavily on the SHP for enrollment, it also was initially successful among private-sector employers within the Research Triangle market. Enrollment figures show that KP—Carolina steadily grew during the first years of its operation, attracting 28, members by the end of and reaching 56, enrollees by NCDOI By the end of , KP—Carolina had 97, enrollees, a number that rose to , by the end of and reaching a peak of , by the end of Then in the mids the rate of growth slowed substantially as competition from other health plans heated up in an increasingly crowded market.
From until , KP—Carolina was profitable. After this brief period of profitability, KP—Carolina's financial performance worsened considerably.
But in , the Carolina Premier Medical Group filed for bankruptcy. What were the barriers to building a viable prepaid group practice? In this section, we highlight the major political factors as identified by the participants that impeded KP's effort to build a viable prepaid group practice in North Carolina: regulatory uncertainty, the politics of the SHP's structure and operations, and resistance from provider groups to a prepaid group practice.
Although some factors might seem unique to North Carolina, reports and evidence from the field suggest that similar barriers exist in other regions of the country. In the mids, KP—Carolina, as one of the first HMOs and the first prepaid group practice in the market, faced a fluid and uncertain regulatory environment. That changed, however, when employer purchasers, seeking assurance that the new, undercapitalized HMOs would be similar to indemnity insurance in stability and predictability, asked the department to set new requirements because there had been three HMO insolvencies from to in the market areas where KP had begun operating.
At first, the department persuaded all the HMOs to open their enrollment to clients who had been left without health coverage by a bankruptcy. In , the General Assembly defined prepaid health plans as risk-bearing entities, subjecting them to market conduct requirements and new minimum capital requirements.
The Health Maintenance Organization Solvency Act created new financial reserves rules, insolvency protections, and cost and utilization review requirements. To protect enrollees, the department further increased solvency standards in and set more stringent standards for the operation of HMOs. One critical challenge specific to prepaid group practice was whether KP—Carolina would be regulated as an insurance entity or as a health care plan or provider.
Proponents of community-sponsored, prepaid direct-service plans contended that examining the stability of the medical practice would have been more important than imposing solvency requirements on the health plan. That fact presented challenges in regard to network adequacy and construction and the definition of service areas and ratings, with which the regulators were unfamiliar.
KP's specific challenges were administrative and compliance issues. Rules on how service areas were defined and how networks had to be built—such as the requirement that KP had to have certain types of providers within certain geographic areas—meant that KP could not effectively negotiate pricing with particular specialties and subspecialties.
For example, KP had to contract with the specialists in Raleigh and could not send its patients outside that area, even though the specialists there demanded higher prices. Nor could they send Charlotte patients to the Research Triangle for transplants.
Thus, despite the best efforts of the local sponsors and proponents of the PGP model to create a favorable regulatory environment before entering the market, KP—Carolina faced some unusual regulatory challenges during its start-up phase. KP achieved some of its greatest successes in other regional expansions by enrolling large numbers of members from either private-sector unions or public employee systems.
Although North Carolina had few unions to spur enrollment, it did have a large public employee system. KP—Carolina believed that if given a choice of plans and an opportunity to pay lower premiums, state employees enrolled in the traditional indemnity plan within the State Health Plan would transfer to KP's low-cost, comprehensive prepaid group-practice plan.
In other public employee systems in which KP prospered, all competitors were required to offer similar, if not the same, benefits. The SHP's underlying politics and structure, however, posed significant challenges to KP—Carolina's ability to capitalize on a large and growing base of potential state employee enrollees. Under its enacting statute, all SHP benefits were enumerated in law, and any benefits offered under all prepaid hospital and benefit plans had to be at least comparable to those offered under the SHP's indemnity plan.
This provision limited KP's ability to tailor its benefits design. In the s, employees had to pay the price difference to enroll in health plans with higher total premiums than the CMMP, but they were not rewarded with savings by selecting health plans with lower total premiums. In , for example, KP had offered an employee-only policy for 9 percent less than the CMMP, but employees were not given any incentive to enroll in KP, despite the cost savings to the state.
This worked against KP—Carolina and its traditionally lower-cost business model. Thus over time, KP's early and overall penetration into the SHP was significantly lower than its penetration into other federal and state employee health programs see figure 1.
The SHP also refused to allow KP and the other health plans to place any limits on mental health or substance abuse treatment, although theirs was a more generous benefit than that of the self-insured indemnity plan, despite clear evidence of adverse selection in similar circumstances Frank et al. Consequently, employees who expected to use the health care services often were more likely to select KP's more comprehensive services and lower cost-sharing copayments, etc.
By the late s, the Fiscal Research Office of the North Carolina General Assembly, which maintained strict oversight and, in some years, de facto control of the SHP, was determined not to let HMOs enjoy what they perceived as favorable rather than negative risk selection.
The SHP concluded that the people exiting the indemnity plan were younger, and thus presumably healthier, than those remaining enrolled. The state's risk adjustment was based on age, ensuring that the younger employees choosing HMOs would end up subsidizing older workers who stayed with the Comprehensive Major Medical Plan.
According to Dr. The KP national office presented the SHP with a five-factor method of risk adjustment, but the state officials preferred their own methodology.
KP—Carolina opposed the surcharge, claiming that risk should not be computed solely as a function of age and that the SHP did not compensate KP for the older members that it attracted. KP—Carolina's national perspective—that there should be no preexisting exclusion period of any sort and no lifetime cap on benefits—ended up hurting its bottom line.
Most of the other HMO competitors had both an exclusion period and a lifetime cap on benefits, which meant that those people who had reached their lifetime maximum in another plan or who had serious medical conditions that could not wait out the usual six-month preexisting condition period enrolled in KP. A risk adjustment that also considered the patient's sex and severity of illness would have enabled KP to receive more than the standard monthly payment when the employee's health status was less favorable than average.
Newer companies such as Wellpath gained market share in the state health plan membership by initially offering their plans at prices significantly lower than KP—Carolina's.
Because younger and healthier employees were motivated primarily by price, these new options were able to attract better risks, leaving both KP and the older HMOs with disproportionately more bad risks UNC Other SHP policy choices also exacerbated the adverse selection problem over time.
Unlike some other public employee health programs, the State Health Plan pools retirees and active employees. These policies had at least two negative effects.
Second, this situation probably created an adverse selection, since dependents would have a strong incentive to obtain coverage elsewhere and those who could not would likely include some members who were unable to do so because of their health status. As a result of these problems, by the premium for KP and other health plans was actually greater than that of the fully subsidized percent employer paid CMMP option in the SHP see figure 1.
Although KP initially entered the SHP as a plan option with a premium that undercut even the CMMP's premium, the combination of low enrollment incentives to state employees and the enforced subsidization of the CMMP translated into higher premiums after the first year, further reducing enrollment incentives for state employees.
Over time, as KP's premiums rose, most of its members who left went back to the CMMP, which did not raise its base premiums at all from to A smaller number of members transferred to less costly competitor plans.
During this period, KP's premium, paid by the employees, was between 20 and 46 percent greater than the CMMP's employer-paid premium. Thus, at some point, the cost differential became too high, first for the healthier members and then even for the sicker members. Cohesive physician organizations can find ways to inhibit the entry and growth of prepaid group practices.
This can include informal means, such as the public characterization of PGPs as dispensing low-quality medicine. Physicians and hospitals in the traditional medical community in North Carolina were quite hostile to prepaid group practice. KP—Carolina did not adequately anticipate the magnitude of this resistance and so was slow to counter it.
The North Carolina Medical Society also was generally opposed to KP—Carolina, and in fact, some specialist medical societies organized against prepaid health plans. The nature of the market itself may have contributed to KP's failure to expand in this new region.
PGPs require sufficient population density so that they can enroll a critical mass of members within a referral area sufficient to support a multispecialty group practice that represents most of the secondary care specialists. The Research Triangle had the smallest and least dense population base of any market in which KP operated.
The market analysis on which KP based its decision to enter the state suggested that KP—Carolina would have had to enroll 40, members in order to achieve financial viability, a figure that, in retrospect, looks astonishingly low. As it turned out, KP—Carolina needed a much higher enrollment, perhaps as many as , members in the Triangle alone, to reap the economies of scale on which its business model depended.
Although it exceeded that number in the state, it never gained that market share in the Triangle. Two important marketing and financial assumptions proved difficult to meet: 1 people would join KP because it was KP even though its provider network was tiny and a closed-group practice was an unfamiliar arrangement , and 2 membership would grow because their premiums would be 20 to 25 percent below those of their competitors.
For KP to market its comparative advantage, employers would need to be willing to offer choices among plans and also be willing to structure the choice so that employees could share the savings if they selected a less expensive plan. As is the case with any new health plan, KP—Carolina faced a two-tiered marketing challenge. First, it had to convince employers to offer its product. Then, if employers offered several different options to their employees, KP had to convince the employees to choose its product over other health plans.
Most employees worked in firms in which multiple choices would be very costly to administer, such as national firms with a small concentration of employees in many regional markets. And not until , facing the rising costs of employee health benefits, did the Research Triangle's largest employers, like IBM and Cisco Systems, become members of the newly formed Triangle now North Carolina Business Group on Health personal communication from Jack Rodman, May 20, Unfortunately for KP—Carolina, many employers especially small firms preferred contracting with a single carrier or insurer that could offer a menu of health plan options to contracting with multiple carriers.
Major commercial carriers and insurers have capitalized on the administrative convenience of single-plan replacement and have developed employee-choice products for small employers.
Because of adverse selection and other concerns, carriers often refuse to offer a comprehensive plan alongside a different carrier's plan that has a markedly different level of coverage.
For example, a KP manager noted that many of the large banks in Charlotte claimed that commercial insurance carriers offered better deals, broader geographic coverage, and greater physician choice than KP—Carolina could. In addition, some large employers were national firms with centralized buying offices that negotiated only with those health plans that had a presence in several states, including those where KP did not have a presence.
KP—Carolina faced two other challenges in marketing its product to private-sector enrollees. First, employers that contracted with KP—Carolina often continued a historical practice of paying all or a high fixed percentage of the monthly premiums. KP's initial market analysis signaled the pervasiveness of this practice when it noted that only 35 percent of the employers it surveyed required employees to pay all or part of the monthly premium KPAS That is, two-thirds of the surveyed firms dampened one of KP—Carolina's key selling points to prospective enrollees: comprehensive coverage at a low cost.
In addition, KP's premiums were higher than those of some of its competitors. Consequently, KP—Carolina attempted to enroll recent arrivals to the state, the majority of whom relocated to the Charlotte and Triangle markets. In addition to meeting the two-tiered marketing challenge, KP's success depended heavily on efficiently providing medical care through the group-practice model.
Here, too, the Carolina Permanente Medical Group encountered difficulty. As one interview participant noted:. In those markets where [KP] had created a favorable cost structure, the local medical group has essentially taken and executed the responsibility for making that happen.
They have found ways to perform more effectively than community physicians, often requiring some sacrifices on the part of the physicians to achieve that level of performance either in how hard they work or in how much they get paid or in how they utilize resources. The medical groups have themselves created those efficiencies.
Whether it's will or skill or circumstances, the medical group in Raleigh was never able to achieve the level of efficiency that would afford that kind of cost structure. The CPMG also faced the dilemma of having to operate many small clinics in order to maintain convenient access for its geographically dispersed enrollees, even though the high fixed costs of doing so undercut its ability to achieve and sustain the scale efficiencies necessary to support its cost-leadership strategy.
Those clinics were filled. However, not all of KP—Carolina's nine medical offices had such a high volume of patients. KP—Carolina and the CPMG could not achieve the economies of scale necessary to generate and maintain market share by offering lower premiums, lower out-of-pocket expenses, and more comprehensive benefits to prospective enrollees.
PGPs require a supply of high-quality providers hospitals and specialists willing to contract on terms similar to those granted to other carriers. The CPMG did not employ its own specialists or own its own hospitals, as KP and its medical groups did in other parts of the country. Even obstetric and gynecological services, often considered primary care specialties elsewhere, were not provided by the CPMG until the early s, perhaps because KP—Carolina lacked the volume necessary to support the fixed costs of internalizing these services.
This meant that the CPMG exerted less control over utilization and costs than it might have. And many interview participants suggested that the CPMG compounded the problem by contracting with specialists and hospitals at unfavorable fee-for-service rates.
The high fixed costs of maintaining a PGP infrastructure became an increasing liability as new market entrants increased the level of price competition. Prospective enrollees did not see a significant enough price difference to offset the restricted choice and geographic inconvenience of KP—Carolina physicians and facilities.
People were looking to the health plan where they could maintain their provider relations. Like other organizations with multidivisional structures, KP's corporate headquarters struggled to find the right balance between giving new regions the flexibility and autonomy they needed to respond to local market conditions and advancing KP's corporate goals and maintaining consistent policies.
Some of KP's corporate decisions benefited the organization as a whole but constrained the region's ability to respond to start-up demands in a challenging market. For example, the company required the region to repay its start-up debt with interest, at rates that some former KP—Carolina managers described as above market. From the KP corporate point of view, the decision made sense given its experience in Texas, where the West Coast medical groups had been incensed about having to subsidize an operation that lost money for 15 years.
Moreover, it needed its investment repaid quickly, as its West Coast regions were clamoring for funds for information technology and facility upgrades. In our interviews, current and former KP corporate executives downplayed the significance of the debt service requirement in KP—Carolina's performance problems, but former KP—Carolina regional managers expressed a different point of view. Similarly, in the early s, KP's corporate headquarters urged KP—Carolina and other regions to develop business plans for achieving and sustaining a 15 to 20 percent price differential from competitors.
Faced with heated competition from network-model managed care plans, KP corporate headquarters jointly conducted a study with a major consulting firm and affirmed its commitment to the cost-leadership strategy. The consulting firm encouraged KP to think about market share as an important success factor. The conventional wisdom was that with a good economic base, marketplace presence was a key factor. At the time, KP—Carolina had just reported its first profitable year and had priced its product above the average for the market in order to reflect its true costs of operation including service on the start-up debt.
Again, the opinions on the wisdom of this corporate decision differed. As one CPMG leader stated:. We were encouraged, to use a mild word, to reduce our operating infrastructures enough to support a 15 to 20 percent lower price point. But we were unable to cover the cost of what we were doing.
The solution was applied uniformly across the organization, which I think in retrospect everybody believes was a problem. Current and former KP national executives disagreed, arguing that the problem was not the wisdom of the strategy but, rather, its poor execution by the medical group. Corporate executives cited the inability or unwillingness of regional leaders—especially in the CPMG—to build a sustainable business model based on tight cost control.
These constraints were said to include limits on plan and benefit design as well as on advertising, sales, and marketing. Interview participants disagreed about whether the failure to achieve the requisite operating efficiencies to sustain this corporate objective resulted from problems of ability, willingness, or circumstances.
The general business literature indicates, however, that simultaneously achieving revenue growth and cost control in a start-up is daunting even under ideal market circumstances e. Like many organizations, KP routinely transferred personnel laterally in order to shift needed expertise from one region to another and to enhance career development. Several interview participants reported, however, that this did not work well in the case of KP—Carolina.
Not surprisingly, senior KP—Carolina managers disagreed, contending that the lack of entrepreneurship stemmed not from inexperienced management but from national corporate constraints on innovation. As one said:. The original leadership brought in to start this region was supposed to replicate, not innovate. The job was to replicate the KP model in North Carolina.
There was no room for entrepreneurship, nor would it have been welcomed. We were given binders of material that we were supposed to use—staffing ratios, financial reporting formats, marketing materials, benefit plans, graphic standards, staff training tools, even floor plans.
They wanted us to stick to the recipe. It was the Oakland way—or no way. As the competition from less restrictive managed care products intensified, KP—Carolina tried to complement its group-model HMO with a point-of-service product and an IPA-model product. Two problems immediately arose. First, KP—Carolina did not have the organizational capability to effectively manage an extensive network of contracted providers. Its business systems could not track members as they moved through a more open, networked delivery system, pay claims in a timely and accurate manner, or monitor utilization across loosely affiliated physicians and hospitals.
As one former CPMG employee noted:. We didn't know how to pay a claim. We hadn't had to pay very many claims. We had a lot of capitated and prepaid specialty arrangements and all of a sudden we started getting claims in, and I remember when 50,, you know, six months of claims went unpaid. It was outrageous. KP—Carolina managers and medical directors found it hard enough to build the familiar group-model delivery system from scratch under less than hospitable market conditions.
Simultaneously creating and managing a network model so far removed from KP's core competence proved impossible. Moreover, by trying to straddle the gap between staff-model and network-model product markets, KP—Carolina diverted precious resources from its core product and its core constituencies. The original group-health model concept did not get the attention that it needed and started to deteriorate.
This seemed a good way to build enrollment, increase volume, and counter the growth of competing products. Reflecting on KP's flirtation with network models in North Carolina and other regions, several interview participants commented that the flawed strategy nearly cost the company its soul.
Perhaps this is the most important internal lesson that KP as an organization could learn from its North Carolina experience. It is easy for outside observers to be critical of a business strategy and outcome after the fact. However, reflecting on our analysis of the North Carolina experience, David Lawrence, KP's CEO at the time, concluded that the regional failure was due to an internal corporate failure to understand how to expand:. KP expanded with a missionary zeal that substituted for careful, thoughtful planning and development of the core modules required to incrementally build a viable business.
We did not learn from other industries, follow established pathways for successful expansion that have occurred in other industries, etc. It is an important lesson for us. We operated with a California bias and had no real understanding of what was required to accomplish, execute a start-up, and to build a successful business. I do not think the model was wrong; rather, it was in the execution. Stated differently, I do not believe we have tested whether or not the model can be successful yet.
We thus conclude that the KP experience in North Carolina illustrates in microcosm the complex interdependencies that determined the fate of a KP expansion effort, not to mention similar efforts by other PGPs around the country. The demise of several KP regional expansions reinforces the importance of the numerous interlocking pieces that are necessary to foster a market in which a prepaid group practice can exercise its competitive advantage. It is clear that in North Carolina none of the important factors was pointing in the right direction.
He was the first chairman to not be a member of the Kaiser family. David M. Lawrence served as chairman and CEO until his retirement in On November 5, , the board of directors announced that Bernard J. Tyson , Kaiser's president and chief operating officer for the last two years, would replace Halvorson, [7] marking the first time an African American was appointed as chairman. Adams assumed the role of chairman and CEO in December As of , Kaiser Permanente had In addition, Kaiser Foundation Hospitals despite the plural name, a single legal entity operates medical centers in California, Oregon, [15] and Hawaii, and outpatient facilities in the remaining Kaiser Permanente regions.
The hospital foundation entity is not-for-profit and relies on the Kaiser Foundation Health Plans for funding.
It also provides infrastructure and facilities that benefit the for-profit medical groups. Kaiser Permanente is administered through eight regions, including one parent and six subordinate health plan entities, one hospital entity, and nine separate, affiliated medical groups:.
In addition to the regional entities, in , the then-twelve Permanente Medical Groups created The Permanente Federation LLC , a separate entity, which focuses on standardizing patient care and performance under one name and system of policies. A mutual benefit corporation named "Kaiser Foundation for the Advancement of Integrated Health Care" was established on December 27, The specific purpose of the corporation is "to advocate for and promote the integrated models of health care".
The history of Kaiser Permanente dates to and a tiny hospital in the town of Desert Center, California. At that time, Henry J. Kaiser and several other large construction contractors had formed an insurance consortium called Industrial Indemnity to meet their workers' compensation obligations. Soon enough, Garfield's new hospital was in a precarious financial state with mounting debt and the staff of three going unpaid , due in part to Garfield's desire to treat all patients regardless of ability to pay, as well as his insistence on equipping the hospital adequately so that critically injured patients could be stabilized for the long journey to full-service hospitals in Los Angeles.
It was Hatch who proposed to Garfield the specific solution that would lead to the creation of Kaiser Permanente: Industrial Indemnity would prepay Later, Garfield also credited Ordway with coming up with the general idea of prepayment for industrial health care and explained that he did not know much at the time about other similar health plans except for the Ross-Loos Medical Group.
Hatch's solution enabled Garfield to bring his budget back into the positive, and to experiment with providing a broader range of services to the workers besides pure emergency care. However, in March , Consolidated Industries a consortium led by the Kaiser Company initiated work on a contract for the upper half of the Grand Coulee Dam in Washington state, and took over responsibility for the thousands of workers who had worked for a different construction consortium on the first half of the dam.
Edgar Kaiser, Henry's son, was in charge of the project. To smooth over relations with the workers who had been treated poorly by their earlier employer , Hatch and Ordway persuaded Edgar to meet with Garfield, and in turn Edgar persuaded Garfield to tour the Grand Coulee site. Garfield subsequently agreed to reproduce at Grand Coulee Dam what he had done on the Colorado River Aqueduct project.
Unlike the workers on Garfield's first project, many workers at Grand Coulee Dam had brought dependents with them. The unions soon forced the Kaiser Company to expand its plan to cover dependents, which resulted in a dramatic shift from industrial medicine into family practice and enabled Garfield to formulate some of the basic principles of Kaiser Permanente.
It was also during this time that Henry Kaiser personally became acquainted with Garfield and forged a friendship which lasted until Kaiser's death. In , the Kaiser Company began work on several huge shipbuilding contracts in Oakland, and by the end of would control four major shipyards on the West Coast. During , the expansion of the American defense-industrial complex in preparation for entrance into World War II resulted in a massive increase in the number of employees at the Richmond shipyard.
On March 1, , Sidney R. In July, the Permanente Foundation formed to operate Northern California hospitals that would be linked to the outpatient health plans , followed shortly thereafter by the creation of Northern Permanente Foundation for Oregon and Washington and Southern Permanente Foundation for California.
Kaiser's first wife, Bess Fosburgh, liked the name. An abandoned Oakland facility was modernized as the bed Permanente Hospital opened on August 1, this facility evolved over the decades into today's flagship Kaiser Oakland Medical Center.
Three weeks later, the bed Richmond Field Hospital opened. Six first aid stations were set up in the shipyards to treat industrial accidents and minor illness.
Each first aid station had an ambulance ready to rush patients to the surgical field hospital if required. Stabilized patients could be moved to the larger hospital for recuperative care. These physicians established California Physicians Service to offer similar health coverage to the families of shipyard workers.
Meanwhile, during the war years, the American Medical Association AMA which opposed managed care organizations from their very beginning tried to defuse demand for managed care by promoting the rapid expansion of the Blue Cross and Blue Shield preferred provider organization networks.
In , Henry J. Kaiser and Dr. Sidney R. In , the Kaiser Permanente health plan was opened to the public. In , Kaiser established the Henry J. Membership bottomed out at 17, for the entire system but then surged back to 26, within six months as Garfield aggressively marketed his plan to the public.
During this period, a substantial amount of growth came from union members; the unions saw Kaiser Permanente care as more affordable and comprehensive than what was available at the time from private physicians under the fee-for-service system. Kaiser Permanente membership soared to , in , , in , , in , , in , and , in From onward, both Kaiser Permanente and Garfield fought numerous attacks from the AMA and various state and local medical societies.
Henry Kaiser came to the defense of both Garfield and the health plans he had created. In , the organization acquired its current name when Henry Kaiser unilaterally directed the trustees of the health plans, hospital foundations, and medical groups to add his name before Permanente.
That same year, Kaiser Permanente also began experiments with large-scale multiphasic screening to identify unknown conditions and to facilitate treatment of known ones. Henry Kaiser became fascinated with the health care system created for him by Garfield and began to directly manage Kaiser Permanente and Garfield. This resulted in a financial disaster when Kaiser splurged on the new Walnut Creek hospital; his constant intermeddling led to significant friction at every level of the organization.
The situation was not helped by Kaiser's marriage to Garfield's head administrative nurse who had helped care for Kaiser's first wife on her deathbed , convincing Garfield to marry the sister of that nurse, and then having Garfield move in next door to him. Clifford Keene who would eventually serve as president of Kaiser Permanente later recalled that this arrangement resulted in a rather dysfunctional and combative family in charge of Kaiser Permanente.
Keene was an experienced Permanente physician whom Garfield had personally hired in During he had been trying to get a job at U. Steel , but on the morning of December 5, , with internal tensions worsening day by day, Garfield met with Keene at the Mark Hopkins Hotel in San Francisco and asked him to turn around the organization.
It took Keene 15 years to realize that Kaiser had forced Garfield to ask Keene to become his replacement. Due to the chaos on the board, Keene at first took control with the vague title of Executive Associate, but it soon became clear to everyone that he was actually in charge and Garfield was to become a lobbyist and "ambassador" for the HMO concept.
However, even with Garfield relieved of day-to-day management duties, the underlying problem of Henry Kaiser's authoritarian management style continued to persist. After several tense confrontations between Kaiser and Permanente Medical Group physicians, the doctors met with Kaiser's top adviser, Eugene Trefethen, at Kaiser's personal estate near Lake Tahoe on July 12, Trefethen came up with the idea of a contract between the medical groups and the health plans and hospital foundations that would set out roles, responsibilities, and financial distribution.
While Keene and Trefethen struggled to fix the damage from Kaiser's micromanagement and Garfield's ineffectual management, Henry Kaiser moved to Oahu in and insisted on expanding Kaiser Permanente into Hawaii in He quickly ruined what should have been a simple project, and only a last-minute intervention by Keene and Trefethen in August prevented the total disintegration of the Hawaii organization.
Having overseen Kaiser Permanente's successful transformation from Henry Kaiser's health care experiment into a large-scale self-sustaining enterprise, Keene retired in In , all six of Kaiser Permanente's regions had become federally qualified health maintenance organizations.
In , Kaiser acquired a nonprofit group practice to create its Mid-Atlantic region, encompassing the District of Columbia, Maryland, and Virginia. In , Kaiser Permanente expanded to Georgia. By , Kaiser Permanente provided coverage for about a third of the population of the cities of San Francisco and Oakland; total Northern California membership was over 2. Elsewhere, Kaiser Permanente did not do as well, and its geographic footprint changed significantly in the s.
The organization spun off or closed outposts in Texas , North Carolina , and the Northeast. In , Kaiser Permanente sold its Texas operations, where reported problems had become so severe that the organization directed its lawyers to attempt to block the release of a Texas Department of Insurance report. This prompted the state attorney general to threaten to revoke the organization's license. The organization also sold its unprofitable Northeast division in The Ohio division was sold to Catholic Health Partners in In , Kaiser Permanente celebrated its fiftieth anniversary as a public health plan.
Two years later, national membership reached nine million. In , the organization established an agreement with the AFL-CIO to explore a new approach to the relationship between management and labor , known as the Labor Management Partnership.
Going into the new millennium, competition in the managed care market increased dramatically, raising new concerns. The Southern California Permanente Medical Group saw declining rates of new members as other managed care groups flourished. This information technology failure led to major changes in the organization's approach to digital records. Under George Halvorson's direction, Kaiser looked closely at two medical software vendors, Cerner and Epic Systems , ultimately selecting Epic as the primary vendor for a new system, branded KP HealthConnect.
Although Kaiser's approach shifted to "buy, not build," the project was unprecedented for a civilian system in size and scope.
Early in the 21st century, the NHS and UK Department of Health became impressed with some aspects of the Kaiser operation and initiated a series of studies involving several health care organizations in England.
The management of hospital bed-occupancy by KP, by means of integrated management in and out of hospital and monitoring progress against care pathways has given rise to trials of similar techniques in eight areas of the UK.
In , a controversial study by California-based academics published in the British Medical Journal compared Kaiser to the British National Health Service , finding Kaiser to be superior in several respects. Second, its doctors are salaried rather than paid per service, which removes the main incentive for doctors to perform unnecessary procedures. Thirdly, KP attempts to minimize the time patients spend in high-cost hospitals by carefully planning their stay and by shifting care to outpatient clinics.
This practice results in lower costs per member, cost savings for KP and greater doctor attention to patients. Alleged violations of California's timely access laws included failures to accurately track wait times and track doctor availability amid evidence of inconsistent electronic and paper records.
It was also found by the DMHC that patients received written materials circulated by Kaiser dissuading them from seeking care, a violation of state and federal laws. DMHC also issued a cease and desist order for Kaiser to end the practices.
The report found Kaiser had put systems in place to better track how patients were being cared for but still had not addressed problems with actually providing mental health care that complied with state and federal laws. It also issued a statement which denied much of the wrongdoing. In Kaiser settled five cases for alleged patient dumping —the delivery of homeless hospitalized patients to other agencies or organizations in order to avoid expensive medical care—between and Los Angeles city officials had filed civil and criminal legal action against Kaiser Permanente for patient dumping, which was the first action of its kind that the city had taken.
At the time that the complaint was filed, city officials said that 10 other hospitals were under investigation for similar issues. In , Northern California Kaiser Permanente initiated an in-house program for kidney transplantation. Upon opening the transplant center, Kaiser required that members who are transplant candidates in Northern California obtain services exclusively through its internal KP-owned transplant center. However, patients who needed a kidney were less likely to be offered one.
At other California transplant centers, more than twice as many people received kidneys than died during the same period. Unlike other centers, the Kaiser program did not perform riskier transplants or use donated organs from elderly or other higher-risk people, which have worse outcomes. Northern California Kaiser closed the kidney transplant program in May As before, Northern California Kaiser now pays for pre-transplant care and transplants at other hospitals.
This change affected approximately 2, patients. Kaiser operates a Division of Research, which annually conducts between and studies, and the Center for Health Research, which in had more than active studies.
Kaiser's bias toward prevention is reflected in the areas of interest—vaccine and genetic studies are prominent. The work is funded primarily by federal, state, and other outside non-Kaiser institutions. Kaiser has created and operates a voluntary biobank of donated blood samples from members along with their medical record and the responses to a lifestyle and health survey.
De-identified data is shared with both Kaiser researchers and researchers from other institutions. Kaiser Permanente announced its plan to start a medical school in December, , and the school welcomed its inaugural class in June, The Kaiser Permanente Bernard J. The school will waive all tuition for the full four years of medical school for its first five classes. In order to contain costs, Kaiser requires an agreement by planholders to submit patient malpractice claims to arbitration rather than litigating through the court system.
This has triggered some opposition. Wilfredo Engalla is a notable case. In , Engalla died of lung cancer nearly five months after submitting a written demand for arbitration. Watchdogs have accused Kaiser of abusing the power imbalance inherent in the arbitration system.
Kaiser engages in many cases whereas a customer will usually engage in just one and Kaiser can reject any arbitrator unilaterally, thus they can select company-friendly arbitrators over those that rule in favor of customers. As a large organization, Kaiser can also afford to spend much more on lawyers and orators than the customer, giving them more advantages. The degree to which this office is actually independent has been questioned. Patients and consumer interest groups sporadically attempt to bring lawsuits against Kaiser Permanente.
Recent lawsuits include Gary Rushford's attempt to use proof of a physician lie to overturn an arbitration decision. In one case, Kaiser attempted to significantly expand the scope of its arbitration agreements by arguing it should be able to force nonsignatories to its member contracts into arbitration, merely because those third parties had allegedly caused an injury to a Kaiser member which Kaiser had then allegedly exacerbated through its medical malpractice.
Kaiser permanente board of directors | On November 11,up to 18, nurses went on strike at KP direcctors in Northern California over Ebola very caresource snp opinion and patient-care standards during union contract talks. In these cases, market conditions created by the employer single-source and employee contribution policies that did not highlight cost differences forced health plans to abandon the pure staff virectors InterStudy Email: Honeypot Leave this field empty if you're human:. Drive quality, innovation, and collaboration at an industry leader, and make a difference in the lives of millions. These reforms enabled prepaid health plans to acquire facilities; make loans to link medical groups; contract to provide health care services; contract to provide marketing, enrollment, and administrative services; contract with traditional insurers for insurance, indemnity, or reimbursement kaiser permanente board of directors costs of health services; and offer and contract for additional permannente services North Carolina Commission a and b. |
Amerigroup insurance id | Lynn Spragens, M. July 31, For example, the company required the region to repay its start-up kaisef with interest, at rates that some former KP—Carolina managers described as above market. HMOs, Competition and Government. William Brandon, Ph. |
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Kaiser permanente board of directors | KP—Carolina was one of the first alternative plans that the SHP offered, and it proved to be a popular choice. On the West Coast and in Colorado, Kaiser was strongly supported by the AFL-CIO, which liked its emphasis on comprehensive benefits and preventive medicine and demanded that employers offer Kaiser as an alternative to the traditional insurance. Email: Honeypot. Acknowledgments We gratefully acknowledge the numerous interview participants who gave generously of their time and insights, especially Dr. Each first aid station had an ambulance ready to rush patients to the prmanente field hospital if required. He was the first chairman visit web page not be a member of the Kaiser family. |
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Power member satisfaction survey for the 8 th year in a row. I think the greatest lesson is that one can never stop learning. While my career has been primarily in the healthcare arena, the specific areas are broad — I started in entertainment consulting and telecommunication project management then moved on to clinical research, laboratory management, accreditation, quality management and finally to health insurance. A wide range of experiences can offer important perspective.
And, curiosity is key. Curiosity is one of the most important qualities I look for when assessing a new hire. Simply put — it is the will to learn and know more. It has been said that people who are curious tend to make better choices. How long have you been involved with the Maryland Chamber of Commerce, and why is it an important organization to you?
I was honored when former chair, Nate Beil, asked me to join the executive team as treasurer and then as vice chair. To do that, Marylanders need to have access to great schools, great careers, great homes, and great support services. The Maryland Chamber advocates for all of these. As the only statewide business advocacy organization and the leading voice for business in the state — each year in coordination with our membership, the Chamber identifies critical issues and establishes a legislative agenda to guide our strategy and advocacy efforts at the Maryland General Assembly.
Advocacy supports policies and legislation that will grow jobs, build a robust workforce, and make Maryland more competitive. As the newly elected Board Chair, what are your priorities for the Chamber during the next two years? Several years ago, the Chamber board met to develop a strategic plan geared at building a stronger Maryland. I intend to continue supporting these efforts as well as continuing to leverage the excellent work the Chamber Foundation has done for education.
Students will gain real-world experience in an environment that embraces diversity of thought, experience and culture, and values their wellness and total health. This approach will create physicians who have the knowledge, skills and passion to lead the transformation of health care in our nation and help diverse communities thrive. Learn more at schoolofmedicine. Kaiser Permanente is committed to helping shape the future of health care.
Founded in , Kaiser Permanente has a mission to provide high-quality, affordable health care services and to improve the health of our members and the communities we serve. We currently serve more than Care for members and patients is focused on their total health and guided by their personal Permanente Medical Group physicians, specialists, and team of caregivers.
Our expert and caring medical teams are empowered and supported by industry-leading technology advances and tools for health promotion, disease prevention, state-of-the-art care delivery and world-class chronic disease management. Kaiser Permanente is dedicated to care innovations, clinical research, health education and the support of community health. For more information, go to: kp. Email: Honeypot Leave this field empty if you're human:. About Kaiser Permanente Kaiser Permanente is committed to helping shape the future of health care.
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WebFounding Dean and CEO, Kaiser Permanente Bernard J. Tyson School of Medicine. Mark A. Schuster, MD, PhD, became the Founding Dean and CEO of the new Kaiser . Board of Trustees Drew Altman, PhD President and Chief Executive Officer, KFF Drew Altman is an innovator in the world of foundations and non-profits and a leading expert on national health. WebKaiser Foundation Health Plan, Inc. Directors and Officers Kaiser Foundation Hospitals Directors and Officers The Permanente Medical Group, Inc. (TPMG) .