kaiser permanente

Kaiser Permanente is an integrated managed care organization, based in Oakland, California, founded in 1945 by industrialist Henry J. Kaiser and physician Sidney R. Garfield. Kaiser Permanente is a consortium of three distinct entities: Kaiser Foundation Health Plans, Kaiser Foundation Hospitals, and Permanente Medical Groups. As of 2006, Kaiser Permanente operates in nine states and Washington, D.C., and is the largest not-for-profit managed care organization in the United States. Kaiser Permanente has 8.5 million health plan members, 148,884 employees, 12,879 physicians, 37 medical centers, 400 medical offices, and $31.1 billion in annual operating revenues^[2]. The Hospitals and Health Plans operate under not-for-profit tax status, while the Medical Groups operate as for-profit partnerships or professional corporations.

Structure

Kaiser Permanente provides care throughout eight regions in the United States. Each of these regions comprise three co-dependent organizations. This structure has endured since Kaiser Permanente physicians and leaders agreed to this framework, known as the Tahoe Agreement, in 1955.

Kaiser is administered through eight regions:

• Northern California
• Southern California
• Colorado
• Georgia
• Hawaii
• Mid-Atlantic (vicinity of Washington, D.C. including Maryland and Virginia)
• Northwest (Northwest Oregon and Southwest Washington)
• Ohio

The three organizations which make up each regional entity are:

• Kaiser Foundation Health Plans work with employers, employees, and individual members to offer prepaid health plans. The health plans are not-for-profit and provide infrastructure for and invest in Kaiser Foundation Hospitals and for-profit medical groups.
• Kaiser Foundation Hospitals operate medical centers in three states and outpatient facilities throughout the Kaiser region. The hospital foundations are not-for-profit and primarily rely on the Kaiser Foundation Health Plans for funding. They also provide infrastructure and facilities that benefit for-profit medical groups.
• Permanente Medical Groups are partnerships of physicians, which provide and arrange for medical care for Kaiser Foundation Health Plan members in each respective region. The medical groups are for-profit partnerships or professional corporations and receive funding from Kaiser Foundation Health Plans. The first medical group, The Permanente Medical Group, formed in 1948 in Northern California.

There was a major reorganization of Kaiser Permanente in 1996 when twelve Permanente Medical Groups were unified within The Permanente Federation, which focuses on standardizing patient care and performance under one name and system of policies and The Permanente Company, which provides a central governance structure for corporate activities.^[3]

History

Early Years

The history of Kaiser Permanente dates back to 1933 at Eagle Mountain in Desert Center, California. Garfield opened the Contractors General Hospital, with twelve beds, to treat construction workers building the Los Angeles Aqueduct in the Mojave Desert. The hospital was in a precarious financial state, due in part to Garfield's desire to treat all patients regardless of ability to pay.^[4] Harold Hatch, an insurance agent, proposed that the insurance companies pay the hospital a total amount, in advance, for each worker covered. The financial relationship between the insurance companies and the hospital was efficient, and allowed Garfield to focus on a new idea: preventive health care.

Observing the concept developed by Hatch and Garfield in the Mojave Desert, Henry Kaiser persuaded Garfield to open a prepaid practice for his construction workers who, in 1938, were building the Grand Coulee Dam in Washington state. Coverage was later extended to the families of the workers. In 1942, Kaiser established health plans for workers and families at the Kaiser Shipyards in Richmond, California and Vancouver, Washington, and at a steel mill in Fontana, California. In 1945, Kaiser health plan membership was opened to the public, as membership had dropped to 11,000 following World War II. When the shipyards closed in 1946, membership dropped to 25,000, from a height of 200,000.

Post-War Growth

Between 1952 and 1955, membership grew to 500,000, as the organization worked with union leaders to extend health care to all unionized employees. In 1958, Kaiser Permanente added Hawaii to its initial three regions in Northern California, Southern California, and Oregon. Membership reached one million by 1963. In 1969, Kaiser added regions in Colorado and Ohio.

1970s

By 1976, membership reached three million. In 1977, all six of Kaiser Permanente's regions had become federally-qualified health maintenance organizations. Some believe then-President Richard Nixon specifically had Kaiser Permanente in mind when he signed the Health Maintenance Organization Act of 1973, as the organization was mentioned in an Oval Office discussion of the Act.^[5] In 1980, Kaiser acquired a non-profit group practice to create its Mid-Atlantic region, encompassing the District of Columbia, Maryland, and Virginia. In 1985, Kaiser Permanente expanded to Georgia.

Recent History

The geographic footprint of the organization has changed over time. The organization spun off or closed outposts in Texas, North Carolina, and the Northeast. In 1998, 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. In North Carolina, the Industrial Union Department of the AFL-CIO issued a 1996 report critical of the quality of the care the organization provided^{citation needed]}. Kaiser Permanente closed health plans in Charlotte and Raleigh-Durham in North Carolina four years later. The organization also sold its unprofitable Northeast division in 2000.

In 1995, Kaiser Permanente celebrated its fiftieth anniversary as a public health plan. Two years later, membership reached nine million. In 1997, 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.

Marketing

During the 1990s, the organization hired public relations firm Bain and Associates to position their brand in Washington, D.C. The organization also hired Strategic Partnerships LLC to secure^{citation needed]} tax incentives and a special hearing for government grants.

In 1999, a number of groups successfully sued Kaiser Permanente in regard to its In the Hands of Doctors advertising campaign. The lawsuit revealed that doctors at the organization were not fully in control of decision-making and that there may have been persuasion to limit care with financial bonuses. In 2004, the organization retained Campbell-Ewald to develop a $40-million-dollar ad campaign called Thrive. The campaign, which focuses on the theme of preventative care, was the first since Kaiser Permanente's In the Hands of Doctors campaign.

Quality of care

U.S. News and World Report, in its 2005 annual ranking of US commercial health plans, listed Kaiser Permanente Hawaii as 45th (out of 257 health plans), Kaiser Permanente Colorado as 55th, Kaiser Permanente Northern California as 58th, Kaiser Permanente Mid-Atlantic as 73rd, Kaiser Permanente Georgia as 81st, and Kaiser Permanente Southern California as 88th.^[6]

A 2004 Consumer Reports survey of planholders ranked Kaiser Permanente overall as average or better. It showed below average ratings in the Colorado and Mid-Atlantic regions for two measures of quality of care: 'care from doctors', and the 'quality of their primary care physician'. The same survey ranked Kaiser Permanente's Northern California region as the best HMO overall among rated plans.^[7]

In the 2006 California Healthcare Quality Report Card, Kaiser Permanente's Northern California and Southern California regions led the rankings, with each scoring six out of eight possible stars.^[8]

International Reputation

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 healthcare organisations in England.^[9][10] Visits occurred and suggestions of adopting some KP policies are currently active. 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 been admired, and given rise to trials of similar techniques in eight areas of the UK.

In 2005 a controversial British Medical Journal editorial^[11] reported a study by California-based academics which compared Kaiser to the British National Health Service.^[12] The editorial in the BMJ suggested that KP managed comparable costs to the NHS, but this generated argument mainly that American costs were in fact higher than NHS, and it was generally accepted that the NHS was cheaper and more efficient whereas Kaiser may be more rapid.

Research

Kaiser doctors and others carry out research publishing in peer-reviewed journals and in the organisation's own journal Permanente Journal.

Kaiser operates a Division of Research which in 2006 declared around 200 active studies in progress. Kaiser's bias toward prevention is reflected in the areas of interest - vaccine and genetic studies are prominent.

Edmonton-Zagreb Measles Vaccine Project

Between June 1990 and October 1991, Kaiser, along with the Los Angeles County Department of Health, Johns Hopkins University and the CDC carried out a clinical trial of the Edmonton strain of Measles vaccine. The Los Angeles arm of the trial involved 1500 (900 receiving the study treatment) mostly black and Latino babies. Other arms ran in Haiti and several African countries. The aim was to induce immunity to Measles earlier, as cases in young children had been causing alarm. The trial was ended early when increased mortality appeared in other countries. Inadequate consent had been obtained, in that parents were not informed that the vaccine, licenced in other countries and registered with the FDA as a trial medication, was unlicensed in the U.S. This raised concerns over US government department ethics, and occasioned an apology by the CDC^[13] who ascribed it to an administrative oversight.

Regulation

In California the Department of Managed Healthcare of the state government is the regulatory organisation. Other states have similar organisations.

In 2005 the DMHC reported Kaiser as being as good as any of the HMOs,^[14] and superior on preventive care.

Kaiser and federal regulation of HMOs

The organization is mentioned in an Oval Office discussion about the initiation^[15] of the Health Maintenance Organization Act of 1973. By 1977, all six of Kaiser's regions had become federally-qualified HMOs.

Violations

Kaiser has settled three cases for alleged patient dumping since 2002. During that same period, the Office of the Inspector General settled 102 cases against US Hospitals which resulted in a monetary payment to the agency ^[16][17][18]

Dispute handling

In order to contain costs, Kaiser requires agreement by planholders to submit patient malpractice claims to arbitration rather than litigating through the court system. This has triggered some discussion and dissent.^[19] Some cases proceed to court and one argument is over whether the requirement to go through dispute resolution is enforceable^{citation needed]}.

Kaiser established an Office of Independent Administrators (OIA) in 1999 to oversee the arbitration process. The degree to which this is independent has been questioned.^[20]

Wilfredo Engalla is a notable case. In 1991, Engalla died of lung cancer nearly five months after submitting a written demand for arbitration. The California Supreme Court found^[21] that Kaiser had a financial incentive to wait until after Engalla died; his spouse could recover $500,000 from Kaiser if the case was arbitrated while he was alive, but only $250,000 after he died. The Foundation for Taxpayer & Consumer Rights contends that Kaiser continues to oppose HMO arbitration reform^[22]

Patients and consumer interest groups sporadically attempt to bring lawsuits against Kaiser. Recent lawsuits include Gary Rushford's attempt to use proof of a physician lie to overturn an Arbitration decision.

Kidney transplantation

In 2004 Kaiser initiated an in-house program for kidney transplantation. Prior to opening the transplant center, Kaiser patients would generally receive transplants at medical centers associated with the University of California (UC San Francisco and UC Davis). Upon opening the transplant center, Kaiser transplant candidates in Northern California were now required to obtain services through Kaiser's own transplant center. On May 3, 2006, the LA Times published an investigative report which accused the transplant program of mismanagement which resulted in delays for patients awaiting kidneys.^[23] According to the report, Kaiser performed 56 transplants in 2005 and twice that many patients died waiting for a kidney. At other California transplant centers, more than twice as many people received kidneys than died during the same period.

On May 13, 2006 and after less than two years of operation, Kaiser announced that it would discontinue the kidney transplant program. As before, Kaiser would pay for pre-transplant care and transplants at outside hospitals. This had an effect on approximately 2000 patients.^[24][25]

In the wake of the LA Times story, two patients have filed personal injury lawsuits against Kaiser and the widow of a patient who died has filed a wrongful death claim. According to the lawyer representing the three plaintiffs, more lawsuits are planned.^[26]

References

External links

• Kaiser Permanente - Official website
• Regulatory department of California government - reports on HMOs including Kaiser
• MSNBC - "Kaiser Permanente bucks the HMO trend"
• Health Administration Responsibility Project - anti-HMO organization. Critical of Kaiser.