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KAISER PERMANENTE
THE UNAUTHORIZED TOUR
AND
DOCUMENT SUMMARY
© C. Phillips and V. Travis 2006
KAISER PERMANENTE THE UNAUTHORIZED TOUR AND DOCUMENT SUMMARY© C. Phillips and V. Travis 2006
SECOND EDITION June 2007
(Permission Granted to Copy if -C. Phillips – contact information:Cphil49401@aol.com is notified and told of probable distribution and this front page is used each time to protect the copyright)
Published by LULU.COM
Printed version published in the United States.
Second Edition
Dedication -
This book is dedicated to Adam Wesley Arnold who died on September 11, 2000. He was a typical senior and he was painfully sacrificed on the altar of HMO greed.
It is our deepest desire that all that read the contents of this book will gain knowledge,insight and perhaps avoid the experience that Mr. Arnold had to endure. It is unlikely that the public will ever be able to out fox the fox. There are too many checks, balances and retaliatory acts in place for that to be allowed. By seeing the HMO for what it actually is the public can best avoid becoming another intentionally mislabeled statistic whose sacrificial experience will only be remembered as data presented before Congress for the purpose of an HMO to either obtain grant money or another sizable health related contract.
Our reward for this effort is to make HMOs transparent so that their ability to hurt people is brought to the attention of the public. Whether the solution will come from the voters, the journalists, the politicians, the lawyers, the judges, or somewhere else, HMOs will someday be viewed as a huge step backward in health care. And those who spent decades coming up with hidden methods of withholding care from the elderly will be properly viewed as some of the most evil people ever to have lived on this earth.
Table of Contents
Section 1 - Introduction
Section 2 - SHORT SUMMARY
Section 3 - DELVING DEEPER
Section 4 -The History of Kaiser Permanente;
Section 5 - The Permanente physicians – the real power at KP – Sidney through Robbie, and now Jay;
Section 6 - Kaiser CEOs – Henry through David, and now George
Section 7 - The Kaiser Plan and Hospitals using the same Board, CEO, President, Chair man of the Board, top executive committee, tax accountant, audit firm, legal team, ad advertising, etc.;
Section 8 - Advertising Promises;
Section 9 - KP First Tag line – Permanente Medicine (rather than HMO);
Section 10 - Second Tag line – Not-for-Profit;
Section 11 - Third Tag line – Physicians Know Patients "You can do it, Dana."
Section 12 - The Permanente Map – Blueprint of Permanente (thus Kaiser also as the Enabler);
Section 13 - The Genetic Code – Permanente as a Fragile Being (competing with the patient for resource allo cation/restriction);
Section 14 - Overextending Everyone’s Training – Janitors through Physicians;
Section 15 - "Team Care" – Physician as Coach; Nurses and Pharmacists Give Primary Care;
Section 16 - Physician Recruiting – Rags to Riches;
Section 17 - Medical Malpractice Covered By the Plan;
Section 18 - Government as Kaiser’s Rich Uncle;
Section 19 - California Helps Kaiser Float $3 Billion in Bonds;
Section 20 - Beltway Relationships – White House, Congress, and Supreme Court;
Section 21 - Agencies Help Kaiser – HHS, NAS, AHRC (the "arc"), CDC;
Section 23 - Bankruptcy Case of Dr. Moses – Protecting Retirement Riches;
Section 24 - Kaiser Physician Sues Kaiser as KP Leaves Kansas City – Physician Insider’s Point of View;
Section 25 - Kaiser Permanente Ventures – Hospital and Permanente Partners;
Section 26 - Analyzing Kaiser’s 990 Form "Charity" Activity vs. IRS Intent;
Section 27 - The Kaiser Family Foundation – Not Independent of KP;
Section 28 - Controlling Universities with Money and Endowed Positions;
Section 29 - The Pill Splitting Case – "After Market" Medication Tampering;
Section 30 - Changing Lab Values Report to Congress and HARP;
Section 31 - Clinical Practice Guidelines – Cheapest Care Possible;
Section 32 – Kaiser Hospice and Nurse "Closers" – Double Morphine Syringes;
Section 33 - Patient Loses Leg at Kaiser – Poor Differential Diagnosis and Tampered Lab Testing;
Section 34 - Huge Potassium Doses and Un sterile Home Care by a "Closer" – the Vickie Travis Story about Her Dad and his death;
Section 35 - Wrong Care for Prolapsed Cord – Baby death in Oakland;
Section 36 - Wrong Care of Pre-eclampsia – Baby death in San Diego;
Section 37 - Jamie Court’s Book – Making a Killing - Too Many Infants with Paralyzed Arms (Erb’s Palsy
Babies) due to Midwife Use for Difficult Deliveries;
Section 38 - Kaiser and Employees – Missing Endometriosis and other Diagnoses;
Section 39 - Kaiser and Employees – Forcing Employees to Stay with Kaiser’s Work Comp for One Year;
Section 40 - Kaiser and Employees – Benefits (losing years of records to pay a nurse less in retirement);
Section 41 - Kaiser and Employees – Safety vs. Asbestos;
Section 42 - Kaiser and the Medical Board of California;
Section 43 - Kaiser and the California Medical Association;
Section 44 - Kaiser and the Department of Managed Health Care in California;
Section 45 - Henry Mead Kaiser - $2 million fraud – had to quit Kaiser Plan/Hospitals Board in 2004;
Section 46 - Kaiser and Dirty Endoscopy – the Hepatitis C Story.
Section 47 – Kaiser's Industrial Clinics Share Diagnoses with Employers - (e.g., Saying that one patient had al coholic hepatitis – which was actually delayed Hepatitis C for which the patient never got help and died.)
Section 48 - Conclusion
Perhaps the best introduction to the Kaiser HMO and Kaiser Permanente Medical Care Plan is the summary by Mr. Edgar Kaiser that the less Kaiser does for patients the more money it makes.
To get the full context one can go to the University of Virginia and review the presentation Mr. Edgar Kaiser (then Kaiser CEO) made to President Nixon through Mr. Ehrlichman – the less we do the more we earn. This convinced President Nixon to go forward with the HMO Act of 1973 with Kaiser as the template. The conversation is recorded below within the Nixon White House Tapes.
John D. Ehrlichman: “On the … on the health business …” President Nixon: "Yeah."
Ehrlichman: “… we have now narrowed down the vice president's problems on this thing to one issue and that is whether we should include these health maintenance organizations like Edgar Kaiser's Permanente thing. The vice president just cannot see it. We tried 15 ways from Friday to explain it to him and then help him to understand it.”He finally says, “Well, I don't think they'll work, but if the President thinks it's a good idea, I'll support him a hundred percent.’”
President Nixon: "Well, what's … what's the judgment?"
Ehrlichman: "Well, everybody else's judgment very strongly is that we go with it."
President Nixon: "All right."
Ehrlichman: "And, uh, uh, he's the one holdout that we have in the whole office."
President Nixon: "Say that I … I … I'd tell him I have doubts about it, but I think that it's, uh, now let me ask you, now you give me your judgment. You know I'm not to keen on any of these damn medical programs."
Ehrlichman: "This, uh, let me, let me tell you how I am …"
President Nixon: [Unclear.]
Ehrlichman: "This … this is a …"
President Nixon: "I don't [unclear] …"
Ehrlichman: "… private enterprise one." President Nixon: "Well, that appeals to me."
Ehrlichman: "Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because …"
President Nixon: [Unclear.]
Ehrlichman: "… the less care they give them, the more money they make."
President Nixon: "Fine." [Unclear.]
Ehrlichman: [Unclear] "… and the incentives run the right way."
President Nixon: "Not bad."
The preceding transcription is from the University of Virginia:
whitehousetapes.org/pages/listen_tapes_rmn.htm for the clearest possible presentation. Check: February 17, 1971, 5:26 pm - 5:53 pm, Oval Office Conversation 450-23. Look for: tape rmn_e450c. It is 12 MGS if using Windows Media Player
[Kaiser brags elsewhere that the HMO Act of 1973 was largely designed around its model. In many ways all of the US HMOs are Kaiser clones. Most, like Kaiser, have the hidden at risk formula whereby the physicians get a large benefit – really kickback – for every premium dollar saved (unspent).]
[Note - As many reporters, attorneys, and others would like to have a several page summary of Kaiser to get the big picture before delving into details, this Short Summary is next provided.Following that, much more detail is given. All in all, the total information available about this secretive HMO can now be turned into an encyclopedia.]
“Kaiser Permanente” is simply a for profit BUSINESS PLAN (only a concept and not a registered business entity or taxable entity) trying to be viewed by patients and the press as a not for profit "Medical Care Plan." The goal of KP is to appear to be part of the mostly medical “Mayo tribe” and not the for profit, mostly business “HCA tribe.” Though such patter is parroted as being like the Mayo Clinic and the media.
Kaiser does fail in this image attempt. Most people do correctly see Kaiser as a for profit machine with very impersonal and marginal-at-best care according to inside interviews conducted by Kaiser.
So Kaiser has to spend $40,000,000 a year in its ad Thrive campaign hiding the business agenda just to keep its membership flat. Kaiser cannot seem to get to 9 million members goal they once had, and the public is moving away from HMOs anyway. Patient autonomy of health care decision and HMOs secrecy and gatekeeper control don’t mix.
One third of the time Kaiser care is acceptable, but that is aimed at special people and meant to keep the outside inspectors confused about the two thirds of the time that the care is way below acceptable – often lethal. Kaiser has the Capacity to give care – reflected in the notebooks presented for the outside inspectors (as the latter folks look forward to the sliced beef tenderloin lunch) – but not the Will do so, as there are less profits in doing it right.
Inspectors don’t know – or don’t want to know - the difference (and I [Dr. Phillips] watched an inspection of Kaiser from the inside).
The two parts of KP are:
1) The FOR PROFIT “Permanente” physicians “Federation,”Inc. headed by Dr. Francis “Jay” Crosson, who is really in charge with Kaiser family control weakening (See Section 45), and
2) The classic "Kaiser" which includes both the Kaiser Foundation Plan and the Kaiser Hospitals - using the same CEO, President, and Chairman of the Board – Mr. George Halvorson - and the same Board members (always with a Kaiser family representative as part of the board). Might as well be the Crosson-Halvorson business plan. Huge profits are planned and achieved each year - $1.8 billion for 2004 - half to Crosson's partner shareholder physicians and the other half to Halvorson's hospitals.
Dr. Crosson – for consumption in England - describes KP as a "partnership" in the article “Kaiser Permanente: a propensity for partnership” at http:bmj.bmjjournals.com/cgi/content/full/326/7390/6547.
In his description each physician knows the “bedside and the boardroom” [read as the patient’s wishes vs. the more important business goals].
Yet, to the United States IRS, Kaiser declares the KP relationship as one of contracting agent (the Kaiser Plan) and contracting business (Permanente) at an “arm’s length separation” with real negotiating going on and NOT a partnership. This inconsistent duality is allowed by the IRS as part of government’s total refusal at every level to regulate this HMO. The IRS could always choose to revisit this relationship and confiscate $5 billion in past taxes. This is a real risk as mentioned in the prospectus for Kaiser’s bond offering.
Business principles ("the group ethic") prevail in every setting from the boardrooms in Oakland overlooking Lake Merritt to the physician offices from Maryland to Hawaii. And as all of the budgets for the various Kaiser locations across the country are prepared in and later reported back to Oakland for national budget tax presentations, the various urban expressions of Kaiser Permanente - like the Denver area - are simply "portals" of the organization, a term used by Kaiser. [The particular reference for the surprise, overnight movement of Denver mainframe IT to Oakland is found in the article “Kaiser – Shock Therapy” article on Dr. Lawrence; Denver had previously tried to be somewhat independent since they made the most profit per enrollee.] Kaiser delays its 990 year end tax form an extra six months each year – thus coming out in October –because of the complexity of handling in Oakland the tax issues for each area of Kaiser around the country. Kaiser’s representation in states is really in areas where they can achieve profit – thus cities.
In urban settings Kaiser can achieve the re quired 50,000 patient base allows the Kaiser physicians to refer internally to other Kaiser physicians for specialty care – the double gatekeeper system.
Kaiser does not really offer near to statewide service, except in much of California where 75+% of all Kaiser patients live. Kaiser buys into metropolitan areas when they expand to a new state – e.g. New York City and Washington, D.C., the latter was a buy out of a Humana plan leaving the city, and http://xnet.kp.org/permanentejournal/fal98pj/fall98pjword.html
Dr. Jay Crosson and Mr. George Halvorson work several doors away from each other on the same, 26th high rise in Oakland at 1 Kaiser Plaza. The Plaza includes a nice restaurant looking out at a large, second floor park not seen from the street. All the floors can look down on the park on one side, Golden Gate Bridge in the background or Lake Merritt on the other.
Mr. Halvorson commutes up from Alameda rather than coming down from the hills as did Dr. Lawrence. As to who is most in charge, one need only read Mr. Halvorson’s acceptance speech in coming to Kaiser and having Dr. Crosson welcome him on board. Kaiser has always had internal physician control way back to Dr. Sydney Garfield's desert clinic during the Depression (with which he made $50,000 in personal profit each year used to buy apartment buildings in Los Angeles).
Dr. Crosson’s and Mr. Halvorson’s names appear jointly on many projects, such as the switch from the IBM CIS IT system of Colorado to the EPIC IT system used by Kaiser with Oregon Health Sciences. [Kaiser’s infiltration of universities is discussed much later in Section 28.] As the two men are the co-chairs of the top executive committee at KP, when both names appear on documents it is as final as it will get.
The Plan/Hospitals board is more of a rubber stamp. Expect to find Kaiser on both sides of the negotiations with EPIC system in Wisconsin with which it now “partners.”; IBM was less likely to allow Kaiser to profit elsewhere from its CIS product. CIS was better medically – according to a past Permanente coder employee – but EPIC did a better job of billing patients (Kaiser has been transitioning back to fee for service with its co-pays).
The Permanente physician partners are paid from two sources at all times:
1) a salary of about $250,000 a year to be frugal, clinic "cost centers" dispensing limited care, and
2) then again perhaps another $250,000 a year for the KP profit of withholding the care whenever and however nearly doubled in this profit fashion so that the physician “employee” salary is merely a “draw” on total income of the same physician as a Permanente shareholder-partner. As such doubling would be highly taxed, much of the profit money is kept under the wing of the Kaiser Plan so it can be used for a Golden Retirement (where the physicians can afford real medical care for themselves and their families). Creditors cannot touch this. In a bankruptcy case of a Dr. Moses, described later in this investigation – Section 23 - a Los Angeles bankruptcy trustee sued the Kaiser orthopedist (and thus Permanente system of money protection) and lost. The trustee was neither able to get a total figure of the money held for Dr. Moses nor to get that money joined in his other debts. He did get close enough to call it a millionaire’s pension; this money accumulates for care withheld.Pill splitting (see Section 29), the changing of normal lab values (see Section 30), under reading cardiac stress tests, missing cancer until it is "too late" and then forcing patients into hospice care, channeling people into fibromyalgia and then undermining their self esteem, trying to convince all chronic patients that they all have a similar disease which is handled best by staying home and eating fruits and vegetables, blaming all illness on life style, etc. give witness to the lack of ethics on the way to conniving on how to spend less. All of this is the opposite of the "superior" care label and caring physician ethic painted by the "Thrive" ad campaigns. How does one "Thrive"with less care?
National Kaiser HMO care is organized by the Care Management Institute (CMI) in Oakland – developed in 1997 at a brief time of no profits for KP, financed by the Kaiser Plan (as if it is non-profit educational adventure), and run by the Permanente physicians for its real profit purpose. The organizational survival plan – a patient - unfriendly plan – is to first defining all care into cheap "evidence" packages (see section 31) and then "making the right thing easier to do" at the front line, provider office. Independent thinking physicians in Kaiser will only find that giving care different from the Oakland hints will cost them so much extra office time explaining that they will be called non-productive or "not manage care suitable." "Kaiserizing" physicians (medical ethic bending) and "Kaiserizing" patients (care expectation reduction) is part of the KP HMO process.
KP is the corporate practice of medicine - from the skyline of Oakland – which is completely illegal in every state and fraudulent to every patient. In the Hippocratic tradition the physician can only be the patient’s advocate if able to practice with an independent license making ethical decisions. The CMI’s financing is also fraudulent – coming from the Plan and the Hospitals as if a public "education," charitable service(though the principle output of "evidence" protocols is secret).Mr. Halvorson specifically made the already suspect "charity" of the Kaiser Plan and Hospitals even more business related – supporting CMI "evidence" work, educating future Kaiser physicians, paying for lobbying of Congress, etc. Lobbying is deducted as an educational effort.
Patient fundamental rights are also compromised at Kaiser facilities, particularly in the most important right – to know one’s true diagnosis in lay terms bringing the patient equal with the physician so that real options can be weighted and the patient preserves decision autonomy. Without that there is almost never any really informed consent. One can almost measure the ethics of a hospital by how hard it is to find the patient’s rights paper required to be on the wall by the Joint Commission.
In one Kaiser hospital this paper is behind a waiting room chair in X-ray where no one can read it without standing on the toes of a patient to get an X-ray. This is consistent with the attitude by which Kaiser calls patients "external customers" – the dangerous business model that does not fit medicine.
In pictorial documents Kaiser draws its "external customers" (patients) as droopy and boring (most not needing to be there anyway); staff is then pictured as bright and professional – a narcissistic ego trip of its own.
Then, when the care comes out wrong and incompetent, the records display tampering, risk management which makes government expert review all but impossible – e.g. a female necklace appearing on a shoulder x-ray on a male patient who has never had a necklace. How much tampering is done by the original physician (who gets the chart first), a specialist partner or Kaiser’s legal team (who next gets the chart) is unclear; medical records technicians state that the copying is not the same as copying charts for other doctors. Once altered, the chart is then given to an outside copying company to make it look like recipients are dealing with an original.
The methods of tampering include removing material, wrong patient material, copying too small, rearranging pages, lack of pagination forcing cut and paste to reassemble, copying light, copying so signatures and training won’t show up (nurses making insulin decisions), etc. [In the medical legal area, every Kaiser chart I have reviewed reflected serious tampering – CP.]
Perhaps a decade ago, the California Supreme Court castigated Kaiser for its unfair malpractice, arbitration system (See Engalla v. Kaiser on HARP.org.) The "Blue Ribbon Committee" chosen by CEO Dr. Lawrence – with a few judges on board but still Kaiser empathetic, recommended inside the report that both the Kaiser attorney and the patient’s attorney get the same records at the same time. That recommendation was mysteriously dropped in the final version and has never been followed!!!Little was done except to have an "independent" legal office run the arbitration system; the head of this office then testified in Sacramento as to how well it was working (consumer groups appropriately complained). Add in forced arbitration with judges who become dependent on Kaiser income – an average of three $15,000 cases a year supplementing their incomes – and the system provides absolute power back to the HMO. Absolute power leads to absolute corruption (an old phrase restated by President Kennedy at Amherst College on the dedication of the Robert Frost Library where I, Dr. Phillips, was simply a premed usher). Kaiser does not mind violating the ethic of talking to the judges on the side as well – see San Diego arbitration case that Kaiser won (Section 38 – baby dies).
There are almost no voices of dissent left to give a balanced view (second opinion) of Kaiser, making some call California the sarcastic name "Kaiserfornia." The nurses are silenced as benefits partners – the California Nursing Association removing from its website a very long list of Kaiser faults. The unions become "partners" in profit – increase to officers and silenced employees.The regulators are afraid of the size and political influence of the HMO – a $30 billion corporation (parallel in size and finances to the VA) using "charity" funds to lobby politicians, e.g. joining the Governor on pet initiative projects.
The newspapers and radio shows appreciate receiving portions of and thus are silenced by the $40,000,000 a year ad campaigns - the latest called Thrive (now even part of the KP logo). They do not even check the basic message lies – KP as nonprofit, physicians who will get to know you and advocate for you, trust in us (regardless of lifestyle), etc. And the public does not understand that the Broccoli ad is really about staying home with your illness – all sickness at Kaiser becomes a Broccoli deficiency.
So there is no "fourth estate" check and balance by the media, the first three "estates" being the three parts of government. When a reporter does get curious, he or she is distracted by having a sudden, invited, private interview (scoop) with the CEO of Kaiser – looking out the windows on the 26th floor - as to his future visions that he called "Blue Sky" (everyone stays home and care is conducted with the computer). This happened to the reporter from USA Today who broke pill splitting and the reporter from the San Francisco Business paper who was getting close to asking if the docs got part of the profit (CEO Halvorson was vague on this).
Trial lawyers find the record tampering and verdict financial ceilings too restrictive to permit the cost of expert review, so there are far too few cases for the number injured at Kaiser. [Many Kaiser patients stop at the point that they must "DEMAND" arbitration; that plays against the assertiveness of patients who simply WANT fair compensation for incompetence and error.] And so, the public only gets the spoon fed glories in canned news releases; only hurt patients or their families know the reality and the lack of justice. [Few attorneys try to sue Permanente – but IPAs are NOT protected by California’s MICRA caps.] Finally, in its public 990 tax forms – required by the government - Kaiser magnifies its IRS required obligation (to avoid taxes) back to the public as if it is raining presents on the public. In fact, a good deal of its obligation is spent internally on pet and secret projects, the latter including "evidenced based medicine" pamphlets which are so corrupt that Kaiser won’t show them to outside physicians.
[Now, for the next level of detail the reader must take time to see the near to full unveiling of Kaiser. There one can go on to look at the realities of care to perhaps see the Grand Canyon difference between the ad promise and the reality show.]
The order of topics will be: Section 4 – The History of Kaiser Permanente; Section 5 – The Permanente physicians – the real power at KP – Sidney through Robbie, and now Jay; Section 6 – Kaiser CEOs – Henry through David, and now George Section 7 - The Kaiser Plan and Hospitals using the same Board, CEO, President, Chairman of the Board, top executive committee, tax accountant, audit firm, legal team, advertising, etc.; Section 8 – Advertising Promises; Section 9 – KP First Tag line – Permanente Medicine (rather than HMO); Section 10 – Second Tag line – Not-for-Profit; Section 11 – Third Tag line – Physicians Know Patients "You can do it, Dana." Section 12 – The Permanente Map – Blueprint of Permanente (thus Kaiser also as the Enabler); Section 13 – The Genetic Code – Permanente as a Fragile Being (competing with the patient for resource allocation/restriction); Section 14 – Overextending Everyone’s Training – Janitors through Physicians; Section 15 – "Team Care" – Physician as Coach; Nurses and Pharmacists Give Primary Care; Section 16 – Physician Recruiting – Rags to Riches; Section 17 – Medical Malpractice Covered By the Plan; Section 18 – Government as Kaiser’s Rich Uncle; Section 19 – California Helps Kaiser Float $3 Billion in Bonds; Section 20 – Beltway Relationships – White House, Congress, and Supreme Court; Section 21 – Agencies Help Kaiser – HHS, NAS, AHRC (the "arc"), CDC; Section 3 Section 22 – Shadow Government Agencies Help – The Forum, G-7, the Robert Johnson Foundation, EPCs in Oregon and North Carolina, etc.; Section 23 – Bankruptcy Case of Dr. Moses – Protecting Retirement Riches; Section 24 – Kaiser Physician Sues Kaiser as KP Leaves Kansas City – Physician Insider’s Point of View; Section 25 – Kaiser Permanente Ventures – Hospital and Permanente Partners; Section 26 - Analyzing Kaiser’s 990 Form "Charity" Activity vs. IRS Intent; Section 27 – The Kaiser Family Foundation – Not Independent of KP; Section 28 – Controlling Universities with Money and Endowed Positions; Section 29 – The Pill Splitting Case – "After Market" Medication Tampering; Section 30 – Changing Lab Values Report to Congress and HARP; Section 31 – Clinical Practice Guidelines – Cheapest Care Possible; Section 32. –Kaiser Hospice and Nurse "Closers" – Double Morphine Syringes; Section 33 - Patient Loses Leg at Kaiser – Poor Differential Diagnosis and Tampered Lab Testing; Section 34 – Huge Potassium Doses and Un-sterile Home Care by a "Closer" – the Vickie Travis Story about Her Dad and his death; Section 35 – Wrong Care for Prolapsed Cord – Baby death in Oakland; Section 36 – Wrong Care of Pre-eclampsia – Baby death in San Diego; Section 37 – Jamie Court’s Book – Making a Killing -Too Many Infants with Paralyzed Arms (Erb’s Palsy Babies) due to Midwife Use for Difficult Deliveries; Section 38 – Kaiser and Employees – Missing Endometriosis and other Diagnoses; Section 39 – Kaiser and Employees – Forcing Employees to Stay with Kaiser’s Work Comp for One Year; Section 40 – Kaiser and Employees – Benefits (losing years of records to pay a nurse less in retirement); Section 41 – Kaiser and Employees – Safety vs. Asbestos; Section 42 – Kaiser and the Medical Board of California; Section 43 – Kaiser and the California Medical Association; Section 44 – Kaiser and the Department of Managed Health Care in California; Section 45 – Henry Mead Kaiser - $2 million fraud – had to quit Kaiser Plan/Hospitals Board in 2004; Section 46 – Kaiser and Dirty Endoscopy – the Hepatitis C Story. Section 47 – Kaiser’s Industrial Clinics Share Diagnoses with Employers – (e.g., Saying that one patient had alcoholic hepatitis – which was actually delayed Hepatitis C for which the patient never got help and died. Section 48 – Conclusion.
Everyone will have decide to what level of information it is that they want to pursue in understanding this huge HMO, a $25 billion corporation and a national HMO player since for over two decades. Transparency is the only chance for change.
Section 4. HISTORY OF KAISER PERMANENTE – Sydney and Henry
A. Sidney Roy Garfield, MD, still called "The Founder" was the son of parents who were born in Russia – changing their New York City name to Garfield;
B. The family business was selling clothes in New York; the family moved to Los Angeles in 1938;
D. Sidney was more interested in engineering than medicine but fulfilled the family expectation to become a doctor; [engineering might have been the better choice for him to take for the out come of millions of patients, but even there he has problems – he forgot in designing the Hawaii Kaiser hospital with visitor corridors on outside that there were typhoons (hurricanes in the Atlantic ward)];
A. Sidney applied to go to medical school at the end of his sophomore year; only one medical school of four accepted him – the University of Iowa; he got his medical degree in 1928;
B. He did his internship in Chicago and then switched to a surgical resident at the county hospi tal in Los Angeles;
C. When graduating from UCLA School of Medicine and Surgery Residency, there were few open practices in the middle of the Depression, except to the best graduates; however, there was a job out on the desert for taking care of those working on the Los Angeles Aqueduct Project to bring water from the Colorado River;
D. Soon Dr. Garfield realized that he did not want to be an employee physician but would rather be an owner and contract for the service;
E. He borrowed money from his father and others and opened his own $50,000 "Contractors’ Hospital," the loyalty of which to business was never in doubt; he wanted "pre payment" since "the one who pays the bills control the service." (Smillie book page 8)
F. He developed prepayment with the "San Francisco Exchange" of large project con tractors –Bechtel, Kaiser, and others; this was the beginning of what would develop into Kaiser enterprises and Garfield Physicians, finally into KP when tax changes were re quired to protect prof-its;
G. As to the desert practice, "… Sydney Garfield retained earnings from the 5-year period [1933-1938] of $250,000. It was an astonishing sum in 1938 when the average annual American in come,excluding those on relief, was $1350." [Smillie book – page 18
H. Later Dr. Garfield was asked to do the same for the dams going up in Washington and Oregon; the relationship with the Kaiser family became much closer;
I. Finally, in World War Two the US set up shipbuilding for England’s insatiable (and later our) need for Liberty ships (one a day); Mr. Kaiser took on the challenge – although not a shipbuilder – and Dr. Garfield tended to the employees, often 4F (with health problems) and unable to go to war;
J. In the book Mr. Kaiser Goes to Washington one can read about Henry Kaiser, Sr. making money off the government – "The Rise of a Government Entrepreneur" – Kaiser has always been about solving government problems where after Kaiser’s methods were not regulated;
K. After the war the US government turned over the Kaiser clinics with little charge to the prepaid health system, one of the many ways the government built Kaiser up;
L. The shipyard towns of the West Coast became and still are strongholds for Kaiser, 75% of the patients always being from California;
M. The State of California has always helped Kaiser to grow and flourish, like no other state;
N. Henry Kaiser, Sr. and Dr. Sydney Garfield ran the medical organization like a father- son team, Mr. Kaiser did external relations and co-signed Bank of America funding while Dr. Garfield ran the physicians and hospitals on the inside;
O. It was a workable duality, and they even became neighbors in Lafayette, California, as they married sisters: "Sidney and Helen Garfield moved next door to Henry J. and Alyce Kaiser in Lafayette. Garfield and Kaiser were now brothers in- law, married to sisters who were extremely close to each other, visiting back and forth every day. In the evenings, the two couples would gather for cocktails and conversations. Sydney Garfield was now the brother-in-law, physician, and close personal confidant of Henry J. Kaiser." (Smillie book page 111)
P. Later the other physicians thought it was all too comfy – particularly when the two men developed Walnut Creek Kaiser Hospital without asking the others.
Q. For decades all of the Kaiser industries were beholding to Mr. Kaiser, Sr., and Dr. Garfield was the employer of all of the physicians; profits were likely split up 50-50% - the Bechtel-Kaiser approach – but have never been published; [Dr Garfield’s ownership of apartment buildings could be a good place to start].
R. At one point the Kaiser Family Foundation split off with a $50,000,000 endowment; of ten they have bailed Kaiser out (e. g. Michigan) but try to appear on the web to have no history and no relationship to KP (see Section 27);
S. In fact, KFF has handy professor chairs at universities who coincidentally always sup port Kaiser in articles – Stanford and Harvard public health departments and/or out comes research units, like Duke and Oregon Health Sciences (see Section 28);
T. One interesting connection is that KFF pays Harvard to conduct health polls and then pays the Washington Times to run the polls, to give KFF a national voice in health care (also Section 28);
U. Sidney Garfield always managed to be part of the profit system; and as the Founder, he taught many ideas [few that patients know or would like]:
1. He had a "pencil stub club" making sure that no one got a new pencil until the first was a stub; he expected the same of hospital equipment;
2. He created the idea of the "economy of shortages" whereby you could under-finance an area and see what creativity or harm developed;
3. In 1960 he talked about "New methods of providing health care as opposed to sick care must be tested."
5. In 1967 it became more clear to the Permanente physicians that the patients should be responsible for their own health – not KP. "… Kaiser-Permanente helped pioneer a shift of consciousness that would become fully evident by the 1980s when health was no longer envisioned as something that doctors gave patients, but as something that healthy members maintained for themselves through a healthy lifestyle." (Smillie book p. 210.) [The shift in consciousness was internal as the ads still promise to this day a high level of trust – "we’ve always been there for you."]
V. The federal government always helped Kaiser. For example, when Nixon established wage and price control, Kaiser was allowed to escape – the doctors were only "providers" not employees.
W. Later Kaiser was exempted from the dreaded HSA certificates of need, so that they could build whatever they wanted without a certificate of need;
X. Years earlier Henry Kaiser Sr. said that the best place to start the tour of his shipbuilding was back in Washington, DC where all the deals were made (read Mr. Kaiser Goes to Washington – although the Kaiser family cooperated it was not an altogether complimentary book).
Y. By 1952 Permanente was starting to envision itself as an organism at risk – really vying with the patient for sustaining resources – and developed its own "Genetic Code" (Garfield actually started the "genetic code" concept during speeches in 1945) – Smillie Book 99- 101 [my comments and additions in brackets like this]:
1. "prepayment" [which meant patients had to trust the physicians];
2. "group practice" [sustaining the group was key and having both primary and specialist gatekeepers controlled costs];
3. "adequate facilities" [yet Dr. Garfield also said "If you don’t have enough beds in a hospital, you are going to use them more perfectly" (page 74 – Smillie)];
4. and "a new economy of medicine" – [really blaming patient lifestyle on almost all illnesses and reducing benefits in the process];
5. voluntary enrollment with dual choices [Kaiser decided that its closed staff model did not allow real choice. Patients should always have another plan from which to choose. Later, this was dropped as a federal requirement and as an ethical idea. Many workers now have only one choice and that is Kaiser (this even happened to me in 2003).
6. See more discussion in Section 13.
E. THE TAHOE [ONE] AGREEMENT –
The Tahoe One Agreement is listed by Mr. Paul Wallace of Kaiser in his power point slide history - "Making the Right Thing Easier to Do" -as a key moment in Kaiser’s history. Original Kaiser materials may be found in the Kaiser Collection in the Bancroft Library materials and UC Berkeley [plan to spend many hours to get a few documents as librarians watch that no papers are removed or harmed – which is good, CP]; some of the documents are also available on the kaiserpapers.com.
Preceding events – Walnut Creek Kaiser, Hawaii Kaiser, the Permanente responses – power plays back and forth [See "Toward the Tahoe Agreement p. 121-142 in Dr. Smillie’s book];
1.The meeting at the Kaiser home at Lake Tahoe in which Henry Kaiser, Sr. hoped to use water skiing and barbecues at his home to soften the physician; but that did not work [See full chapter in Smillie’s book – called "The Tahoe Agreement" p. 143-174 – 31 pages and the longest chapter]
2. Serious contest of wills in this new business "partnership;"
3. It is all about the outcomes of sharing power 50:50 and sharing profit 50:50.
4. Author Smillie went on to describe the minor variations since;
5. [Physicians have an agreement with Permanente which sometimes shows up in court cases; the special 50:50 paper is more rarely seen – see Section 24 – "Article K" – all ten pages]
6. Original signatures on the Working Council split can be found in the Bancroft Library or at the kaiserpapers.com; both Henry Kaiser and Sidney Garfield signed [and also married sisters and lived next door to each other in Lafayette, California].
DD. This profit sharing is also found in Dr. Raymond Kay’s in Historical Review of Southern California Permanente Medical Group (Kay’s book p. 43). The signatorts are typed out clearly in the back of the book.
EE. "TAHOE TWO" – ALSO KNOWN AS THE RECOVERY PLAN FOR 2001
The Balanced Budget Act of 1997 – which ended up pulling out some $300 billion fromthe hospital industry - was already expected by 1996. The managed care industry took a nose dive in lockstep in 1997 (source The Bleeding Edge page 35) just as many small hospitals also came up short and closed. For Kaiser this touched off two years of loss of profit, something that had not happened before or after in its sixty year history. There was cross blaming between the Permanente groups and the leaders of the Plan/Hospitals. Out of this clash Permanente became particularly stronger. The new plan was called the Recovery Plan for 2001, which was really an attempt to not only go back into the black but to recover the lost profits as well. (It is also called Tahoe II.)
The changes included all of the following and more:
1. The Permanente Groups, then headed by the largest TPMG under plastic surgeon Dr. Robert Pearl (internally "Robbie" – a plastic surgeon), were reconstituted into the Permanente Federation with pediatrician Dr. Frances "Jay" Crosson in charge (also a TPMG physician), the latter with Kaiser from 1977 until now (some 28 years);
2. [Pediatricians are often promoted to high levels in Permanente because they have an easy time with the concept of withholding adult critical and cancer care and doing better on HEDIS scoring, like immunizations. The image that pediatricians are generally the nicest among physicians has to be rethought.]
3. The Federation also developed its business arm, the PERMCO – the Permanente Company – to handle venture projects, e. g. Caretouch, a dialysis consultant role, etc. (See Section 25)
4. Dr. Crosson and then CEO, Dr. David McKinnon Lawrence, were made co-chairman of the National Partnership Group, the top executive committee in KP – handling all issues going to and from the (less powerful) Board; Mr. Halvorson stepped into this role as the new CEO, with Dr. Lawrence becoming a Board member as "Chairman Emeritus";
5. "Permanente Medicine: the Path to a Sustainable Future" article by Francis J. Crosson, MD about Kaiser published in the Permanente Journal. The Permanente Journal explains a lot. Dr. Crosson co-chairs the "National Partnership Group" with Mr. Halvorson - "a joint body at the national level, to determine KP's national strategy for the future" It is also the "top executive committee" at KP. The formation of the committee is part of "Tahoe Two."
6. More can be found on the National Partnership Group at http://www.gao.gov/medpac04.pdf. This also includes Dr. Goldsmith's bio describing the Kaiser Permanente Partnership Group (KPPG) as the "highest decision and policy-making body in Kaiser Permanente." Dr. Goldsmith was until 2004 the Medical Director, Southern California Permanente Medical Group.
7. The physicians agreed to practice with more uniformity and less variation through the creation of the Care Management Institute – funded by the Plan and run by the physicians; the CMI became in charge of the developments of "evidenced-based medicine," really a step down, cheaper version of the national standards coming out of the specialty societies.
A. the American Heart Association wants every patient with chest pain – who might be a possible heart attack – to have oxygen; Kaiser does not think this is necessary;
B. the American Diabetic Association feels that sedentary patients (really couch potatoes) should be checked for diabetes; Kaiser does not think that is necessary.
C. the national standard is some nine OB visits in a pregnancy; Kaiser believes that can be done with six visits;
D. and this is the tone of the many documents presented as outpatient or inpatient science.
8. Kaiser, according to the Recovery Plan, would also develop a massive IT (information technology) effort such that there would be pop-ups in front of each physician telling him or her what to do;
9. This IT is described as costing $3 billion, although $1 billion was wasted on the IBM CIS program highlighted as the state of the art in Colorado;
A. as much of the system is simply imported from Wisconsin through the EPIC company, the cost is inflated by adding in the time needed to train all Kaiser staff;
B. the figure was to be over 10 years, so the yearly cost was not so huge;
C. the number looks large enough to steer anyone away from the idea that profits were being made each year;
D. EPIC trainers from Wisconsin recall going into Colorado and having to almost start from scratch; about the same time Kaiser was testifying in Washington that it had all but conquered IT problems and the Electronic Medical Record from all its experience back to the 1968 years of Multiphase Testing.
10. Meanwhile, with knowledge so codified, physicians could move away from patients as coaches and convince the same patients that they had more access through the care "teams" taking their places; patients experienced more contact though not understanding that it was less expertise, e. g. a pharmacist whose goal was to talk the patient out of Prilosec and back to the weaker Zantac.
11. Kaiser agreed to go into more venture projects partnering with Permanente at the 50:50 level once again; often the trick was to pour Kaiser IT at a value of $14 million into a business like Caretouch and then spin it off with Dr. Lawrence "still on board";
12. The profit split of 50:50 as well as the presence of the physicians in the boardrooms as decisions were made – really simply rubber stamped made sure the Kaiser executives and the Permanente physicians were partners at every level – one for all and all for one.
13. The new plan included taxing the Kansas City and North Carolina Kaiser units to prop up the Washington, DC showcase unit and then close the former two as not viable; excellent materials on this show up in the Johnson County Courthouse on the Western side of Kansas City (see materials on kaiserpapers.com (in Section 24);
14. The Permanente Journal was also started as an improvement of a newsletter in the Northwest. It is published in Oregon but vetted in Oakland – legally and medically. It is the national communication system for the Kaiser physicians – with medical articles featured on the cover and then cost saving measures filling half of the interior. MUCH information can be obtained from these public magazines – now almost completing 10 years at 4 magazines per year. The nurses now get it since they are care givers (Beyond scope of diagnostic practice.)
This all is referred to as the TAHOE TWO agreement because it renegotiates the power of Permanente v. Kaiser, this time with a stronger physician power role and the same 50% profit sharing;
Later Dr. Lawrence was actually further demoted in power as he made a raid in Denver and grabbed all the IT equipment and staff to centralize IT; the physicians had no warning and it reminded them of the Kaiser Sr. tactics before.
Section 5 – THE PERMANENTE PHYSICIANS – ONLY A " PERCENT PROFIT"
For a while I, Dr. Phillips, was stumped by the Permanente statement to Medicare in 1984 that they only made "5% profit" against my calculations that the profits were as much as a doubling of salary for each senior partner physician. I finally figured it out – Permanente represents half the KP budget (rather than the usual 20% of most systems). Permanente pays for clinic leasing, lots of the personnel, and the physicians. A 5% profit of the whole Permanente cost center of 50% allows for doubling of the physician partner income.
In 2005, Kaiser is trying to create an 8% organizational profit ("excess income") of $2 billion against the total of $25 billion budget. Early results will be announced in February of 2006 to kick off the bond market auction in New York (and organize the profit split to Permanente), and final results to be posted on 990 tax forms in November 2006]. Half of the budget involves Permanente and so does half of the profit.
So a $1 billion profit will go to Permanente who I estimate to have 3000 of the 10,000 physicians as partners. If $100 million is used to give bonuses to nurses, techs, union bosses, etc. there would still be $900,000,000 to split among 3000 partners $300,000 each (a doubling of their base salary). Yet Permanente could say to Medicare then and now – that we (Permanente) only make a "5% profit," so what is the harm? After all, you require us to include physicians as part of the risk. But then the Plan and occasionally the Kaiser Family picks up physician shortfalls by the IRS settlement, Permanente is really not ever at serious risk.
Other ideas to be added to this section:
2. "… the individual physician was the profit center" (Smillie 76);
3. "Physicians who created more than their share of unnecessary expenses through the poor quality of their treatment were encouraged to leave the Medical Group (Smillie 177) [this is really about physicians who give out the right care are managed care unsuitable];
4. Outside expenses hurt the profit line, so if they stay with urban areas and get at least 50,000 patients from startup buy-outs, then almost all specialty referrals can be internal – two layers of gate keeping;
5. The physicians get benchmarking materials in the mail with each check (every two weeks) that shows where they stand as a business unit, e.g. pharmacy utilization;
6. Physicians have 15 minutes for most all visits, although the number is rarely published;
7. Test interpretation should not include words like borderline – it’s either clearly positive or negative; (this deprives patients of information)
8. Physicians can receive "Talking Points" quickly so that they can write ‘Letters to the Editor’ whenever there is a KP brand embarrassment;
9. Physicians have the dues paid by the Plan to join medical societies so that they can rise to the top – one recent President of the California Medical Society was a Kaiser emergency physician; it helps to have the voting power to get him there;
10. The Medical Board of California uses a disproportionate number of Kaiser experts to evaluate care; it is likely that Kaiser allows double dipping for this time spent – a Kaiser administrative salary and a Medical Board payment;
11. The physicians heading up IT have no problem bragging to Congress that Kaiser has always been on the frontier if Information Technology even as Kaiser buys a brand new system EPIC and has to learn from scratch; government does not go back and check Kaiser;
12. Those physicians with the best business record – supporting Permanente more than patients – rise to the top; the message back down is that business comes first and every doctor is being constantly audited for every decision;
14. Physicians in deposition or the courtroom are instructed to say that they do not know what Kaiser Permanente really is – thus never getting into the profit systems they all really understand;
15. The Guidelines the physicians develop are not from science but from profit motive, e. g. "do not test sedentary patients for diabetes";
Section 6 - KAISER’S CEOs SIDNEY, …, DAVID, AND GEORGE
For a long time Mr. Kaiser was the external director and Dr. Garfield the internal director of what was to become KP;
A. In the beginning, Dr. Sydney Roy Garfield, was the CEO of Kaiser and that continued for a long time. Mr. Henry Kaiser, Sr. had equal control, though, as he had to cosign the Bank of America loans needed to build clinics and hospitals. They split profits 50:50.
B. As the war ended in 1945 and the suddenly smaller organization decided to go public, Eugene Trefethen – a close confidant of Mr. Kaiser – was asked to run the Permanente Health Plan, a non-profit trust; but Dr Garfield really operated the medical groups, the Health Plan "as a single organizational unit." (Smillie book page 62); C. From 1945 - 1948 the board rarely met. "The actual management of the health plan might be envisioned as a circle with Sidney Garfield at the center." (Smillie – p.65); D. In 1948 Dr. Garfield had to separate from the Permanente doctors for tax reasons; but still had major control as plan and hospitals chief:E. Mr. Kaiser and Dr. Garfield finally agreed that Dr. Clifford Keen should head the program starting in January of 1954; the Permanente physicians were skeptical;
F. Dr. Keene developed a Kaiser Foundation Research Institute at the Richmond Hospital because he felt it would felt "respectability" for the Kaiser organization would be gained (Smillie p. 129); [Kaiser is now the largest nonacademic "research" unit in the United States with lots of CDC money pouring in.]; (it's hospital libraries are some of the worst.)
G. Meanwhile, Henry Kaiser kept calling each of the new hospitals "My Baby" suggesting he still thought he was running the show as the Boss;
H. When Henry Kaiser told a subcommittee of Congress that the physicians are entirely independent of lay or corporate control, the Permanente physicians wrote back to Congress to correct the error; [this issue plays out to this day – as Kaiser ads try to make the physicians look as if unimpeded in their decisions, the opposite being true];
H. For a number of years Edgar Kaiser was president of the Kaiser Foundation and Hospitals – that would have matched his meeting with Mr. Ehrlichman in the White House (See introduction); he retired in 1980 and died in 1981;
I. James A. Vohs replaced Edgar Kaiser in 1980;J. Dr. Lawrence was CEO for about 10 years – bringing in FNPs to do MD work:
1. He went to Amherst College [so we shared the same campus and premed program one year apart]; then on to Medical School at the University of Kentucky;
2. He interned in Kentucky;
3. It is not clear if he had direct patient care after internship, although there was a Peace Corps stint which landed him back in Washington, DC;
4. Then he did his residency in Public Health at Johns Hopkins University;
5. He finished his residency out at the University of Washington in the State of Washington;
6. There he became involved in the fairly new concept that part of what physicians do could be done by a mid-level provider;
7. This training cutting and cost cutting idea brought him some fame; (The courses are for rural care, but most physicians stay in the city.)
8. He next became the Physician in Chief in a Kaiser unit in Portland Oregon. After that he was the PIC in Colorado;
9. Finally, he was tapped to come to Oakland;
10. There he climbed up the ladder first as CEO, then President, and then Chairman of the Board – finally all three, then, at the same time (as he achieved increasing power);
11. In his final year, where he was paid full salary to tutor Mr. Halvorson, he clearly was not needed;
12. Instead, he secluded himself in Oregon and wrote a book trying to validate Kaiser’s team approach to Asthma (to counter the claim in the movie "As Good As It Gets" through actress Helen Hunt that HMOs don’t give good care to childhood asthmatics – movie audiences clapped around the country in agreement). 13. Dr. David McKinnon Lawrence, then, with minimal direct patient care experience,headed up KP; he made the following imprint: A. That from 1992-1996 he could solve most of Kaiser’s problems through lots of contracting at the top and being business tough at the front line;
B. That he could help Kaiser by being involved in tours with advance teams that played up his being a member of the National Academy of Science [for what?];
C. That he could castigate the Dr. Welby type of physician as an eagle soaring over the canyons of the past, irrelevant to today; that as a physician he could represent both sides of KP;
14. But the Balanced Budget Act of 1996 brought Kaiser like the rest of managed care to budget losses; the physicians were unhappy with the relationships and pushed for more power (Tahoe II);15. Suddenly, Dr. Lawrence was pictured among a group of Permanente physicians to give proof that he was now demoted and equal to them. (See elsewhere Tahoe II to see all of the changes made;)
16. Suddenly he was in charge of the increasingly tough-on-patients "Path to Recovery 2001;"
17. Although this succeeded (profits returned), Permanente believes it was due to their taking a stronger role;
18. Finally, Dr. Lawrence lost power after removing from Colorado Kaiser in Denver their mainframe computer without telling the docs first;
19. Permanente was resolved to have a nonphysician as the next CEO. (probably forever after);
20. Dr. Lawrence vowed to stay out of medicine in his retirement but has been working with England on importing Kaiser’s tough rules that keep patients out of hospitals or move them through double fast;
21. Mr. George Halvorson from Minnesota became the next CEO. He was then running an HMO of about 1,000,000 subscribers but had been considered successful (keeping costs low) and a national player with the Association of Health Plans. His actions so far:
A) he made it clear that he did not need much tutoring from Dr. Lawrence, the latter becoming redundant for his last year;
B) he changed Kaiser from the IBM/CIS program in Denver to the Wisconsin EPIC program developed in Kaiser in Oregon;
C) this was done because it was easier to partner with EPIC (end up on both sides of the table) and EPIC was better for patient billing than IBM;D) he thus tossed out a $1 billion IT effort that will still be kept as part of the $3 billion cost of EMR (electronic medical records);
E) EPIC stands for embedded pop-ups, and Kaiser achieved its goal of having pop-up suggestions on every front line computer so Oakland could run the care of all 8 million patients;
F) This is consistent with the "Permanente Patient Relationship" we will find within the Permanente Map (Section 12); as the corporate practice of medicine is inconsistent with the Hippocratic style of personal physician advocacy for the patient, it is illegal in all states;
G) The pop-ups force every Kaiser physician to "do the right thing" or lose time trying to ex- plain why not, the latter not a choice as it would trigger inefficiency and be degraded at the next, secret partners meeting;
H) The pop-ups had been developed by a joint study of Kaiser and the Oregon Health Science University using Kaiser partner physicians to see how they could be gradually molded to accept this approach.
I) Mr. Halvorson has decided – differently from Dr. Lawrence – that long term power will come from truly giving Dr. Jay Crosson 51% of the power (thus to the Permanente Federation);
J) He also decided that Kaiser’s charity monies should feed back into the organizational goals of the HMO and thus be used for developing secret guidelines, lobbying in Sacramento and Washington, DC, as a "public education" effort, funding the train ing of physicians who may well be recruited for Kaiser, etc.; [the IRS hasn’t looked carefully at Kaiser for decades];22) As with Dr. Lawrence, Mr. Halvorson’s salary each year (of over a million dollars) can be expected to be doubled with bonuses as the profits role in; he can be rewarded as the CEO of the Plan and then as the CEO of the Hospitals;
23) And, thus, as part of Tahoe Two, Mr. Halvorson and Dr. Crosson have co-chair-spots on the top executive committee with Dr. Crosson being more senior and in charge; yet HMOs like to take the heat as Bad Cops so the physicians can come up looking like the Good Cops.
Section 7 - THE KAISER PLAN AND HOSPITALS using the same BOARD, CEO, PRESIDENT, CHAIRMAN OF HE BOARD, PRESIDENT, CHAIRMAN OF THE BOARD, TOP EXECUTIVE COMMITTEE, TAX ACCOUNTANT, AUDIT FIRM, LEGAL TEAM, ADVERTISING, ETC.
1) As discussed under the history of the various units of Kaiser, Dr. Sydney Garfield was the "Founder" and Mr. Henry Kaiser, Sr. was the "Boss";
2) Dr. Garfield ran all parts of the internal operation including the plan and the hospitals and employing the physicians under his name Garfield and Associates;
3) While there were, apparently, Boards, they met very seldom; Sydney and Henry made the decisions; any arguments between the two during the day could be settled in the evening as they had cocktails with their wives – sisters: "On various occasions," Clifford Keene remembers, "I saw Mr. Kaiser take on Sidney in the most humiliating circumstances. If a man had spoken to me like that I’d want to fight with him physically. It was most demeaning and I felt sorry for Sidney. Then I guess after Mr. Kaiser cooled down, he would have feelings of remorse. Always there was the awareness of that family relationship, the Kaiser-Garfield cocktail hour, the two women and Henry and Sidney." (Smillie Book 138 – Bancroft Library Collection – Bancroft Oral History - page 54) 4) "In 1952, the Health Plan and Hospitals formally adopted the name Kaiser, further testimony to Henry J. Kaiser’ growing identification with and involvement in the program. From that time onward, the program encompassed the Kaiser Foundation, the Kaiser Foundation Health Plan,a nonprofit corporation, and the Kaiser Foundation Hospitals, a charitable trust." (Smillie book p.115) 5) The word "permanente" had come from the Permanente Creek in Los Altos that never runs dry where Henry Kaiser made cement. 6) "The Permanente Medical Group, however, refused to change its name" so that they would not look like employees of Henry Kaiser. (Smillie p. 116) 7) Garfield wanted the doctors to be called Kaiser doctors and lost. Henry Kaiser, Sr. wanted the physicians to break into three groups to weaken them – that did not work either. 8) The boards have identical members; thus Kaiser Plan and Kaiser Hospitals are simply alter-egos of each other and in no way independent;9) This was an technique to make each tax exempt in the eyes of the IRS; but the Plan can pass half its profits on to the Physicians and the other half to the Hospitals and come out being "non-profit." 10) The Hospitals do not fulfill their obligations to charity but now under Halvorson direct more such money to lobbyists, secret physician guidelines, future Kaiser physicians in residency, etc. 11) No one can contact the Boards except by going through Crosson/Halvorson;
12) One Kaiser family – Henry Mead Kaiser (See Section 48) - was disgraced in 2004 by borrowing $2 million to try to make himself look like an investor guru in Europe – A Sacramento Court ruled he was to spend a year and one day in prison; 13) A Mr. Tyson moved from the Board to being in charge of brand image, his salary and bonuses jumped to $800,000 per year (just to try to sell Kaiser as a medical program rather than a mean machine business); {After the 2006 renal transplant scandal, a new brand image person was hired but Tyson is still part of the team}; 14) The Boards redirect discretionary money back to themselves;
15) The Boards make interesting loans to executives;
16) The Kaiser [national] Foundation Health Plan is the "Sole Member" of each of its state’s plan (see 990 Form budget summary) – thus it all happens in Oakland!!!!!
Section 8. THE ADVERTISING PROMISES (general)
This is a good starting point for a Kaiser investigation begins with the advertising machine to define the promises:
1. Standard KP health care level achieved now is supposed to be "superior care" (as announced just inside the cover in every Permanente Journal since 1997 and also mentioned in MD recruiting ads); "superior care" would be way above the legal minimum of "prudent care" which comes up in medical malpractice ("medmal") cases and medical board inquiry;
2. This is supposedly accomplished by physicians coming to Kaiser from the best medical schools and training programs who communicate well and rapidly; [sug gestion - to match that claim against any list of Kaiser physicians with the back grounds of the physicians displayed in the AMA Doctor Finder site – and top medical schools are relatively rare];
3. Kaiser doctors are supposedly allowed and encouraged to be just physicians according to the ads [suggesting classic Hippocratic oath advocacy of the patient] through the absence of accountant pressures; see also new Thrive radio ad – "let physicians be physicians" heard in the Fall of 2005;
4. Tag lines are developed in Kaiser at Oakland after focus groups around the country are asked to define what they want in medical care, e.g. caring physicians who know them well and will advocate for them; Kaiser has published such materials in a variety of settings – The Permanente Journal, the internal Thrive ad campaign discussions, etc.
5. [Note Kaiser’s lost the ability to use the "tag line" "in the hands of doctors" after a successful, plaintiff legal suit Olsen v. Kaiser – two patients who died; although the settlement was buried from public viewing, the conclusion to ban this tag line was clear.] Check out: The Founndation for Taxpayer and Consumer Rights (FTCR). The 2005 Kaiser "Thrive"ads say about the same – "let physicians be physicians" [with no external pressure], again a fraud.
6. As physicians seem to like the illusion of spontaneous, group discussions, Kaiser internally explains that it practices group discussions before they occur and even plants questions (described in the Permanente Journal) to make the comments appear as physician convergence of thought, for example, that moving the physician back to a coach of a team is okay;
7. There is also a KP "Brand Alert" committee that responds quickly to any negative publicity, e.g. missing the Anthrax diagnosis in Maryland, the sexual misbehavior of a Kaiser Physician in Gilroy, probably the pedophile Kaiser physician who masturbated all of the male child diabetics (Dr. Peter Fischer/Kaiser Bellflower/Downey), etc.
Section 9 – KP FIRST TAGLINE – PERMANENTE MEDICINE (RATHER THAN HMO)
Although HMOs enjoyed easy enrollments in the 1970s, the public caught on that they were rationing machines and began to dis-enroll in the 1990s. In 1998 the enrollment number of Kaiser was 9.1 million; in 2005 after huge advertising it is less than 9 million. The solution ad wise is to try to escape the HMO label and build the Permanente Medicine label. The Kaiser Family Foundation was allowed to reflect the public’s increasing disdain of HMOs since Kaiser thought they could escape the connection with Permanente Medicine. So the physicians are pushed forward in ads and made to seem caring and unrestricted. Meanwhile the physicians who last are all clear about being profit centers and viewing the patients as business units – "external customers." Even staff are only "internal customers." And they are encouraged in business memos posted on bulletin boards in staff break rooms to view Kaiser as a"mean fighting machine."
The HMO is supposed to take all the hits and say that they are only trying to keep costs down to let more of the uninsured participate. The physicians are supposed to float upward into the ethical zone as a caring group trying to help patients "Thrive."
As most enrollments occur in November, the intensity of ads goes up then. One can only expect ads that reflect focus group dreams and not reality.
Section 10 – SECOND TAGLINE "NOT-FORPROFIT"
The "Non-profit" [or "not-for-profit" ] phrase is Kaiser’s second most important [though untrue] advertising KP "tag line" trying to set Kaiser apart from Blue Cross, PacifiCare, Humana, and others. Several years ago CalPERS – a huge source of California employees and retirees – decided only to work with the "nonprofits"like Kaiser and Blue Shield.
There was no indication that CalPERS ever understood if these two systems were also for profit. Kaiser’s mutual contracting with Permanente – now for some 60 years – makes KP one entity. In fact, it should be PK (Permanente Kaiser) according to who runs the show. The guarantee of the absence of pressure is reflected in the ad slogan that the "Kaiser Permanente … is a ‘not-for-profit’[sic] group practice prepayment program headquartered in Oakland, Calif." – see typical press release of 9/2/05 as Kaiser gave a portion of its obligatory public service money 75% - supposed to be for California - to New Orleans "Kaiser Permanente Pledges Total of $3 Million to Hurricane Relief."
1. The repeat promise "non-profit" organization as reflected in a Kaiser Permanente 2001-2002 report called a "Quality You Can Trust":
A. "Today, 8.4 million Americans entrust their care to Kaiser Permanente, making us the largest non-profit health care organization in the United States" – signed off by George C. Halvorson (typed name and signature) "Chairman and Chief Executive Officer" and David M. Lawrence, MD (typed name and signature) "Chairman Emeritus."The guarantee of "non-profit"comes right from the top.
B. "Unlike most of our competitors, we have no shareholders to satisfy with short-term strategies. "[Middle of same three page source – ignoring the fact that the organization has some three thousand, physician partner - "shareholders" that care about every dime.]
2. In contrast to the above "non-profit" posture, there is Kaise Permanente’s profit ("excess revenue" ) of $1.8 billion in 2004; half of that went to the Permanente partners (shareholders) through the Tahoe One and Tahoe Two agreements so fundamental to the "partnership" of K with P.
A. This is a profit split formula that goes back to the Depression when "Dad" Bechtel and Henry Kaiser, Sr. agreed on a 50:50 split of profits on building projects – aqueducts, dams, ships, etc. – because any other numbers would show disrespect of one of the partners to the other;
B. Source of Bechtel story – book Henry J. Kaiser Western Colossus – page 33 in a quote from the August 1943 Fortune Magazine:"And his usual condition for entering any proposition was a fifty-fifty division. ‘Dad’ had no patience with fifty-one, forty-nine arrangements. He used to say, ‘No man with a sense of self-respect wants to be controlled on that kind of percentage."
C. Source of Tahoe One details – several books written by Kaiser physicians – Dr. Smillie’s book and Dr. Raymond M. Kay Historical Review of the Southern California Permanente Medical Group –
3. Its Role in the Development of the Kaiser Permanente Medical Care Program. Dr. Kay was clear:
A. "Though the budget variance was not large, it had a significant effect on the surplus to be divided between the Medical Group and the Hospital, and hence on the partners’ sharing of the surplus." (p.9) –1954;
B. The Retention Fund was developed so that the profit could be more even year to year;
C. When the physicians had losses in San Diego in 1966, "the Health Plan agreed to isolate and absorb any such losses." (Page 12). [And we see this over and over where the physicians are not really at risk – there is always startup of loss coverage by either the Plan or the Kaiser Family];
D. For tax purposes the Hospitals and physicians were separated in 1956 – but only on paper; in 2005 one finds Dr. Crosson and Mr. Halvorson working just doors apart on the same
E. "Distributing profits among the partners was a very real form of sharing. Our business advisors thought that the distribution of profit should be related to the administrative responsibilities of the physician. However, we believed it should be equal for all partners and that the professional and administrative responsibility of each partner should be reflected in his salary." (page 35);
F. To protect retirement profits from the IRS a paragraph was added to say that the profits might not always come to a physician (p.55);G. The Medical Service Agreement of 1958 included the concept that the physicians would get 50% of the hospital net surplus. (page 92); H. The Kaiser Family Foundation helped in expansion to Ohio and Michigan (page 104-105). [Note – the KFF always insists that is in no way involved with KP; it also presents no history on its website.]
I. Nurses were trained to do physician tasks. (page 112)
J. In 1960 Kaiser started trying to put arbitration into its contracts. One of the groups refusing was Kaiser Steel. (p.127)
K. K. Early on Kaiser insisted that it compete with at least one other plan for any business so that members would not be "captive"; later this protection was disregarded – many have only Kaiser as the choice;
L. Bonuses can occur in two ways – first that Permanente can operate at less than the contract level (e.g. $65 per member per month a few years ago) AND one half of the total KP "excess revenue."
M. The entire Tahoe Agreement is included as an appendix including:
"Any excess of revenue over the aggregate of these base needs would be shared in by the Medical Groups and the Hospitals on some negotiated percentage basis." [That was later clarified to be 50:50 in 1955 (page 168 Smillie book), the old Dad Bechtal teaching to Mr. Henry Kaiser, Sr.]
N. [Note that Edgar Kaiser was a key player in KP (page 167) – the same person that went to Washington and explained to President Nixon through Ehrlichman that the less you do the more money you make.]
4. Then in 1984 Kaiser was paid by Medicare to write in detail about its physician payment system; it was clear in booklet - printed about all the physician systems that Kaiser preplanned the excess revenue at each budget cycle;
5. Source of "Tahoe Two" details – the Permanente Journal – as various stories of who to get out of the problem of two years without profit in an organization with sixty years of profit; part of the Recovery Plan for 2001;
6 .[Dr. Paul Wallace used the term "Tahoe II" in his power point summary of Kaiser history to emphasize its importance. ]
7. Internal Kaiser efforts – for example, detailed in Kaiser Colorado - to spin the message of physician profits into the story that all of the money is directed to the $3 billion IT program.
Section 11 – THIRD TAGLINE – PHYSICIANS KNOW PATIENTS WELL – "YOU CAN DO IT, DANA"
The ads try to make it look like the individual physician knows the patient even better than he or she knows herself. This is the Dr. Welby model that Kaiser actually scoffs at – a physician patient relationship that was not valid then or now. Despite all the awards this program won for accuracy and patient education, Kaiser wishes the TV series never happened. Yet they can still pander to the model in ads.
In reality, the Kaiser physicians have set up barriers to knowing patients individually. The Kaiser physician is – since about 1998 - just a coach to the "team." Access is easier – which patients want – but the physician is more distant. Phone calls are made to patients by nurses to try to get them to feel cared for and stay home. E-mails for every M.D. in 2007 have the same goal.
The feeling that Kaiser projects in reality is cold and thoughtless with huge barriers for the patient. This seems to have been the reason that Kaiser failed in several states in New England, New York, North Carolina, Michigan, Texas, Kansas, Nevada, and Utah. That number is about the same as the number of states (really urban areas within the state) in which they are currently in – Hawaii, California, Oregon, Colorado, Ohio, Atlanta, and the Mid Atlantic region with Washington, DC in the middle – Maryland, DC, Virginia, and West Virginia. In fact, Kaiser is 75% a California phenomenon and really only slightly national.
Yet they try to look national in their general press paragraph – the largest non-profit HMO in the country with many awards and 11,000 physicians. The awards are really ones where they helped design the test and then worked toward the test not toward patient care.
The worst example is where Kaiser tried to look the best in cardiac care by talking the sickest patients out of any care; in this way they took the hardest 25% of patients out of the survey and came out on top. (I am sure Dr. Parker – who headed this study for the State – would not go to Kaiser if he had chest pain himself.)
Section 12 - THE PERMANENTE MAP – BLUEPRINT OF PERMANENTE (THUS KAISER AS THE ENABLER)
This is a visual, short history of Permanente (and thus Kaiser as well) developed by and published by Kaiser in its Permanente Journal [suggestion – it would be wise to print a copy of the Permanente Map off this same web site – kaiserpapers.com – and then have it in front of you while reviewing the next paragraphs of map touring]:
1. The map appeared in the Permanente Journal in purposely faded form accompanied by an article;
2. The article explained that the Permanente fleet was powered by the "group ethic" as if "the wind" into its sales; [the "group ethic" is actually the Kaisereeze phrase for not spending patient premium monies so the Permanente groups can have maximum profits];
3. A San Francisco advertising company had been hired to help the physicians visualize their corporate history, current position, and future onto one map;
4. A good deal of time was spent by top Kaiser partner physicians on this map in Oakland according to one Permanente Journal article;
5. The map was then blown up four feet by six feet and used as a key visual to motivate and teach physicians (see picture of blowup in the same "Permanente Map" article);
6. Physicians already aware through retreats of what key words mean e. g. "Lake Tahoe" which has never had a Kaiser clinic standing for Tahoe One – need little help in following the game plan; Lake Tahoe stands for the 50-50 profit split described in sections (See Section #4 – Tahoe One and Tahoe Two topics).
7. The map shows, for example, that transition from the "DOCTOR-PATIENT RELATIONSHIP" to the "PERMANENTE–PATIENT RELATIONSHIP, " the latter on the captains’ wheels (perhaps reminding some of the Enron employee/ stockholder relationship); this is the corporate practice of medicine the try to deny;
7. The only pathway to success is to use the altered science Kaiser calls the "Current of Evidenced-Based Medicine"; [this is junk science meant to give the least care possible].
9. The path to the goal is to follow this "Current of Evidenced-Based Medicine" into the SEA OF SUPERIOR CARE; that will lead to KP PROMISE LAND;
10. [Note that just as Permanente is made into a near being with its "genetic code" (see next section). KP is turned into a quasi-religious cult with a fleet of ships sailing toward the "Promise Land". Such approaches create the psychological impetus for physicians to bend or even discard earlier medical ethics, like the Hippocratic Oath.]
11. The goal is silicon valley IT with software ventures with EPIC, investment capital [New York auction of KP bonds], and a "Our SUSTAINABLE FUTURE," the realization of the huge retirement monies available to those that can stick it out to retirement and consider themselves Kaiser physicians for life.The Permanente Map is the map to retirement bliss for the physician and poor care for the patient. Kaiser tries to keep this Map from being introduced in any of its legal battles.
Section 13. "GENETIC CODE" PERMANENTE AS A BEING
Permanente is described as having a "Genetic Code" and DNA in the book by Dr. John G. Smillie – Can Physicians Manage the Quality and Costs of Health Care? – The Story of the Permanente Medical Group. This Permanente "genetic code" is also mentioned in the Permanente Journal in recent articles – so the concept lives in the "Permanente culture." [Such animation may echo for some the attempt by the Third Reich of the German society to substitute loyalty of physicians to the living "Volk" for those with lives not worth living. Learn more about this in the book “The Nazi Doctors” – a Faustian duality – how good physicians in large numbers could become executioners.]
The details of the Permanente Culture are still emerging:
1. "The culture of The Permanente Medical Group had to be transmitted. Such transmission is always a challenge after passing the first pioneer era. Thenew physician associates coming into Permanente could not be expected immediately to understand the complex story of the group or the rules and procedures the group had evolved for its survival."(Smillie book page 203);
2. The task would fall to the Executive Committee – like a council of elders.[Religious style teaching comes in once again.];
3. "Cecil cutting developed a finely chiseled, factually rich, and well-delivered set speech, such as that given to a conference of new Permanente physicians in December 1966 – which set for the history, five part genetic code, and future prospects of the program." (Also page 203);
4. This methodology tries to make KP or at least P – Permanente a living organism fully in need of resuscitation as the competing patient;
5. The term "genetic code" is still part of the orientation of new physicians. It is also mentioned in the Permanente Journal on page 90 Spring Issue 2005.
6. Dr. Kay once referred to Kaiser as the "cosmic struggle," again a quasi-religious tone; Hitlerthought he was in a cosmic struggle to restore the Fatherland.
Section 14 – OVEREXTENDING EVERYONE’S TRAINING – JANITORS THROUGH PHYSICIANS
One way to save money is to have everyone practice above his or her training. Kaiser has used this approach for a long time.
1. Janitors and other housekeeping personnel were renamed "service partners" and then told to answer patient call button requests for help in the emergency room; the state of California caught this and told Kaiser to quit it;2. Nurses (RN only) are called practitioners with no formal training and allowed to do sigmoidoscopies, to change insulin doses, to run cholesterol clinics, to see patients in primary care (though having no diagnosis skills), etc. (Rural, Primary Care)
3. Family Nurse Practitioners with formal training are taken way past their training by being grouped as 3 FNPs and 1 orthopedist to cover 25,000 patients; the FNP ends up trying to explain MRIs to patients and to get surgical consents;
4. Nurse anesthetists in Hawaii Kaiser are asked to give independent anesthesia without a physician supervision or backup;5. Nurse midwives are asked to do difficult deliveries beyond their training;
6. Psychologists are asked to suggest medication changes to psychiatrists hundreds of miles away, the latter with no chance to see the patient;
7. Kaiser internists in Colorado are taught by cardiologists to do stress tests with the outcome being a mix of accidental errors and purposeful under-reading;
8. (2007 Update) - In Hawaii, primary doctors can be found substituting for dermatologists and cardiologists {despite a federal sanction and probation.}
9. General surgeons in the Los Angeles area were asked to do pediatric surgery – with corrections needed on some cases;
10. Neurologists are asked to cover hospitals hundreds of miles away by phone with no intention of seeing the patient the next day. All of this saves money, but it also dumbs down the ex- pertise of care and increases the chance for error. But that was the way Dr. Lawrence got his original fame – by substituting mid level practitioners for physicians. The idea was that a nurse with a four year college degree and then a three years masters program could almost match a physician with a four year college degree, four years of medical school, one year of internship, and two to four more years of residency.
11. The death of the postman with anthrax near Washington, DC - after seeing a Kaiser FNP and asking for an anthrax workup – is just one of tens of thousands of examples where this app-roach does not work.
Section 15 – "TEAM CARE" – PHYSICIAN AS COACH; PHARMACISTS GIVE OUT PRIMARY CARE (Quote in Ref. 24)
When Kaiser learned that it was losing enrollees because access to physicians was so difficult, the answer was not to hire more physicians but rather to bring in the Team Care program. This can be seen at the top of a typical mast in the Permanente Map fleet – and thus is now a central theme. The physician coach would get special bonus money if costs were reduced in this new strategy.
At the same time as Kaiser promised better acces, it encouraged several doctors to quit. This meant more nurse diagnosing and fewer experts.
The patient does experience more attention and more access but not more care. One of the pharmacist’s goals is to talk patients into cheaper medications. In one case a pharmacist talked a patient out of Priolosec three separate times, each time the patient got worse on generic Zantac called ‘ranitidine’.
This is not patient advocacy. This is Permanente profit advocacy – and Permanente pays the pharmacist and decides who goes and who stays. There has been no "evidence" that team care has a better outcome. And in many ways it has been unpopular as it was predicted to be. In discussiongroups recorded in the Permanente Journal before starting this program, that it was really not necessary that the patients like it.
Don Parsons:
"We’ve talked a lot about the importance of the physician-patient relationship and being an advocate for the patient; yet, we’ve been designing adult primary care models based on collaborative care teams where physicians may not in fact have a lot of contact with many of their patients." - Source The Permanente Journal Winter 2000 / Volume 4 No. 1Article "The Permanente Medicine Roundtable: Defining our Practice Principles" Kaiser physicians talking p.47.Skip to further in the article.
Jed Weissberg:
"So maybe we should be talking about the Permanente-patient experience, which encompasses the broader relationship between patients and the medical group, which ideally acts as a kind of extended care team."This ends up on the Permanente Map (Section 12) captain’s wheel near the end of the water journey as the new relationship – the "Permanente-patient relationship" - except that it is between a for profit corporation who has taken no oath to be on the side of the patient. And, in fact, on the same map, the physician-patient relationship is simply an early part of the water path that the Permanente fleet sails past.
The Kaiser ads, though, paint the physician as being close to patients – which is back to the Marcus Welby TV show image that patients want. So the ads are only playing to focus group wishes, not reality.[When I worked in a Kaiser ER, my boss laughed that the ad the night before about a caring Kaiser pediatrician in the Fresno area was a hoax; that physician worked far away and has had a full practice for a long time. Deceiving patients was apparently funny to this Permanente partner, one who said that his own personal net worth had gone up $125,000 since finishing residency.]
Section 16 – PHYSICIAN RECRUITING - RAGS TO RICHES
One pattern that comes up often in Kaiser is the recruitment pattern that might be called rags to riches. A physician grows up in relative poverty in a South Asia culture – India, Thailand, Figi’s families from India, etc. He or she looks to hospitals that will take foreign physicians. Often this includes the urban New York City hospitals.
Kaiser then recruits in these hospitals for positions out in supposedly sunny California. For example, as Kaiser tried to give the East Coast anthrax information, it included a view of the San Francisco Bay Area – close to Dr. Lawrence’s million dollar view from Piedmont - as a recruitment tease to encourage the same physicians to get out of the East Coast.
Kaiser knows that it is easier to Kaiserize physicians to the "Permanente Culture" of the "dual responsibility" to patient and PERMANENTE if they have come from a religion that is more life negating than Christianity. The gradation of world religions according to life negating and life affirming was done by MD and multi-Ph. D. Albert Schweitzer in one of his many books.
Kaiser also talks about how to recruit the physician in conversations in another article in the Permanente Journal. The conversations are to focus on absence of billing concerns, awards won, easy consultation, time off, etc. There is to be no mention of the rationing of care. [Managed care likes to call this the "rationalization" of care.]Once the new physicians arrive, they go on a retreat to hear about the Permanente Culture from the senior partners. While they learn that they will be audited from morning to night against business efficiency, they also learn about the secret riches that will be theirs if they can stick it out. The first goal over the necessary first two years is to prove that they are "managed care" compatible – correct balance of business over patient. Then they can start up the partnership ladder making more each year.
Finally, they can become senior partners with a near doubling of salary as money gets squirreled away for golden retirements. Internally the physicians often told me, (Dr. Phillips) "I’m not really a Kaiser type, I’m just waiting to vest," to create some level of steady income after retirement. Actually the work load goes down as one gets more senior – the goal then being to watch the hourly " pool" (fire at will) doctors and the partner want-to-be-is working the harder shifts.
Those physicians that do the full and correct job at Kaiser must stay hours late for the volume of work presented. I tip my hat to them. They describe themselves as "Kaiser slaves," giving real medicine at unreal hours. One physician I knew did this just to get benefits to his handicapped daughter; he would be among those that would be needed to rebuild an ethical system should Kaiser implode in ethics scandals.
Section 17 – MEDICAL MALPRACTICE COVERED BY THE PLAN (Reference 52)
One of the outcomes of the Tahoe One restructuring was that the Kaiser non-profit Plan would be responsible for all costs of any malpractice action against any of the Kaiser (Permanente) physicians, that would include the senior partners of this for profit corporation. That means that the Kaiser Plan is a quasi-charity uses patient premium monies to fight against allegedly injured Kaiser patients.
This is all codified in the Medical Service Agreement (for full draft - see the kaiserpapers.com) of each Permanente unit with each Kaiser Plan unit. [The profit split is also part of the agreement but an attachment (Article K – Section 24) that is kept highly secret from the rest of the world.] The physicians, in turn, have to agree that they will let the Plan make all the legal settlement decisions. They are also to be considered Kaiser physicians for life – and can get their retirement monies only if they cooperate with Kaiser’s defense strategies long after they have retired. After leaving Kaiser and then being called back to be deposed in all legal action or testify in court, the physicians will also be paid their past salary - $100 - $130 and hour for each hour spent. [The physicians must opt for Kaiser Care in retirement - it is called "scary" in a Kaiser Permanente doctors newsletter in Denver.]
Next, the physicians can be protected by chart tampering. First the chart comes to the participating physician (who might have committed the error) on the grounds that he or she can withhold any material that might be psychiatrically revealing or damaging. This is a big invitation to alter the chart in many ways. Tampering includes altering entries (now mostly electronic), deleting pages or whole sections, scrambling the chart, copying it so it won’t show up well or key signatures will end up missing, adding other patient’s charts, etc. The goal is to make the expert review to complex for patients to afford the hourly time of the expert physician.
One example of tampering is when a female necklace appeared on a shoulder x-ray on a male patient who has never had a necklace. Another is to have biopsy slides disappear. One had notes with "AMENDED" written twice. There are endless variations. Kaiser will also pretend that it cannot find one of its physicians even if he is working across the San Francisco Bay at another Kaiser, e. g. ENT case with destroyed accessory nerve function and right shoulder girdle paralysis for life.
Next, the chart goes to the Kaiser legal team. The methods of tampering include removing material, wrong patient material, copying too small, rearranging pages, lack of pagination forcing cut and paste to reassemble, copying light, copying so signatures and training won’t show up (nurses making insulin decisions), etc. They legal team keeps a good copy and creates a bad copy as well to be given to the patient’s family or their attorney.
Often the Kaiser attorneys will give a small portion to the patient’s family or attorney. In one case in Southern California they blamed the patient for not getting his full records; the same Kaiser attorney said that Kaiser never disturbs records.
[I, Dr. Phillips, have never seen a Kaiser chart in a medical malpractice forum that has not been tampered]
Perhaps a decade ago, the California Supreme Court castigated Kaiser for its unfair malpractice, arbitration system. Kaiser had stalled a legal case to let the patient die of his illness. This was the case Engalla v. Kaiser – see the HARP.org web site for this and other selections.
The "Blue Ribbon Committee" (needed to reform Kaiser under court order) chosen by CEO Dr. Lawrence – with a few judges on board but still Kaiser empathetic recomended inside the report that both the Kaiser attorney and the patient’s attorney get the same records at the same time. The recommendation was mysteriously dropped in the final version and has never been followed!!! Little was done except to have an "independent" legal office run the arbitration system at $1 million a year; the head of this office then testified in Sacramento as to how well it was working (consumer groups appropriately complained).
Add in forced arbitration with judges who become dependent on Kaiser income – an average of three $15,000 cases a year supplementing their retirement incomes – and the system provides absolute power back to the HMO. Absolute power leads to absolute corruption (an old phrase restated by President Kennedy at Amherst College on the dedication of the Robert Frost Library where I, Dr. Phillips, was simply a premed usher). Kaiser does not mind violating the ethic of talking to the judges on the side as well – see San Diego arbitration case that Kaiser by craft alone won (see also Section 38 – baby dies).
Whenever possible Kaiser will prevail in arbitration over injured patients or families by using legal technicalities. An Oakland father was delayed in getting an expert to testify on a case of poor delivery techniques with his son dying at home 16 days after birth and on a respirator. He is appealing but with little chance of being heard. Judges that have Kaiser as their Health Plan get good treatment and assume it is the same for everyone else. Auditors might look for blue stars on the front of special charts – no need for appointments, etc.
Section 18 – Government as Kaiser’s Rich Uncle;
In the book, Mr. Kaiser Goes to Washington, the author spells out a new type of businessman – who is a "governmental entrepreneur." The goal is to look for business opportunities within government. Kaiser and Bechtel – working as partners - learned how to benefit first from the New Deal and then the War by solving FDR’s problems. Ross Perot became rich working out Medicare health billing audits. [Halliburton has become good at this now probably with same formula of 50% profit to each level of subcontractor.] When Mr. Kaiser was asked to show off his ship building prowess in the Richmond area of California, he answered that the real tour should begin in Washington where it was all set up.
Mr. Kaiser was able to pull off many advantages for Kaiser Permanente (under its former names) by his relationship to government. Dr. Garfield had been recruited to the war but then was allowed to get out of the war to set up private health care in the West Coast shipyards. Kaiser was given almost free clinics from the government after the war.
When there were price freezes, Kaiser physicians were allowed to escape that problem. "Wage and price controls, imposed by President Nixon in 1971, created a problem until Kaiser-Permanente negotiated a satisfactory outcome by obtaining an agreement that the Health Plan was not considered an ‘insurer,’ nor were the doctors considered ‘providers.’ Both were combined as ‘an institutional provider." (Source Smillie book – on page number 238)
Then the HMO Act of 1973 was built around Kaiser’s model – giving it a huge advantage. All units became federally qualified HMOs – with more "startup monies." (See Nixon speech.) All Kaiser units are Federal HMO.
Employers were required to have one open model HMO and one staff model HMO for all employees – whether or not the employers thought these had quality.
Later ERISA gave legal suit protection to all HMOs, suddenly immune like diplomats. An AMA article called this the 13th year – 1986 - ERISA addition a great new boost for the HMOs created in 1973.
The IRS used to challenge Kaiser physicians incomes but later the IRS has given letters protecting them where the parties are described as "X" and "Y" so few can see what is happening (http://www.pro-adv.com/1-issues/4-98.htm - "IRS Approves Dual Organization Deferred Compensation Plan.") (These letters let the physician build up huge retirement monies hidden under the plan until retirement. )
Kaiser succeeds because of lots of help from its rich Uncle – Uncle Sam.
Section 19 – California Helps Kaiser Float $3 Billion in Bonds;
One of Kaiser’s ways to raise investment capital is through the selling of bonds. Kaiser normally floats about $3 billion in such bonds. Here the state of California acts as another rich uncle. Kaiser reinvests the money in higher yielding entities and thus makes money off of the California citizens. This is one reason Kaiser likes California.
1. The bonds are often called "Kaiser Permanente" bonds but in fine print only obligate the Hospitals cash flow to repayment; so calling them "Kaiser Permanente" bonds is another fraud of its own this time involving New York banks.
2. Kaiser Permanente is called "non-profit" in their booklet which is mail fraud as these booklets are mailed around the country; [mail fraud was the key solution in the book and movie ‘The Firm’ to putting a stop to a rich and ruthless group of attorneys.]
3. The docs are not touched if the bonds fail, nor their golden retirements; so Permanente really has nothing to do with it but be part of the label bait for seniors who have $25,000 to buy in;
4. The Fitch company of New York rates Kaiser and allows the "non-profit" myth of KP to come out with their ratings; they are open to suit in my opinion for this fraud and have been carefully warned in writing (See letter on kaiserpapers.com);
5. In the bond booklets – which are free – Kaiser outlines all the possible problems that may occur –fraud rulings, IRS rulings, etc.; this is a good place to look for Kaiser’s vulnerabilities, which are many.
6. Kaiser issues its previous year profit prediction in about February of the next year in order to prepare for the New York City auctions that will take place in about March of each year.
In California the Kaiser Plan loans Permanente money to donate to the governor. A consumer group caught this and complained. The state was supposed to look into this after the complaint; silence followed.
At Kaiser Christmas parties for local politicians, TVs are often given out as special door prizes (Hanford California 2004). Kaiser can only exist if the government gives its support or fails to regulate the HMO. The TV gift monies come from patient premiums meant for health care.
Section 20 – Beltway Relationships – White House, Congress, and Supreme Court;
1. "Bain and Associates | Case Study – Kaiser Permanente" as a good place to start on theInternet.http://www.bainpr.com/cs_kp.html 2. Dr. Nudelman’s background is a common crossover of people between the White House and Kaiser. "Phillip Nudelman, MBA, Ph. D., is chairman and president of Kaiser/Group Health, a nonprofit organization serving over one million people. Dr. Nudelman is also president of Group Health/Kaiser Permanente Community Foundation, dedicated to improv ing the health of communities in the states of Washington and Oregon and in northern Idaho. The foundation supports health education and promotion, research, and high-quality care for these communities. Dr. Nudelman participated in the White House Task Force for Health Care Reform and the President’s Advisory Commission on Consumer Protection and Quali ty in the Health Care Industry. He is the current chair of the American Association of Health Plans, serves on the Pew Health Professions Commission and on the board of Premier, and is co-chair of the National Advisory Council on Professional and Organizational Ethics."[Ethics indeed.]3. LOBBYISTS – this activity is now funded from hospital required 3% "charity" funds; " Don Parsons, MD is our Washington lobbyist" (Winter 1998 Permanente Journal – Later in the Summer 1998 journal he describes Kaiser’s view of patient rights – actually used to stop the rights effort.)
4. Kaiser helped defeat the Patient’s Bill of Rights by helping to launch the Medical Error campaign (Source – USA Today); this moved the focus from rotten barrels (HMOs) to frontline (mostly private) physicians – supposed rotten apples. Kaiser forgot to mention that their wrong diagnoses are the most dangerous source of patient care error in the US. But as Kaiser physicians are disproportionately California Medical Board "expert witnesses," thepartner experts judge the partners – a sweet deal.
5. Kaiser likes to use its money losing Washington, D.C. unit to try to impress Congress. And Permanente Journals are left around legislative offices to make Kaiser look like it is intellectual and into research.
Section 21 – Agencies Help Kaiser – HHS, NAS, AHRC (the "arc"), and CDC;
1. HHS
Years ago when Kaiser was being magnified by the HMO Act of 1973, Health, Education, and Welfare were all one NEW department. The term "HMO" or Health Maintenance Organization was created in 1973 simply as a way to promote the Act to the public and get it passed. Even Kaiser admits this phrase creation in Summer 2004 Permanente Journal page 41 – in a discussion about Kaiser slipping back to fee for service by charging co-pays.Now Education is separate from Health and Welfare. The newest name is Health and Human Services whose organizational chart can be found easily on the Web. Kaiser interacts with many of its units. Each year HHS and Kaiser negotiate HMO payments for care; seniors make up 25% of Kaiser’s income even though they are 10% of the patients.
2. CDC
The CDC is often in need of testing immunizations. Kaiser considers its 8 million "external customers" [name for patients in business model] fair game for testing with a minimum of research subject protections. While it does, apparently, use an Institutional Review Board for consents and research, there is no indication that this is not just a rubber stamp activity. Kaiser’s level of ethics can be measured by their requiring employees ("internal customers") to have immunizations by such statements as "the State requires it," which is untrue. The goal is to get as much CDC money flowing in as possible. Putting ex-CDC leaders on the Kaiser Board is another way to do this. Board members in the Bay Area get about $50,000 a year for little work. It is all about networking with the CDC. Kaiser’s lyme disease testing is an example of misusing CDC criteria. The CDC has strict testing requirements to include only the most obvious lyme cases for disease tracking. But the CDC says that these tests will miss many with the disease and do not represent full screening. Kaiser uses the CDC screening test only and admits it will miss lyme cases. This is another sad area that will be part of the historic legacy of Kaiser once it is transparent.
So there is a whole area of greed in immunization testing. This is well developed on the Website kaiserpapers.com.
C. NATIONAL ACADEMY OF SCIENCES (WAS) For years many have thought the NAS was the pinnacle of science in the US. This was supposed to be an untouchable group of scientists who fed good science into the government. The first problem to be seen is that foundations are adding funding where the government is too frugal. Suddenly the Robert Johnson Foundation is thanked for funding many programs in NAS; this is a foundation set on trying to magnify the health care roles of non-physicians – thus being a Kaiser ally. Next thing we know is that Dr. David McKinnon Lawrence is made a member without contributing anything to science except the idea that medical care should be diluted and given out by the less trained. Other Kaiser management shows up there as well. Pretty soon the NAS spin-offs (1970) – the Institute of Medicine (IOM) - is the one choosing what America focuses on – individual physician error rather than the ethics of managed care. Or more immunizations and less critical care. Or the supposed disorganization of private medicine.
Each campaign [like Pogams of the Tzar in "Fiddler on the Roof"] is heralded by a bound book and usually becomes the rallying cry of the Joint Commission in Illinois as well. One particular such book is Crossing the Quality Chasm published by the IOM in 2001. It was published by the National Academy Press in Washington, DC.
The author team was the Committee on Quality of Health Care in America. On this committee we find David McKinnon Lawrence, Chairman and CEO Kaiser Foundation Health Plan, Inc. Oakland, CA. [Before leaving he added Kaiser President title as well.] He is joined by many of his managed care supporters/ "evidence" authors – Donald M. Berwick, Boston entrepreneur, Lucian L. Leape of Harvard Public Health, etc. Berwick is a favorite in Kaiser articles as an independent commenter on Kaiser.
Donald Berwick chaired the subcommittee on "Building the 21st Century Health System"organ- ized somewhat like Kaiser. Mr. Berwick helped to bring "evidence" information from England to Boston; many have thought that this was just the cheapest approaches as the studies were often done by the government of England in the University of York. Real "evidence" guidelines – sponsored as the Cochrane Collection after the accountant Archie Cochrane would be cost neutral – more care in some areas and less care in others. Support for this book IOM "Chasm" book and study came from such groups as The Robert Wood Johnson Foundation, the California Health Care Foundation, etc. – both with strong ties to managed care.
That should be no surprise.
D. AGENCY FOR QUALITY CARE AND RESEARCH – AQRC OR "ARC"
Some years ago this group with a slightly different name was about to self-destruct. So it re- invented itself and took on the above name, thereby taking on the mission of measuring medical "quality" all over the country. The budget of "ARC" is now some $300 million a year. Many university researchers under ARC contracts fight for increased budgets every year.One grouping of "research money" goes to contracted EVIDENCE PRACTICE CENTERS – e.g. Duke University a Kaiser "partner." Sometimes Kaiser gets its experts for malpractice cases from these physicians who know Kaiser can influence their research funds. Suddenly the care becomes excellent in the eyes of these professors. A Duke expert testifying in Colorado would look independent on the surface; the injured patient is the loser.
Kaiser works very closely with – even kicking in extra money – the Oregon Health Science EPC –another "partner." The head of this research program is the only American on both the Canadian and the American "Working Committee" on guidelines. She transferred to Oregon from Duke University; Kaiser can be seen as outside the process and still be inside. One of the researches of a Ph.D. at Oregon Health Science involved seeing if Permanente partners could live with EPIC pop ups, a useful corporate goal but not one that should be funded by tax dollars. It turned out that they could and their EPIC pop-ups are now the national Kaiser standard.
ARC first spent some $500,000 to $1 million each on defining "evidence based" care for key illnesses where government hoped to save money. But three years later these were considered out of date, and ARC had no way to improve them. So ARC gave up the role and turned to managed care to fund the National Clearinghouse for protocols of care. This group in turns licenses their material to plans like Kaiser who re-mold them into cheaper recommendations and make internal committees feel like they are doing the design. Out of this comes cheapest pathways not science of medicine path- ways.
One attempt ARC made was to see that two me bedical journals – one for pediatricians and one for emergency physicians – came out with the same article at the same time – the best approach to fever in the child from 3 months to 24 months. That was supposed to be the standard. Money was paid to both journals for their-cooperation. Then Utah pediatricians found out that 95% of Utah pediatricians did not agree with the guidelines – that they had been developed by children’s hospitals with house staff and did not fit the office setting. The guidelines died with no plan for future resurrection. Yet government will occasionally try to resurrect them to go after individual medical licenses as if this useless doc- ument is still a useful "standard of care" to impose on physicians after a bad outcome.
Now there are so many different guidelines floating around from each HMO system that most office physicians often just file them in the wastebasket. All integrity has been lost. It is like the mountain top snow has ended up in the muddy and dirty delta of profit focuses. But at Kaiser the end result is computer pop ups designed in Oakland and forced on front line physicians from Maryland to Hawaii. Yet Kaiser won’t publish these for outside physicians specialists or generalists to review. (See Section 31.)
Finally NIH Support grants to Kaiser - In the year 2000 "Kaiser Foundation Research Institute" in Oakland, California received $17,722,000 under "Non-profit” Institutions. This should be audited in relationship to the profit goals of Permanente who runs the program.
Section 22 – Shadow Government Agencies Help – The Forum, G-7, etc.;
The Forum - When I called once to learn more about ARC, I was told that the real money was nearby in the private organization called THE FORUM FOR QUALITY CARE run by Dr. Kenneth Kizer formally of California. His background includes being head of EMS for California, then head of the California Health Care Foundation, then head of the VA, and finally over to the private side of power as head of the Forum, his best salary yet by far.
He extols the great success of the VA in eliminating error – which is false – as one of the reasons he can do the same across the country. The last time I worked for the VA the lightbulb was out over the medication cabinet, x-ray was using poor columnating (leading to excess exposure of health tissues), clinics were hard to access, etc. Even the attending staff – mostly into publishing more than patients – had to be chided for not seeing the patients and allowing VA care to mean resident care.
The Forum does not allow any citizen – even physician – to join. Rather it is about organizations joining who then pay dues according to size. At the time when the list of members was public, Kaiser Permanente was there. Now the list is secret. Generally, the Forum sets the agenda for ARC and is therefore a type of shadow government. At least Henry Kaiser, Sr. was more open about his activities in Washington.
G7 – Kaiser would dearly love to have its electronic medical record become the world standard and with secret partnership with EPIC – the Wisconsin vendor – make back all the expense and more of developing this material. One way to do that is to work closely with other big players. One will find Kaiser easily by opening up G7.
Section 23 – Bankruptcy Case of Dr. Moses – Protecting Retirement Riches; see:https://kaiserpapers.com/businesspractices/moses.html
Some years ago Kaiser orthopedist, Dr. Moses, went bankrupt. He was then and thereafter a Kaiser leader with many years of Permanente partnership. His hope was to protect his retirement profits from the bankruptcy trustee. Many documents can be found on the kaiserpapers.com to get to the legal documents that developed in Los Angeles, then Pasadena, and finally San Francisco for appeal. Permanente came in and joined the case so as to defend not only the secrecy of the amount but also the idea that creditors could ever touch it.
The court papers reveal that Permanente admitted that the money came from Dr. Moses being a partner of a for profit corporation. The trustee noted that the agreed monthly payout for life at retirement would make Dr. Moses a millionaire in this asset alone. And he noted that Dr. Moses could choose to retire within a year or so.
Permanente won the individual argument since the money was not literally in Dr. Moses’ hands but available only if he agreed to organizational goals at and after retirement – like taking no other jobs after leaving without Permanente permission. But the papers give insight into the various extra monies that accrue above the typical yearly salary now of $250,000 a year plus major benefits. The interested accountant could develop the material someday into new insights of the money flow in Kaiser.
Dr. and Mrs. Moses were found gulty of State Tax Evasion.
Section 24 – Kaiser Physician Sues Kaiser as KP Leaves Kansas City;
Some years before closing its Kansas operation, Kaiser Permanente bled it down by forcing it to contribute $3 million a year to prop up its Washington, D.C .unit. The latter was developed to try to make Kaiser look national and be near Congress and the White House but has been a losing proposition from the beginning.(Kaiser bought in to Washington, DC as Humana left.) When Kaiser did close down its Kansas City unit(and thus its presence in Kansas), the Permanente physicians learned about the closure in the newspaper. This ticked off one of the physicians – Dr. Waxman - who had been in leadership. He sued Permanente first as part of a group of three and then on his own. His request was that he become the auditor of the flow of money as Permanente left. He was sure his practice buildup time had a value.
He lost the case but contributed enormously to our understanding of KP from the inside: (details to be expanded in future enlargements of this investigation) Also in the court papers is the Permanente meeting in which Dr. Jay Crosson, President of the Permanente Federation, joined by videotape to try to tell the physicians that the decisions were proper and further appeal would not help. He specifically told them not to appeal the financial decisions to the top executive committee, The Kaiser Permanente National Partnership Committee, which he co-chairs with CEO Mr. Halvorson.
Perhaps the most important document in the Johnson County legal file is the Medical Service Agreement between the Kansas Permanente Group and the Kansas Health Plan – see kaiserpapers.com – "A Kaiser Permanente Medical Service Agreement" j ust above "View the Selected Writings of Dr. Charles Phillips." And within that is the usually secret Article K to be found below in its entirety as eight pages – the for profit split guarantee together with a "corridor; a method of keeping the profits similar year to year."
ARTICLE K At Risk Compensation Section K-1 Planned At Risk Compensation https://kaiserpapers.com/businesspractices/kpmsaK.html
Medical Group is placed at risk with respect to a portion of its planned compensation, called Planned At Risk Compensation. The amount of Planned At Risk Compensation for each calendar year will be set forth, or determined in the manner set forth, in the Memorandum of Understanding. The reasons for placing Medical Group at risk with respect to a portion of its planned compensation are to:
(a) Provide Medical Group with an economic interest in achieving optimum efficiency and economy in the provision of Medical Services, Hospital Services and Administrative Services incident to the conduct of the Medical Care Program, consistent with maintaining appropriate standards of quality and services; and
(b) Help protect the solvency of Health Plan by transferring a portion of the financial risk of conducting the Medical Care Program to Medical Group; and
(c) Meet the requirement of the Health Maintenance Organization Act of 1973, as amended, and regulations and rulings thereunder, to the extent that they require Medical Group to be placed financially at risk. Section K-2 Calculation of At Risk Compensation Planned At Risk compensation will be adjusted as follows to produce At risk Compensation:
(a) If there is zero Net Program Revenue, Planned At Risk Compensation will not be adjusted;
(b) If there is a deficit in Net Program Revenue, Planned At Risk Compensation will be reduced by an amount equal to the lesser of Planned At Risk compensation or 50% of the deficit in Net Program Revenue;
(c) If there is any Net Program Revenue, Planned At Risk compensation will be increased by an amount equal to 50% of Net Program Revenue, except that At Risk
Compensation will not exceed 10% of Medical Services Costs for the year. If At Risk Compensation (that would be payable were it not for said 10% limitation) exceeds 10% of Medical Service Costs, then the excess over 10% will be retained by Health Plan and utilized in furtherance of general Medical Care Program objectives such as increasing benefits to Members, adding to or improving facilities, or minimizing rate increase requirements in future years.
Section K-3 Determination of Net Program Revenue
The sum of the following amounts will be subtracted from Program Revenue:
(a) All Health Plan costs and expenses for the year (including the cost of wage, salary and fringe
benefit increases for employees of Health Plan, but excluding the amount of such increases to non-unionized employees not approved by Medical Group), except that the cost of any qualified retirement plan is the amount budgeted to fund the retirement plan trust ("Trust") regardless of the amount computed pursuant to Statement of Financial Accounting Standards No. 87, Employers' Accounting for Pensions ("FASB 87"), but excluding (i) depreciation, (ii) taxes and other governmental impositions or charges, (iii) expenses, if any, allocable to the production of Excluded Revenue, and (iv) actual compensation to Health Plan and Hospitals management personnel determined at year end, in addition to monthly salary, as recognition for services performed during the year; plus
(b) Base Compensation to Medical Group for the year under Article J of this Agreement; plus(c) Planned At Risk Compensation and planned compensation to Health Plan and Hospitals management personnel determined at year end, in addition to monthly salary, as recognition for services performed for the year; plus
(d) Base Compensation to Hospitals for the year under Article G of the Hospital Service Agreement, except (i) amounts allocable to depreciation, and (ii) taxes and other governmental impositions or charges; plus (e) Revenue attributable to Nonmember and Workers' Compensation Services; plus
(f) Other Revenue; plus
(g) Miscellaneous Revenue collected and retained by Hospitals (which reduces Base Compensation to Hospitals referred to in (d) above; plus (h) The net amount, if any, by which the aggregate sum of actual expenses is less than the aggregate sum of planned expenses (as set forth in the Operating Budget) to the extent attributable to:
(i) The amount set forth in the Operating Budget and Memorandum of Understanding as planned cash generation to meet the planned capital requirements of Health Plan and Hospitals,
(A)reduced by the amount, if any, by which the amount budgeted to fund any Health Plan or Hospitals Trust exceeds the amount computed pursuant to FASB 87, and
(B) increased by the amount, if any, by which the amount budgeted to fund any Medical Group Trust exceeds the amount paid to Medical Group for contribution to the Trust; plus
(j) The planned amount of taxes and other governmental impositions or charges upon or payable by Health Plan or Hospitals, increased or decreased by the actual amount of any variance from forecast in any such tax, imposition or charge, but excluding any increase or decrease attributable to a variance due to a change in organizational status or classification, change in law, administrative or judicial decision, or mistake of law; plus(k) Any other item agreed to in writing by Health Plan and Medical Group.
The balance of Program Revenue, if any, remaining after all of the foregoing have been deducted is Net Program Revenue.
Section K-4. Payment of At Risk Compensation
At Risk Compensation will be determined on an annual basis and final payment will be madewithin a reasonable time following completion of the outside audit for the year, but in no event later than April 1 of the following year. Health Plan will periodically estimate and report to Medical Group the status of At Risk Compensation, and advances against estimated At Risk Compensation may be paid at any mutually agreed time.
Section K-5 Distribution of At Risk Compensation
At Risk Compensation will be paid to Medical Group, free from restriction, for distribution among employees of Medical Group in such manner as Medical Group, in its discretion, may determine. Medical Group intends to implement equitable arrangements under which At Risk
Compensation will be distributed on an individual, department, subgroup, or other appropriate basis so as to constitute an effective incentive for efforts of individuals, departments and subgroups to further the common interests of Health Plan and Medical Group in providing maximum benefits to Members at the most reasonable cost consistent with maintaining accepted professional standards of Medical Services and Hospital Services.
Section K-6 Determination of Net Medical Group Revenue
Net Medical Group Revenue is the amount, if any, by which the sum of: (a) Base Compensation to Medical Group; plus (b) At risk Compensation; plus (c) Revenue attributable to Nonmember and Workers' Compensation Medical Services; plus (d) Other Revenue; plus (e) Any other revenue agreed to in writing by
Health Plan and Medical Group as subject to this definition; exceeds all Medical Group expenses (including salaries of Physicians and any Residual Claim paid by Medical Group but not reimbursed by Health Plan, but excluding any payments under Section K-4) incurred by Medical Group during the calendar year relating to performing Medical Services and other services under this Agreement. If the sum of (a) through (e) above is less than all Medical Group expenses as herein described, then Net Medical Group Revenue will be a negative number.
Section K-7. Negative Variance in Net Medical Group Revenue
Sections K-7 and K-8 will be applied after calculation of Net Program Revenue and Net Medical Group Revenue. If there is a negative Variance in Net Medical Group Revenue, then Health Plan will pay Medical Group a portion thereof (multiplied by the number of Eligible Physicians) according to the following table: Amount of Negative Variance
At Least
Up To
Paid By Health Plan
0
$ 500
20%
$ 500
$1,000
$100 plus 50% of variance over $500
$1,000
No Limit
$350 plus 90% of variance
If application of this Section K-7 is necessary, it will be applied only once each year.
Section K-8. Positive Variance (a) Reduction in Payments to Medical Group. If there is a positive Variance in Net Medical Group Revenue, then a portion thereof (multiplied by the number of Eligible Physicians) will be deducted according to the following table and applied as provided in Section K-10:
Amount of Positive Variance
At Least
Up To
Amount to be Deducted
0
$ 500
20%
$ 500
$1,000
$100 plus 50% of variance over $500
$1,000
No Limit
$350 plus 90% of variance over $1,000
(b) Addition by Health Plan
If there is a positive Variance In Health Plan Cash Generation (after reduction by any payment under Section K-7), then (i) the amount of such Variance will be divided by the number of Eligible Physicians, (ii) portions of the resulting amount will be calculated according to the table set forth in Section K-8 (a), (iii) the resulting amount (corresponding to the "Amount to be Deducted" in the foregoing table) will be multiplied by the number of Eligible Physicians, and (iv) this amount will be applied as provided in Section K-10.
Section K-9. Negative Variance in Health Plan Cash Generation
If there is a negative Variance In Health Plan Cash Generation (after applying Section K-7), then all or part of the amount thereof may at Health Plan's election be included in the next Rate making Forecast, and the amount thus included will be solely for the account of Health Plan.
Section K-10. Application of Positive Variances After all computations and payments to be made pursuant to this Agreement have been made, the sum of the amounts, if any, determined under Section K-8(a) and (b) will be applied first to reduce Health Plan's negative net worth, if any, and then in furtherance of general Medical Care Program objectives such as increasing benefits to Members, adding to or improving facilities, or minimizing rate increase requirements in future years.
Section K-11. Limitations on Amendments of Certain Agreements
Health Plan will not amend the Hospital Service Agreement in a manner that increases payments to Hospitals and reduces payments to Medical Group without Medical Group's written consent, and will amend or rescind the Guaranty Agreement among Health Plan, Kaiser Foundation Hospitals, Kaiser Foundation Health Plan, Inc. and various subsidiaries of Kaiser Foundation Health Plan, Inc., executed effective April 1, 1989 ("Guaranty Agreement") only (a) with Medical Group's written consent or (b) upon at least 8 calendar months' written notice to Medical Group. If the Guaranty Agreement is amended or rescinded under (b) without Medical Group's consent, then (x) all obligations (whether or not then known) incurred or accrued prior to the effective date of amendment or rescission will remain subject to the guaranty of the Guaranty Agreement as now in effect or as it may hereafter be amended, and (y) "15th month" in Section I-2(e) will be deemed to read "5th month" if the First Notice is given by Medical Group (but shall remain "15th month" if the first Notice is given by Health Plan), but if Health Plan gives a First Notice, then by notice in writing to Health Plan given within 30 days thereafter Medical Group may elect to have "15th month" in Section I-2(e) read "5th month" or any higher number month less than 15.
Section K-12. Limitation on Changes in Compensation Methods
Neither Health Plan, Hospitals nor Medical Group will change its system or method of personnel compensation that is reflected in the Operating Budget without the consent of both parties hereto."
Article K might be found nowhere else but out of this Kansas court site just outside (Southeast) Kansas City and now copied for web use – kaiserpapers.com. That would suggest that the individual Kaiser physicians are to put this material in a very safe place and never copy it. It is the smoking gun of Permanente profiting 50% from the Plan income. For other information on the Kansas City court papers defining Kaiser as a business not a medical care plan with two partners K and P see on the kaiserpapers.com this selection https://kaiserpapers.com/kansaswaxman.html
The supposed limit of global Permanente profit of 10% actually means that the profit to Permanente cannot exceed the 10% of the entire Permanente budget – but since almost half of the full budget if KP is that of the Permanente contractor (partner) including nursing, pharmacy, psychologists, clinic staff, supplies, etc. then the real profit to the partner can be a 100% increase in each physician’s salary – which it is. The government chooses to be fooled into thinking that a maximum 10% profit sounds about right. The Colorado Commissioner of Insurance tried to put a profit ceiling on KP but they fought back and won.
Section 25 – KAISER PERMANENTE VENTURES – HOSPITALS AND PERMANENTE PARTNERS
One of the decisions in the 1997 loss of profit was to create other ways for Permanente to make money. One was VENTURE CAPITALISM. Interestingly it is done 50-50 with the hospitals, a supposed chain of charities. The public will be surprised to learn that charities can be 49% for profit and still be IRS non-profits.
For Permanente to invest – and as part of the Recovery in 2001 Plan or Tahoe Two – they had to form a national corporation. That is thePermanente Federation. The Permanente Federation has a sub-unit for profit unit called The Permanente Company or Permco for just such transactions. Permco operate in Oakland, it is incorporated in Delaware.
Mr. Henry Mead Kaiser was helpful in planning investment schemes for Permco and the Kaiser Hospitals until he was convicted of a $2 million business fraud. He took $2 million with inside help from a California company to use in Europe to fake that his investment schemes were successful.
He is still awaiting sentencing – probably trying to raise the missing money. He was fired from KP shortly after Dr. Phillips emailed Kaiser wondering if he was still allowed to be on the Board after confession and conviction. A more obscure "Kaiser," family member - a pilot for an airline, took his place on the Plan/Hospitals Board; he may still be a secret adviser through her.
One sure way to make a profit is to try to be on both sides of contract negotiations. For example, Kaiser contracts out dialysis. So the Kaiser physicians are heavily involved in Renal companies. So Plan money spills over to physicians once again. Sometimes for profit companies are developed within Kaiser – like CareTouch – and then spun off as a $14 million company with Dr. Lawrence still on board. And there are others. Sometimes Kaiser summarizes all of its ventures, but the public probably only gets to see the tip of the iceberg.
Only the FBI, Medicare or the Office of The Inspector General would have the clout to go in and analyze all of these transactions. But what President would like to go after a $25 billion operation like Kaiser with all of its lobbying power? That would require a President to recall whohe or she represents through election.
Section 26 – ANALYZING KAISER’S 990 FORM "CHARITY’ ACTIVITY V. IRS INTENT
The IRS requirements for non-profit health plans and non-profit hospitals are clear and different. There is also the requirement once a year to present a public 990 report. In fact, Kaiser will send copies free if requested of the Oakland central accountant. It is always ready six months after April 15th, the excuse being that it combines all of the state programs and thus is too complex to be done on time. This means that Kaiser gets the bond publicity about the profits six months before anyone can really look at them. And Fitch bond rating has become less than independent – allowing false statements like "non-profit" near KP even as profits are presented.
Corporations try to use their 990 forms to brag about how much charity they are doing. They rarely show first how much the government would require them to do to avoid taxes. What they don’t expand upon is what they consider charities, particularly if it is things that help raise profit or reduce expenses. At some time these expenditures will be carefully reviewed.
Section 27 – THE KAISER FAMILY FOUNDATION – NOT INDEPENDENT
The Kaiser Family Foundation has always tried to look independent from KP, but they know that KP might be the only chance for a positive family legacy. Otherwise Henry Kaiser might be remembered for things like the 100 plus deaths at Hoover Dam. Plenty of money has changed hands – e.g. startups in Utah, Colorado, Ohio, and Hawaii. And a family member is always on the Kaiser Plan/Hospitals Board.
Henry Kaiser industries developed for the family an endowment of $50 million. Interest is spent each year – perhaps $3 million. Some of the spending is aimed at Universities like Harvard and Stanford for Henry Kaiser Positions, endowed chairs. And these universities help KP at regular intervals in news stories.
While stating that they are independent of KP, the record is different:
1. "In January 1958, however, Kaiser began building a hospital on Waikiki Beach a few hundred yards from the Hawaiian Village hotel. He financed this effort with a $2.5 million grant from the Henry J. Kaiser Foundation." (Smillie book p. 182);
2. Then there was the Detroit loan of $2 million to try to start up a Kaiser in Michigan – (Smillie - p. 227);
3. The KFF helped Kaiser start up in Colorado as well (Smillie p. 253). Perhaps another topic that needs to be followed is the Kaiser Foundation International – Smillie p.220.
Section 28 –CONTROLLING UNIVERISTIES WITH MONEY AND ENDOWED POSITIONS
At one time Kaiser got many of its treatment guidelines from Milliman & Robertson, a company in the State of Washington also helping Group Health of Seattle. This company would in turn try to make its guidelines look like they were coming from Universities by offering money for university departments. The lid was blown off when several pediatricians in Houston sued M&R for guidelines using their names; one was the suggestion that children with meningitis could go home in 2 days.
So the whole managed care industry became more stealthy in their influence of universities, as M&R remained a background enabler. For Kaiser this includes:
1. a Henry Kaiser, Sr. endowed position at Johns Hopkins and Stanford;
2. payment to Harvard School of Public Health to help the KFF develop surveys that are than published in the Washington Post; the newspaper’s payment for what is supposed to be news is very questionable;
3. then there is the Stanford-Kaiser joint emergency residency;
4. there is considerable interaction "partnership" with Kaiser research and the Oregon Health Science center discussed elsewhere;
5. there are projects between Kaiser and UC Berkeley School of Public Health.
Then these same locations become endorsing sources as to Kaiser’s health care when the PR department puts out "news" stories. The main physician who helped Kaiser with their pill-splitting program was a Dr. Stafford who came out from Yale to Stanford as he published that pill splitting was okay.
This will be discussed in the next section. He came to the department of Stanford that does outcome research and has a Henry Kaiser endowed position within this unit. (Stanford University pharmacy does not split pills, so the ‘Safford’ article was more for HMO dependent patients than university patients; Yale probably does not condone splitting either.)
Section 29 – THE PILL SPLITTING CASE – "AFTER MARKET" MEDICATION TAMPERING
I, Dr. Phillips, worked at the Kaiser ER in Fresno between the Fall of 1997 and the Spring of 1999. I noticed that many patients had pill splitters in their bags of medicine. These little blue splitters had a lot of dust and created pill pieces that were of various sizes. Then I wrote a prescription for myself of Lisinopril 20 mg a day for high blood pressure and got back a bottle of Lisinopril 40 mg with the directions of & frac12; tablet (thus a split) each morning.
I asked for where was the split authorization on MY prescription. The answer is that I agreed to all of Kaiser’s policies when I signed on even though there was no physician orientation book. Then I got to see a copy of the system-wide splitting list from Oakland. Kaiser later tried to say that the list was not copied there but it actually shows that the copy was from the Fresno pharmacy fax machine and done right there.
I realized that this was not about Kaiser Fresno but rather the whole national HMO system. Phone calls confirmed that this was going on from Washington, DC Kaiser to Kaiser Hawaii. Kaiser San Francisco resisted but then later joined in – economic pressure from Oakland that puts all clinical units in business competition with each other.
As I did more research, I found out that the weighing studies done elsewhere showed that pill spitting of pills with or without lines introduced pill variations from 40% to 60% of the prescribed dose. So it makes no medical sense except for brief patient titration on the way to a regular dose.
The practice of pill splitting was begun by the VA at Long Beach Family Practice Department and then was picked up by Kaiser with its 300 pharmacies (the "pill halving" program). [See Timmis v. Kaiser law suit – judges stating that regulatory agencies have the responsibility to investigate this, yet there is regulatory silence.] 2007 - I will make my 6th try to the Board of Pharmacy on pill fragmenting - 06/27/2007.
Actually, the VA pharmacist involved in writing up the success of pill splitting was next found employed in Kaiser Vallejo. I tried to see if government was interested in the problem:
1. Food and Drug Administration – this is an "after market" problem so they don’t get involved; [yet they do with recycling of single use cardiac catheters after Newsweek published the practice];
2. ARC – chose not to get involved in the policy question; the lead physician on quality. Dr. Eisenberg took no stand;
3. Surgeon General – made sure the AMA tied the practice to physician’s not just pharmacists,but no objection was offered;
4. California Pharmacy Board – opened a file and then never answered - file still open;
5. California Medical Board – opened a file and then never answered – file still open;
6. California Department of Managed Health Care – look at the issue and decided to stay out of it.
What it means is that the government allows Kaiser to give a patient a blood pressure medication like lisinopril with doses cut (fragmented), varying from 16 mg to 24 mg. And, in fact, seniors liked to take these fragments from big to little and end up licking dust as the final dose (ABC News verified this). Dr. Stafford never allowed for this.
Incidentally, the VA has never approved splitting officially but has saved a ton of money doing it.
Not only is pill splitting immoral and unethical as it randomizes treatment doses, but it is a biopsy of the whole Kaiser HMO’s race for profits regardless of science. Any physician not playing ball with this program would have his pharmacy costs go up and be found to be "managed care unsuitable." The two-year observation period is to get rid of physicians with such Hippocratic ethics.
Kaiser messes around with other medications. For example, it saves money by having women use oral pills vaginally rather than use vaginal suppositories. This is not FDA approved but Kaiser does not care.
Diabetics were also steered for years toward Tolinase (tolbutamide) for glucose control until 2006. Yet the PDR talks about the pills side effects requiring more testing than normal. Kaiser does not offer this testing. One patient in Pittsburg, California was given Tolinase to split. When he became sick on the pill, he was told it would take about a month to get in to make a change. When that visit came, he was told he didn’t have diabetes after all. One Stanford pharmacist I talked to called Tolinase a "museum" medicine.
Section 30 – CHANGING LAB VALUES REPORT BY DR. PHILLIPS TO CONGRESS AND HARP
I, Dr. Phillips, was asked by a Congressional aid to write up the problem of lab testing at Kaiser. I did so and turned it in to Senator Grassley’s committee. The notebook size report can be found on HARP.org and the kaiserpapers.com.
Kaiser’s lab testing strategies include all of the following:
1. under-reading stress test to tell people that they don’t have angina when they do;
2. hemoglobin normals are changed to find fewer anemias (thus catching less right colon cancer);
3. kidney tests normals are changed (like creatinine to 1.5) to discover less renal disease; I think that I convinced them to quit this.
4. lipid testing is done with patient having eaten – Los Angeles Kaiser started this;
5. testing for Lyme disease is done wrong so as to catch less Lyme disease;
6. MRI’s are not read thoroughly, thus finding less disease;
7. Etc.
Knowing that the government does not care, Kaiser has continued with all of this. The less illness found among their 8 million people, the less money is spent on treatment or more left over from premiums to create massive profit.
Section 31 – CLINICAL PRACTICE GUIDELINES – CHEAPEST CARE POSSIBLE
In 1997 Kaiser – as a way to pull out of low profits – developed the Care Management Institute to try to get all Kaiser physicians to practice the same way. The CMI was to come up with treatment guidelines. Physicians would be forced to change as Kaiser "made it easier to do the right thing."
Although Kaiser supports this effort with its charity monies, the CMI Guidelines are kept secret. They are to be used as "evidence" for giving patients less care. Opposite from the Mayo Clinic, Kaiser, for example, does not think stool testing for blood is helpful (missing more right colon cancer). This is all manipulation by Permanente physicians. These Clinical Practice Guidelines (for outpatient care) can be found at https://kaiserpapers.com/cajud.html
Kaiser hospital libraries still have these protocols as full notebooks. [These libraries have old textbooks that are often castoffs of texts from better hospital libraries.] And now these guidelines popup as "the right thing to do" in the frontline office all over the country in Kaiser clinics. The inpatient guidelines are called Clinical Practice Pathways. A few of the standard orders pages can be found online.
Section 32 – KAISER HOSPICE AND NURSE "CLOSERS" – DOUBLE MORPHINE SYRINGES
This section in the future will discuss the case in the Bay Area where a woman was killed by overdose of medications. There were two morphine syringes involved – one well tracked and the other with no tracking. This section will also discuss the Kaiser ABC Kit and recommendations to use more morphine for shortness of breath.
Section 33 – PATIENT LOSES LEG AT KASIER –POOR DIFFERENTIAL DIAGNOSIS AND TAMPERED LAB TESTING
This case involves a man in San Jose who had clotting of veins and arteries. Kaiser missed the diagnosis and then covered up its tracks. The man lost his leg. See “Sharon and Gary Rushford” information on kaiserpapers.com.
Section 34 – HUGE POTASSIUM DOSES – THE VICKIE TRAVIS STORY ABOUT HER DAD
This case is well described by Vickie Travis near the beginning of her website called kaiserpapers.com. It is also in the Congressional Record (Kaiser not contesting the truth).
I was able to confirm all of her story – dirty techniques of home care, overdoses of oral potassium, cover-up with diagnosis, selective removal of lab data, etc. When Vickie Travis finally obtains full records, Kaiser’s care will be transparently awful.
Section 35 – WRONG CARE FOR PROLAPSED CORD – BABY DEATH IN OAKLAND
This case will be developed here in the future. The Kaiser physician pushed a baby’s prolapsed umbilical cord against the baby’s head. The child was born blue and died on a respirator at home 16 days later. Kaiser beat the father on a court deadline technicality.
Section 36 – WRONG CARE OF PREECLAMPSIA – BABY DEATH IN SAN DIEGO
This Bank of America employee had a terrible headache showing that she had preeclampsia. It was called sinusitis. She went home. Her baby was stillborn. Kaiser offered her $100,000. She said that was too low. Then Kaiser beat her in "arbitration." The Kaiser representative talked to the judge on the side which was illegal and immoral. She ended up losing $20,000. When do patients have the right to sue their employers for setting up an outfit like Kaiser as if it is a real health choice?
Section 37 – JAMIE COURT’S BOOK –"MAKING A KILLING" TOO MANY INFANTS WITH PARALYZED ARMS (ERB’S PALSY) DUE TO THE USE OF MIDWIVES FOR DIFFICULT DELIVERIES.
Jamie Court’s book describes many Kaiser problems: huge advertising, poor care, too many babies born with paralyzed arms, etc. More details will be developed here.
Section 38 – KAISER AND EMPLOYEES – CURRENT ILLNESS – MISSING SLUDGE CHOLECYSTITIS
Kaiser treats employees as "internal customers." So when loyal visiting nurses on three month contracts with Kaiser get sick, Kaiser does not want to find complicated medical problems. In this case Kaiser did not do thorough testing and delayed diagnosis.
Section 39 – KAISER AND EMPLOYEES – FORCING EMPLOYEES TO STAY WITH KAISER’S WORK COMP FOR ONE YEAR
Kaiser is one of about a dozen organizations in California allowed to force their employees to use their care for a year before having outside physicians involved. The approach is always employer friendly – employee unfriendly. Dina Padilla and April Gottman have organized this part of the campaign against Kaiser.
Section 40 – KAISER AND EMPLOYEES –BENEFITS (LOSING YEARS OF RECORDS TO PAY A NURSE LESS IN RETIREMENT)
Kaiser does not like to pay long term benefits to nurses. So one is not surprised when a nurse found that Kaiser lost ten years of her records so as to avoid paying her correct retirement. She has had to fight for a long time just to prove when she worked. Luckily she kept salary records.
Section 41 – KAISER AND EMPLOYEES – SAFETY VS. ASBESTOS
[This section will be developed later. Check with Dina Padilla’s website for workers.]
Section 42 – KAISER AND THE MEDICAL BOARD OF CALIFORNIA
Some years ago the physician experts around California told the Medical Board that at $50 an hour they were underpaid. They tried to strike and all were fired. Kaiser then offered their o wn physicians as replacement. In fact, Kaiser pays them "administrative time" at the same time as the Board – double dipping. This has allowed Kaiser to punish critic physicians in yet another way.
This is quite a comeback from the days when Sidney Garfield, MD lost his medical license by sneaking Dr. Clifford Keene, a practicing surgeon, back into a residency program at Kaiser so he could get a California license quickly. There was a time when the Medical Board tried to keep Kaiser in check. Now it is the other way around.
Section 43 – KAISER AND THE CALIFORNIA MEDICAL ASSOCIATION
As the Kaiser Plan pays for the dues of the Kaiser M.D.s to attend the Medical Societies around the state, it is not surprising that they gathered enough votes to put in their own President of the California Medical Association this year.That will help silence the voice of organized medicine once again.
Section 44 – KAISER AND THE DEPARMENT OF MANAGED HEALTH CARE IN CALIFORNIA
Kaiser has been fined several times by the DMHC but never significantly against their $20 billion presence in California alone. Thus the DMHC has been a dismal failure. Studying these documents in this presentation you are reading, they could come up with 100 fines. A good place to start would be false advertising.
Section 45 – HENRY MEAD KAISER - $2 MILLION FRAUD – HAD TO QUIT KAISER PLAN AND HOSPITALS BOARD IN 2004 – NOW AWAITING FEDERAL SENTENCING WHILE TRYING TO PROVIDE RESITITUTION
Many of us are wondering how you are powerful enough that you can escape jail time. His sentence kept getting postponed. Now he had found God he says and the court ruled that he can remain free. Perhaps all those who stole less than $2 million should be freed.
Section 46 – KAISER AND DIRTY ENDOSCOPY – THE HEPATITIS STORY
The makers of endoscopes for colonoscopies have exact requirements for safe cleaning, the bowel being 1/3 bacteria and a common location for viruses. This cleaning is especially to get rid of Hepatitis C, AIDS (the HIV virus), etc. But Kaiser’s shortcuts have resulted in patient exposure. Suddenly Kaiser has to send out hundreds of letters warning patients about possible deadly viruses. And some patients have been infected in this way with Hepatitis C – potential 4% death sentences.
Section 47 – KAISER'S INDUSTRIAL CLINICS SHARE DIAGNOSES WITH EMPLOYERS
In one case the Kaiser report said one patient had "alcoholic hepatitis" – actually Hepatitis C as he tried to tell them. There was no GI appointment for nine months until he simply died of the disease. Kaiser was, no doubt, hoping that he would lose his job and be off the Kaiser Plan. Although Kaiser’s own Permanente Journal articles state that diagnoses should not be given to employers only work capacity, KP does give out diagnoses all the time. One purpose is to get patients out of Kaiser who might cost money. Often the diagnoses are wrong.
More about this later. [Oregon has finally passed a law to stop such sharing of diagnoses.]
CONCLUSION –
IT IS AND HAS ALWAYS BEEN SIMPLY ABOUT THE MONEY
Everyone who reads this material will have to decide to what level of detail they want from it. This has been a summary of so far 73 pages. Full printouts of what is available in useful articles, magazines, and books could easily fill an encyclopedia. Full boxes of records on Kaiser Permanente could fill up a baseball diamond with boxes.
This is a huge HMO with a yearly money flow of $25 billion. It is for profit in that the for profit physicians are the P part of KP, and they get half of he profits.Every year we get closer to revealing Kaiser’s reality to the world. Transparency is the best chance for change.
Charles Phillips, MD, FACEP
SOURCES In a court of law or testimony before Congress it is important to have backup material so that the expert is more of a tour guide than an advocate. The Kaiser materials speak for themselves when put in the proper order. If Kaiser testifies against Kaiser, then judges or newspaper reporters have an easier time getting to the truth.
1.Edgar Kaiser message through Ehrlichman to President Nixon that KP is for profit and makes money by doing less – this leads to the HMO Act of 1973 designed around Kaiser. http://www.whitehousetapes.org/pages/listen_tapes_rmn.htm for the clearest possible presentation. Check February 17, 1971, 5:26 pm - 5:53 pm, Oval Office Conversation 450-23. Look for: tape rmn_e450c. It is 12 MGS if using Windows Media Player. (See into to this investigative article.)
2.The book - Can Physicians Manage the Quality and Cost of Health Care? - The Story of the Permanente Medical Group -gives an accurate history of the growth of Kaiser into the giant that it is; help and money came from all areas of Kaiser including the Kaiser Family Foundation. Passages of Interest include: A. Page 18 - the original profits of Sidney Garfield, MD, working out on the desert in the Contractors Hospital - $250,000 during 5 years on the desert;
B. Page 116 - the split of partners and non-partners spelled out for the first and last time;
C. Page 133 -"the Medical Groups, organized to make a profit."
D. Page 135 - physicians are present at "each meeting of the Kaiser Foundation Board";
E. Page 143-173 - Chapter 8 on "The Tahoe Agreement" which explains the power and money split among the entities at Kaiser;
F. Page 144 - the split of the "Retention Fund" 50:50 to the Hospitals and Permanente physicians [a recurrent theme to this day];
G. Page 149 - the division of the parts of Kaiser into parts to best leverage tax protection;
H. Page 158 - the details of the Tahoe Agreement as clarified by the Working Council - "Excess revenue would be equally distributed" between the hospitals and the physicians (the Plan then coming out even each year);
I. Page 168 - more on the same split of 50:50;
J. Page 173 - again the same split;
K. Page 176 -"the individual physician was the profit center";
L. Page 239 - Kaiser got government exceptions and all parts became a federally qualified HMO. Note that Dr. Smillie’s book was supported financially by The Board of Directors of the Permanente Medical Group, the Group Health Foundation, and the Kaiser Family Foundation. And the Central Office staff of Kaiser Foundation Health Plan corrected some misconceptions. [The Kaiser Family Foundation always states on its website that it is entirely independent of KP; this is not true – see Section 27.
Kaiser in 2005 still supports this book and sells it through the main website for $2 a copy – less than it costs to print.] Dr. Smillie was the first Kaiser pediatrician in San Francisco and rose to the top – "liason from all of the Permanente medical groups to the Central Office of the Kaiser Foundation Health Plan in Oakland, California." (Book Jacket)
3. "Kaiser Agrees to Disclose Physician Guidelines, Compensation to Settle Suits" – newspaper article announcing the conclusion of Olsen/Victa v. Kaiser – [the ‘in the hands of doctors" issue];
4. "A look inside; Settlement requires Kaiser Permanente to publish info on docs decision making" – more related to the settlement, announced originally in a joint news release by Kaiser Permanente and Jamie Court’s organization;
5. Job Bank – Ohio – Permanente physician needed – ownership issues;
6. Tax Analysis of X + Y by which the IRS allows secondary physician retirement funds to accumulate untaxed under the Kaiser Plan – "IRS Approves Dual Organization Deferred Compensation Plan" – http://pro-adv.com/lissues/ 4-98.htm ;
7. "The Permanente Map" – designed by Permanente with an ad agency over many hours to give a corporate overview – issues of "group ethic," "Lake Tahoe," the Federation as a fleet, a water path that makes the doctor-patient relationship a phase on the way to the Permanente patient relationship; etc. all the way to "Our Sustainable Future" [map not meant by KP to be enhanced and studied]
8. Best Guidelines – the American Diabetic Association (ADA) Clinical Practice Recommendations – sample of real science although still tilted by the internal managed practice committee with in the ADA;
9. Cheap Guidelines – Kaiser’s watered down Clinical Practice Guidelines that search for less disease – details on the Kaiser Papers website;
10. Worst Guidelines – (Supposed) Patient friendly Version accessible by current Kaiser patients (but not by patients considering joining nor outside physicians);
11. Stanford University – a long Summary of Sources for Review of Diabetes Standards – note that Kaiser is the only one that is not public;
12. "Making the Right Thing Easier to Do" by Paul Wallace [actually making it time consuming for any Kaiser physician to follow his or her own care plan if differing from that of the non-licensed, top partners];
13. "Electronic medical record alerts and reminders" – part of a really unnamed thesis, 107 pages, as work done with Permanente partners – KPNW – 2002 as date of publications’ [many hours of video tape stored somewhere]:
0. this demonstrates the close relationship between Kaiser and the Oregon Health Science University, a subcontractor to the federal government through "Arc";
1. Kaiser physicians are asked to work with the EPIC program which increasingly tells them what to do through their desktop computers.
2. Prepared Kaiser for the huge contract with EPIC – the "E" standing for "embedded" pop-ups
3. 14. "A beautiful mine" – July 2003 – a goal being "… all physicians following the same guidelines …" – the suggestion being that the best medicine is practiced through central guidelines coming out of Oakland;
4. 15. "Transitions of Clinical Information Systems" (Fall 2003) – (page 11) "Preprogrammed rules and templates created by KP for charting and ordering will trigger the decision-support mechanisms" - this was the IBM CIS predecessor to EPIC;
5. 16. "This is Getting Serious" – Fall 2004 – more intense control of front line physicians;
6. 17. Stephen B. Adams – Mr. Kaiser Goes to Washington – The Rise of a Government Entrepreneur – Kaiser’s dependence the government – solving government problem for,in turn, being free from real audit.
7. 18. "Kaiser Federal Home Loans" - [see if loans are forgiven over time];
8. 19. "Kaiser's Comeback - Betting on the Durability of the Integrated Delivery Model" -check in the blurring of whether Kaiser Permanente could be nonprofit or just the plan.
9. 20."Southern California Physician Recruitment Benefits" - Google search [notice the long list of financial categories not even including the partnership split]
10. 21.Executive Biography of Charles C. Harwood Jr. on Hoovers Online - note that the Mid-Atlantic Permanente Group is a "for-profit partnership" [but Permanente is part of the KP "non-profit" organization the false Kaiser message].
11. 22."The Latest Stuff from Gerry" – the "20 wrongful death claims in Dallas County alone."
12. 23. "Millions are losing their legal rights" – San Francisco Chronicle - 10/7/01 - about arbitration -"a system with no laws."
13. 24. IT goes centralized - "Shock Therapy at Kaiser Permanente" - [But check into EPIC and note that it allows Kaiser to put pop ups in the computer to force all of the physicians to do the same - Oregon Ph. D. thesis available to show the pop up process being developed early in EPIC.]
14. 25. Dr. Smillie’s book which has a whole last section called "An Essay on Sources." The Bancroft Library at UC Berkeley has the Papers of Henry J. Kaiser, for example, 387 cartons and 208 volumes "for a total of 430 linear feet." The Archives of The Permanente Medical Group – location unclear – have a large file of internal documents to unfold the history as well. Kaiser can be understood in one conversation with Ehrlichman to Nixon, in a short summary of several pages, in a longer version of now 129 pages, or in full document examination enough banker’s boxes of materials to fill up a little league baseball diamond. With patience, the investigative approach can understand it all.
CP