KAISER PERMANENTE

THE UNAUTHORIZED TOUR

AND

DOCUMENT SUMMARY

© C. Phillips and V. Travis 2006

© 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)

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 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 al coholic hepatitis –                      which was  actually delayed Hepatitis C for which the patient never got help and died.)

Section 48 -  Conclusion

Sources

Section 1. INTRODUCTION:

    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

Section 2. SHORT SUMMARY:

    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.

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

    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.

    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.

    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.]

    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).

    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.

Section 3. DELVING DEEPER

[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 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."

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.org.

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];

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.org; 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:

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.

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.org (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:

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

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;

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;

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:

B) he changed Kaiser from the IBM/CIS program in Denver to the Wisconsin EPIC program developed in Kaiser in           Oregon;

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);

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.

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;

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.

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)

Section 10 – SECOND TAGLINE "NOT-FORPROFIT"

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 professiohttps://kaiserpapers.com/dirtylit.htmlnal and               administrative responsibility of each partner should be reflected in his salary." (page 35);
    https://kaiserpapers.com/dirtylit.html

"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.]

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"

Section 12 - THE PERMANENTE MAP – BLUEPRINT OF PERMANENTE (THUS KAISER AS THE ENABLER)

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.]

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

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.

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.

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;

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.}

Section 15 – "TEAM CARE" – PHYSICIAN AS COACH; PHARMACISTS GIVE OUT PRIMARY CARE (Quote in Ref. 24)

Don Parsons:

Skip to further in the article.

Jed Weissberg:

Section 16 – PHYSICIAN RECRUITING - RAGS TO RICHES

Section 17 – MEDICAL MALPRACTICE COVERED BY THE PLAN (Reference 52)

    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]

Section 18 – Government as Kaiser’s Rich Uncle;

Section 19 – California Helps Kaiser Float $3 Billion in Bonds;

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.org);

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.

Section 20 – Beltway Relationships – White House, Congress, and Supreme Court;

Section 21 – Agencies Help Kaiser – HHS, NAS, AHRC (the "arc"), and CDC;

1. HHS

D. AGENCY FOR QUALITY CARE AND RESEARCH – AQRC OR "ARC"

Section 22 – Shadow Government Agencies Help – The Forum, G-7, etc.;

Section 23 – Bankruptcy Case of Dr. Moses – Protecting Retirement Riches;
see:https://kaiserpapers.com/businesspractices/moses.html

Section 24 – Kaiser Physician Sues Kaiser as KP Leaves Kansas City;

ARTICLE K
At Risk Compensation
Section K-1 Planned At Risk Compensation
https://kaiserpapers.com/businesspractices/kpmsaK.html

(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

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

1. Delays in or early openings of new facilities; and
   
2. Delays in or early acquisition of facilities or sites for proposed facilities; and
3. Medical Group extraordinary expenses generally related to new facility startup costs; and
4. (iv) Any other item agreed to in writing by Health Plan and Medical Group; plus

(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

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

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

(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.org. 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.org 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

Section 26 – ANALYZING KAISER’S 990 FORM "CHARITY’ ACTIVITY V. IRS INTENT

Section 27 – THE KAISER FAMILY FOUNDATION – NOT INDEPENDENT

    While stating that they are independent of KP, the record is different:

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

    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.

Section 29 –
THE PILL SPLITTING CASE – "AFTER MARKET" MEDICATION TAMPERING

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.

Section 30 –
CHANGING LAB VALUES REPORT BY DR. PHILLIPS TO CONGRESS AND HARP

Kaiser’s lab testing strategies include all of the following:

    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

Section 32 – KAISER HOSPICE AND NURSE "CLOSERS" – DOUBLE MORPHINE SYRINGES

Section 33 – PATIENT LOSES LEG AT KASIER –POOR DIFFERENTIAL DIAGNOSIS AND
TAMPERED LAB TESTING

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.org. 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

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.

Section 38 – KAISER AND EMPLOYEES – CURRENT ILLNESS – MISSING SLUDGE CHOLECYSTITIS

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

[This section will be developed later. Check with Dina Padilla’s website for workers.]

Section 42 – KAISER AND THE MEDICAL BOARD OF CALIFORNIA

Section 43 – KAISER AND THE CALIFORNIA MEDICAL ASSOCIATION

Section 44 – KAISER AND THE DEPARMENT OF MANAGED HEALTH CARE IN
CALIFORNIA

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

More on this later.


Section 46 – KAISER AND DIRTY ENDOSCOPY – THE HEPATITIS STORY

Section 47 –
KAISER'S INDUSTRIAL CLINICS SHARE DIAGNOSES WITH EMPLOYERS

More about this later. [Oregon has finally passed a law to stop such sharing of diagnoses.]

Section 48 –

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.

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