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Modbee.com
Kaiser contract silence broken 

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By KEN CARLSON
BEE STAFF WRITER 

During almost 11 months of negotiations, Kaiser Permanente and Memorial Medical Center kept quiet about the main issues keeping them apart. 

That changed on Monday. 

Kaiser officials disclosed there were two crucial issues in the talks: Memorial wanted a condition to terminate the contract if Kaiser sought to build a hospital in Stanislaus County or a neighboring county. The hospital also wanted a triple-digit percent increase in reimbursement rates. 

"While (the termination clause) was finally taken off the table during our our last scheduled week of negotiations, it has clouded every area our discussions," Kaiser said in a written statement Monday. 

After Kaiser broke the silence, Memorial Chief Executive Officer David Benn responded that the main issue was Kaiser's unwillingness to pay what other health plans are paying for care. 

Starting today, Kaiser's hospital network changes for its 88,000 members in Stanislaus County. 

Patients will be referred to Emanuel Medical Center of Turlock, Stanislaus Surgical Hospital of Modesto or Dameron Hospital of Stockton for nonemergency care. 

People still will go to the closest hospital in emergencies. 

In addition, Kaiser members currently in beds at Memorial will stay put until their treatment is com- pleted. And the hospital's birthing center will be available to Kaiser members through Sept. 30. 

Kaiser officials said they still are considering a final proposal submitted by Memorial last week, although it would provide only for a limited number of hospital services. 

Kaiser, which has come under fire for dropping Memorial from its plan, decided to tell its side of the breakdown in negotiations. 

Kaiser officials said that Memorial sought "disturbing requirements" in a proposed new contract. 

Memorial wanted to be able to terminate the contract within 180 days if Kaiser notified the state of an intent to build a hospital in this county or an adjacent one. 

The proviso was unacceptable because Kaiser intends to build a 200-bed hospital in Modesto to relieve a shortage of hospital beds, said Toni Flores, Kaiser's county director of health plan operations. 

"We have to ensure that we have a plan in place for members," she said. "We cannot continue with an uncertain delivery system." 

She also said the "massive" rate increase Memorial proposed would have to be passed on to members and would take away funds needed to build the hospital and a medical office complex in Modesto. 

Benn replied that the 180-day termination clause was an old issue. 

He said it initially was raised in the context of the contract that expired Monday night, which gave Memorial exclusive responsibility for caring for Kaiser members in the county. 

If the exclusive arrangement were to end, he said, Memorial initially wanted a short termination clause. "The 180-day termination notice is definitely off the table and has been for some time," he said. 

Benn said Memorial has sought fair compensation for serving a Kaiser membership that has grown steadily. The former contract paid the hospital a flat monthly rate for each Kaiser member, whether or not they used the hospital. 

At times when the hospital lacked capacity, Memorial had to pay other providers for treatment of Kaiser patients. 

Benn has said that Kaiser notified Memorial in 1999 of its intent to end the contract. In the recent negotiations, he said, Kaiser has sought a new contract providing only for emergency and other selected serv- ices. 

At the end of a final negotiating session Wednesday, he said, Sutter officials were left with the impression that Kaiser would not counter their offer. Kaiser officials said they're still analyzing the proposal. 

In the past several weeks, some politicians have urged the parties to compromise. State Assemblyman Dave Cogdill, R-Modesto, offered to serve as a mediator and said he was turned down. 

Modesto Mayor Carmen Sabatino sent both sides a letter Friday saying their failure to agree "has resulted in the citizens of Modesto not receiving the quality health care they deserve." 

"Financial motives are important," he added, "but the good will you are losing among the citizens of this city will be difficult to regain." 

Kaiser officials said the other hospitals are prepared for the increase in patients. Some Modesto physicians have said they can't travel to the out-of-town hospitals, so Kaiser has provided hospital-based physicians to take over their care, Flores said. 

"We touched bases with Emanuel and Stanislaus Surgical center (on Monday)," Flores said. "They are ready, and we are excited. Our best testimonials will be from our members when they start to receive the friendly care at these other facilities." 

The Bee is interested in talking with Kaiser members who are concerned about how the change affects the quality of their health care. Contact Bee staff writer Ken Carlson at 578-2321 or kcarlson@modbee.com.