Early in the 1970s Paul Ellwood, MD
proposed a way
out of the Medicare budget crisis. He suggested that the federal
government turn to the prepaid health plans to control costs. To do so
it would be necessary for the government to catapult these insurance
plans from minor to major health care players. For the purpose of new
legislation, these prepaid plans were renamed "health maintenance
organizations" (or HMOs). The newly coined HMO term had (at that time)
The HMO Act of 1973 - thus designed, debated,
passed, and signed (mostly out of the news due to prominence of the
Watergate Hearings) - changed the face of health care. State laws
restricting development of HMOs were overridden, federal grants were
given for HMO startups, and employers with more than 25 employees were
required to offer both a closed panel HMO and an open panel HMO among
their health plan selections for employees whether or not the employer
thought any of the HMOs were any good. The playing field was tilled
away from private, personal physician care called fee for service under
indemnity (not prepaid) insurance. In fact. Dr. David Lawrence (former
CEO, president, and Chairman of the Board of Kaiser) has described the
personal and independent physician as an archaic lone eagle flying
about in the canyons of the past.
about 1986 the federal ERISA bill elevated the
health plans to the level of diplomatic immunity from legal suit, the
only US industry so protected. This greatly lowered the risk of HMO
suits and represented the removal of patient rights. The current bill -
called the Patient Bill of Rights and now delayed in a Senate-House
Joint Conference Committee - is really about the restoration of patient
rights removed in 1986.
health plans brought with
them the predictable risk that the involved physicians might start
withholding health care to make a profit within this new system.
Physicians' costs (including their offices) are about 20% of the health
care dollar, but the physicians normally order the other 80% of the
health process. Physician groups could, therefore, get paid 30%, for
example, of the old budget total (increasing their income by 50% of
what they were then making before), if they could reduce the ordering
of tests, medications, outside referral, and hospitalizations to 75% or
less of what was previously utilized for these purposes. And the
government would also get a portion of the savings in the form of a
slower expansion of Medicare.
But the cutting of
care might quickly go beyond
supposed efficiencies of pre-planned delivery of services and evolve
into a clever method of defrauding seniors and other dependent patients2 out of their
right to fair and honest medical testing and thereby diagnosis and
treatment. And those most clever at the process might organizationally
rise quickest to the top. And such leaders could end up defrauding the
government because it is only the illusion of care
that is being purchased through the government, because it would be
only the illusion of care that was being subcontracted and purchased on
behalf of citizen patients.
before a judge in Oakland in
Timmis v. Kaiser - is an example of this new cleverness of cost cutting
in that the patient, usually a senior, is asked to split their pills
(thus into uneven pieces) and be satisfied that such an approach
represents good medicine.3
One of my patients was asked to split three different pills at the same
time, and the pill splitting system is about as "voluntary" as
Kaiser has made some 500 million dollars from this medication game.
Kaiser care is fraudulent at nearly every level:
- 1) the advertising illusion that doctors are
salaried and not for profit and are ready to spend appropriate time
- 2) the press releases about
quality care (in
contrast to the physicians almost never allowing time to read outside
records of past patient care),
- 3) the
purposeful failure of the Permanente
physicians to write diagnoses in charts and track patient problems
carefully thus resulting in patients being unable to participate in
testing and treatment decisions,
- 4) the general
attitude that most patients fall
among the "worried well" and deserve few tests and few medications,
- 5) the idea that only one organ system should
be treated at a time,
- 6) the failure to admit
chest pain patients in
- 8) the sending home of
stroke patients from the
- 8) the withholding of testing, and
- 9) the under treatment of disease in early
- 9) the race to call disease "end
stage" once it
is found., the latter term allowing Kaiser to tap into new federal
This report, herein,
focuses on this issue of
fraud through a narrow but symbolic sampling - the HMO style of patient
testing. One HMO in particular. Kaiser Permanente - the largest
HMO in the country - will receive most of the attention. That is
because I worked within the system for eighteen months (notice my ID
card at the front of this report) and then read about its internal
methods for the next four years leading up to the present time. As the
Mother Ship of HMOs, Mother Kaiser - a self-named title - highly
influences the practices and ethics of the copycat clones of those in
close but synchronous competition.
Permanente and its many HMO rivals have
tried to advertise that they offer legitimate sick care (see sample
Kaiser ads and postings - Exhibit 1)
and then only deliver mostly well care, the latter an entirely
different and ninety percent cheaper goal. With the puffery of ads and
the senior hook of low cost medications, the elderly patient is invited
into a complex system of supposed care in which there is expected to be
the patient to physician relationship. But the professional
model is discarded in favor of a business model ("customer" to
(See also Exhibit
2 about "external customers" to go along with Footnote 6).
Finally, the patient who is damaged
and depressed by poor treatment is faced with mandatory arbitration,
malpractice award caps (California's MICRA caps on malpractice awards),
and federal ERISA HMO protection barriers. If the care received has
little to do with the quality boasted in the HMOs ads, the chance for
redress is minimal and very rare.
Kaiser Testing Theory
Within the official Kaiser
there is a keystroke option to go to Permanente Medicine. This portion
of the website is particularly controlled by the physicians - groups
that supposedly negotiate with the Plan annually at arm's length but
who also sit in on meetings and have veto power within the Plan at many
levels. [The groups are called Permanente from the small stream that
flows during all seasons in the San Francisco peninsula city of Los
Altos where Henry Kaiser got raw materials for cement. The term
Permanente Physicians was used - rather than the term "Kaiser
Physicians" - so that the doctors could avoid the option of appearing
like employees of the industrialist.]
this Permanente Medicine section of the
Kaiser Website is the option to explore the official journal of the
physicians called The Permanente Journal. (Sample front page - Exhibit 3).
This journal goes out every three months to every Kaiser physician -
part time or full time - without charge. It has some general medical
articles, the best ever perhaps being on the topic of hemochromatosis.
But the Permanente Journal is primarily used to direct the activity of
the Kaiser physicians system wide, and it is thus of little interest to
clinically oriented physicians nationally. It is an important source of
doctrine - for anyone studying Kaiser - on Kaiser culture and methods
used to watch and "benchmark" physicians.
journal's idea of humor, for example, is
reflected in a cartoon (Exhibit 4)
trying to joke about the reasons for keeping long lines. In fact, the
founder - Dr. Sydney Garfield - invented the term "the economy of
shortages," as if underfunding was an purposeful goal. This attitude
helped him to personally pocket $250,000 during the worst four years of
the depression while running his little hospital - the "Contractor's
Hospital" - where he experimented in cutting corners for physician
One relevant article to this report in
Permanente Journal focuses on the theory of testing at Kaiser (See Exhibit 5).
Here the author tries to suggest the strange theory that you only need
to order a test if there is a 50% chance of the patient having the
This is an overall downgrading of professional curiosity from what
would be more likely the community standard of ordering tests, e.g. to
look for illness when there is a fairly small chance of illness with
the goal of early diagnosis - real health maintenance.
the case of TB, AIDS, B12 deficiency,
hypothyroidism, and others, the normal standard is to order the test
even if there is even less than a 1% chance because lack of early
treatment can be so pathologically devastating. Yet, this article is a
general encouragement across Kaiser to do as little testing as
possible. [Kaiser has gone in the opposite direction of its 1968
approach of multiphasic testing in the interest of discovering disease
- the HMO apparently found too much disease.]
III. Cardiac Stress Tests
EKGs are abnormal or chest pains are not well
explained, the next step is often to proceed to an exercise stress test
to look pro-actively for cardiac disease under controlled situations of
maximal exercise. This type of test seems too mathematical for HMO
physicians to under-read.
Most people believe,
therefore, that - if they
undergo a cardiac stress test and the doctors say it is "unremarkable"
at the end - that they, therefore, do not have heart disease. But at
Kaiser there is often a deliberate attempt to call slightly positive
stress tests "unremarkable" so that patients will not know that they
have coronary artery disease.
The example can be
seen in Exhibit
#6 where a positive test was read as "unremarkable." A
second, and more positive test on the same patient, was also read as
unremarkable. There was no effort to pursue higher testing. The patient
ended up suddenly dying with a positive autopsy for treatable coronary
artery disease. He was still on antacids at the moment of death,
entirely unprotected from a (diagnosed, but undisclosed) lethal
The family of the deceased patient
$600,000 for the mistake Kaiser made on then two different stress
tests. Within the Kaiser patient's sudden death there were both the
issues of medical malpractice and loss of family income plus
companionship from the patient who died in his 40s. The outcome of the
case, however, got buried by Kaiser after the pre-arbitration, sudden
settlement. [And so the pattern of deceit gets thus buried as well,
just as Firestone and Ford suits were buried early on. California comes
close to passing each year a halt to the burying of arbitrations that
might reveal risk to others, but the political will is not there to
turn it into law.8]
So Kaiser has been able to change the
definition of what is a positive stress test!
is a form of organizational self-anointing,
to believe that as a 20 billion corporation that they have achieved the
right to redefine medical science.
patients can be misinformed about
the test outcome and end up with cardiac injury and the risk of a
drastically shortened life span. But this misleading of patients - as
to what is wrong with them - violates the patient's most basic right to
know his or her diagnosis.9,
It voids the promise by Kaiser that decisions will occur jointly
between patients and doctors.11
The first health right is to be treated with dignity. The second health
right is to know your diagnosis.
also voids this right by avoiding
diagnostic terms in medical notes. While this is a violation of state
law, no one seems to be auditing this behavior. I suppose it is good
for Kaiser's legal position to stop diagnosing so as to avoid
diagnostic error, e.g. one Kaiser ER physician simply writing "MVA"
(motor vehicle accident) as the diagnosis after a trauma workup. But
this is the opposite of good medical care in which almost all
diagnostic possibilities are shared with the patient. It is also a huge
fraud on the government as this fundamental chart features is left out
and yet billing goes on as if the care is complete.
IV. Compete Blood Counts (CBCs)
blood counts -
The value of the normal white blood count (WBC)
should not shift in any particular hundred years. But Kaiser alters
what is normal. See table below.
This table shows that in 1995 Kaiser physicians in Southern
California were using the normal range of white blood count to be 4,800
to 10,800 (Exhibit
7a). Then, by 1998, Kaiser physicians in Southern California
was using the normal 4,000-11,000 (Exhibit 7b).
The same Permanente Group kept this white blood cell count
into 2001 (Exhibit
7c), and presumably also at this time. This would mean that
on the low side, white blood cell depression from a chemotherapeutic
agent would not be noticed as early as before. And on the high side,
bacterial infection would not be caught as early.
the Permanente Medical Group, Inc.
(TMPG) in Northern California got even more aggressive and changed the
normal value of the white blood count from 3,500 to 12,500 (Exhibits
Fewer low and high white blood cell reactions would be caught by this
Meanwhile, other hospitals
outside of Kaiser, like
Victor Valley in California, have chosen not to alter human physiology
and to continue to use the 4,800 to 10,800 range. (Exhibit
The difference in hemoglobin levels - the oxygen
carrying capacity of the blood - from Southern California Kaiser to
Northern California Kaiser is equally interesting among the same
exhibits. In Southern California the range of normal hemoglobin is
14-18. In Northern California the range is 11-15.
Thus fewer anemias will be diagnosed in the Northern region of the HMO,
the one with the Kaiser physician stock value of $10,000 per share and
dividends per doctor perhaps $80,000 per year average.
- see Exhibits
7h and 7i
- the normal ranges are more clear and less manipulated. Health
"maintenance" must not be allowed to be turned into illness
non-recognition. Too many illnesses are not caught early in this
second, Kaiser approach (like the subtle anemia of a right sided colon
and too many people can get hurt.
A common blood panel order in
is called a metabolic or renal panel. It measures the balance between
the electrolyte - sodium, potassium, chloride, and bicarbonate as well
as the renal function of BUN and creatinine, since the kidneys maintain
the balance through retaining or excreting the electrolytes. The BUN
and creatinine represent constant metabolic byproducts that go higher
if the kidneys are not working well and able to excrete them.
One would expect that the normals of these values
would have been determined many decades ago and never be subject to
variation. And yet there is variation among different Kaiser units and
as contrasted to the private community. SC will mean Southern
California Permanente Medical Group (a
for profit partnership). TPMG will refer to The Permanente
Medical Group, Inc. (a for profit corporation) representing
Northern California physicians. [Kaiser
tried to merge the two groups, but under new CEO leadership they are
again more separate].
The higher setting of creatinine 1.5 at TPMG -
Northern California Kaiser - means that renal disease will be caught a
little slower than in other locations of California. (Exhibit 8).
Nationally (recheck attachment 7h)
the creatinine value is clear - with a top normal reading of 1.2. That
small difference can lead to an error, e.g. when a radiologist is
deciding whether or not to hydrate a patient before a cardiac
angiogram; receiving word that the patient has normal renal function,
the radiologist might skip hydration and send a patient into dye
related renal failure. Similarly, diabetic renal disease will not be
spotted as early.
VI. Lyme Disease Testing
Lyme Disease is caused by the B. burgdorferi
organism that is introduced into patients by the tick bite. (See Topic
Introduction - Exhibit
9a.) The organisms double in number every day but are not
detectable by blood tests until there is a large distribution of
organisms in the body. And since the organism spends much of its time
within the cells of the patient, the serum markers miss many of the
cases. The best chance to diagnose the illness and start timely
treatment is for the physician to be interested, inclusive, and ready
to move into treatment without restraint. But Kaiser - located in the
Lyme endemic state of California- is often disinterested, exclusive,
and ready to move patients into untreatable categories of illness.
About 12,000 to 15,000 cases of Lyme disease are
reported each year in the United States, mainly in the Northeast and
North Central parts of the country and in parts of California. If
undiagnosed and/or untreated it can lead to arthritis (especially the
knees), numbness or paralysis (especially the facial muscles), problems
with heart rhythm, and problems with memory or concentration. A good
over view of Kaiser's approach is supplied by Miguel Perez-Lizano in Exhibit
Kaiser's approach to Lyme's disease
is to found in
its protocol of treatment (Exhibit
9c), now hidden away from the public eye like most all of its
treatment guidelines. It is clear from studying the Kaiser Lyme
protocol that the ELISA test is used for screen (first chart) and the
Western Blot (second chart) for positive diagnosis. To best see this
one should follow the two flow charts of decisions. The expensive
Ceftrioxone IV is reserved only for third degree heart block, proven
arthritis, and proven CNS problems from Lyme.
protocol suggests that the ELISA test "has a
sensitivity of 94%." But in Kaiser's Permanente Journal article (See
5 - the graph on Lyme Disease.) The Kaiser chart shows that a
greater number of patients are missed by depending on lab tests.
Kaiser's problem with aggressively treating
suspicious cases of Lyme disease is the cost of long term Rocephin
(cephtriaxone), an antibiotic given either by the intramuscular or
intravenous route. The individual patient deprived of Rocephin and
suing Kaiser under the arbitration system with records being altered
has little chance for justice despite cardiac or nervous system damage.
The best approach to Lyme Disease is that
published by Sam T. Donta, MD, Professor of Medicine, Divisions of
Infectious Disease and BioMolecular Medicine, Director, Lyme Disease
Unit, Boston University Medical Center- 1-617-638-6017. This summary
report is found as Exhibit
9d. Dr. Donta - on page "6 of 13"- explains that the
two-tiered system of testing [which Kaiser is using] came out in 1994,
but "over 75% if patients with chronic Lyme Disease are negative by
ELISA." Thus to use it as a screening test is ridiculous. A positive
Western Blot test with a negative ELISA test is considered a positive
test; but Kaiser excludes these patients.
Donta recommends four weeks for the initial
treatment of possible Lyme disease. Kaiser recommends three weeks. Dr.
Donta recommends 12 months of antibiotics if the
disease has already had 12 months to develop.
for ceftriaxone use for one month in proven
cases followed by two months of oral doxycycline was too short for
proven illness according to Dr. Donta. Kaiser, instead, concedes that
maybe two weeks of ceftriaxone is too short, and four weeks should be
used. Kaiser also suggests that placebo (sugar pill) use helps 35%,
thus inviting the physician into an area of deception.
Kaiser pattern is clear: under testing and
under diagnosing. This comes through as one reviews individual patient
stories - see Exhibits 9e,
And in one patient's case an arbitration judge
agreed that Kaiser had missed Lyme disease but was puzzled about
liability if the pediatric neurologist - who assured the adult patient
she did not have Lyme disease and did not need an infectious disease
referral should be held to the error. The patient had asked for an
infectious disease consult and that was refused. Certainly, a pediatric
neurologist should not be screening for difficult to diagnosis adult
conditions. (See arbitration outcome - Exhibit
9h; the patient would be lucky to get $25,000 after legal and
As patients with untreated Lyme
become disabled and fall into a governmental category of disability
which triggers Medicaid and then Medicare, Kaiser does not, once again,
have to pick up the cost of its failure to diagnose. Instead,
the government does. This is also true of "end
stage" emphysema, heart disease, renal disease, liver
Transferring risk back to
is a favorite tool used to maintain Kaiser organizational profit.
VII. Anthrax Testing
after Kaiser missed an anthrax diagnosis in a
postman in Maryland - despite his asking the nurse
practitioner to be checked for anthrax - the huge HMO tried
to take the public relations offensive and featured on its website the Kaiser
anthrax testing and treating criteria. This was unusual
because Kaiser generally treats its testing protocols as top secret
The HMO said that it had
worked out the criteria
with Johns Hopkins School of Public Health (the same program which
graduated Dr. David McKinnon Lawrence some thirty years earlier).13 There was
also the suggestion of collaboration with the CDC.
I did a comparison of the Kaiser criteria and
the CDC criteria (Exhibit
10a) and noticed some dangerous deficiencies in the HMO
version. The patient, for example, should only be taken seriously if
having 9-1-1 level symptoms. This is a big mistake since Anthrax will
cause only moderate symptoms before catastrophic collapse. It is a
disease of the mediastinum (middle of the chest) more than that of the
lungs - which is why the CT scan is so much better than a chest x-ray
and providers should not wait for shortness of breath. By the time the
patient is at the 9-1-1 level of symptomatology, it is generally too
late. Also looking for low oxygen is not a screening tool for Anthrax
The Kaiser criteria were, luckily, not
the gold standard of care despite the websites hopes to imply that
such was true. In fact, the website topic - if accessed by physicians -
was turned into a recruiting tool for Kaiser in California even
picturing a view of the Bay Area similar to that enjoyed by Dr.
Lawrence up in the hill in Piedmont. (Exhibit
10b.) Perhaps the idea was that Kaiser could be an escape
route for those doctors not willing to interact with the East Coast's
bioterrorism issues. East Coast urban residencies - particularly for
those doctors from other countries - is a common recruiting area for
relocation to Kaiser. Help with getting a new home loan in California -
which is later partially or completely forgiven - is part of the pitch
The Anthrax approach of Kaiser was an
once again, of using an under testing strategy to keep costs down.
Luckily, for Kaiser patients in particular, the threat of Anthrax has
been temporarily contained. But Kaiser will be picking up some day the
legal fallout from missing a case where the patient came in with the
request to be checked for an illness highly tied to his occupation -
working with mail bags at the Brentwood facility.
Blood Clotting Studies
One Kaiser patient suffered
first a venous clot in
his right leg and than later an arterial clot. Kaiser assured the
family that all clotting studies that were useful had been done, that
the patient had no definable clotting disorder. The patient went on to
lose his leg.
Only in later testing by Stanford
was the correct
clotting defect - one actually causing excessive clotting - found and
the proper high dose of Coumadin given. New clots stopped occurring.
Kaiser confused the issue at arbitration arguing
that the problem was the smoking related Buerger's disease, even
thought that disease is about peripheral clotting. But since Kaiser
spoils the chart evidence, judges have an easier time awarding little
or nothing to patients.
[Kaiser is the largest
payer to retired judges in
California. The idea that such arbitration judges are truly neutral
under such a situation is highly questionable. The patients do win
about half the time - if they can survive the many challenges - but the
awards are often so low that the patient gets nothing, e.g. facial
nerve damage due to surgical error with permanent shoulder sag and
terrible pain (damage award $30,000) or knee of a repairman wrecked so
that career lost (damage award $15,000) or a Kaiser pedophile
endocrinologist physician masturbating a diabetic child on every visit
(award only $50,000). ]
IX. Chest X-rays
saves money if its x-ray departments do not
pull up old x-rays for comparison. It can accomplish this simply
through impossible workloads. The Kaiser radiologist trying to show a
"report card" of efficiency will read through as many x-rays as
possible without old films.
When the x-rays are
read, the standard of
describing the heart, the lungs, the rib pattern, etc. is often changed
to the simplistic word "normal." The idea is that the less the patient
understands about abnormalities, the less interested the patient will
be in asking questions at the next visit. And most symptoms can be
funneled into fibromyalgia and the stress symptoms of the "worried
This pattern of ignoring old films lead
patient to untreatable lung cancer, the type that is not smoking
related. Careful viewing of successive films would have caught it
earlier. Such careful comparisons are not part of the HMO business
Similarly, in the case of another patient,
outside x-ray (
Exhibit 11a) showing a key respiratory diagnosis was sent
with the patient in March of 1999. By the next x-ray -just one day
later - the radiologist said that there were no old x-rays for
comparison (See exhibit
11b). The outside x-ray was lost just that quickly. The
patient went on to have serious heart problems from under diagnosis.
The general pattern of ignoring early symptoms of
cancer - "give the cortisone a chance" - spills over into under reading
disturbing x-rays and then suddenly finding the cancer everywhere later
on. Or there may be simply no x-ray taken at all when the symptoms
would have demanded it. In Exhibit
11c, I (a former Kaiser physician) and co-author Romana Eagen
(a former Kaiser patient) dramatized a real missed cancer case in
preparation of a book on managed care (mostly Kaiser).
scans utilize a $1 million machine. And MRI
machines cost at least $2 million. Pure efficiency of care management
would lead to using the machines around the clock to maximize the cost
But there is another approach - to
put barriers in
front of the physicians. When I worked in the Kaiser emergency room,
the then Chief of Radiology told me that I could not order a CT scan of
the low back from the emergency room location without first getting the
permission of the physical medicine director.
So I called the physical medicine director only to hear that the need
for his permission was not true.
So as an hourly
physician, I was subject to the
tricks of the for profit partners. Generally I had to threaten their
licenses with the Medical Board to get their attention. [It is now my
belief that the California Medical Board has brought on a
disproportionate number of "experts" from the Kaiser ranks and the fear
by the Permanente partners of license challenge is minimal. Kaiser is
so large and its physicians so politically positioned, that the Medical
Board can be turned into a weapon to quell Kaiser whistle blowers.]
On another occasion the same radiologist tried to
stop me from ordering so many head CT scans by saying that he would not
give me the CT readings results in any convenient fashion. I told him
that he would be hurting patients waiting for results and occupying ER
rooms as well as those in the lobby who were having to wait six hours
just to be seen. Once again I threatened his license, and he reversed
his decision. It took me three complaint letters to get him fired as
head of radiology.
Some MRI's have the purpose of
ligaments. The MRI of the knee, for example, is used to check the
cruciate ligament and meniscus ligament tears. Thus any MRI should
describe both. In the Kaiser Santa Rosa this service is contracted out
to a physician group; those physician do not even bother describing the
cruciate ligament (Exhibit
12a). The actual Kaiser reading is thus downgraded from the
real damage of the knee - see a better, private report in on the same
12b. The latter report turned up too late to be used for the
XI. Biopsies for Cancer
biopsies would seem to be incorruptible.
Almost all cancers are staged by cell type under the microscope and
staged body distribution by CT scans. These are then reported to the
national cancer registry. So what could go wrong?
patient whose records I know well went in to
Kaiser for a salivary gland area growth. During surgery the Kaiser ENT
surgical resident went too deep for the unnecessary removal of a lymph
node and clumsily cut the patient's accessory nerve. This patient now
has a sagging and painful shoulder and will have this for the rest of
her life. During the arbitration. Kaiser said that they had lost track
of the Kaiser resident. In reality he was simply employed by Kaiser
across the Bay, only a single keystroke needed to find him. There is no
penalty in California for hiding percipient defendants.
patient was told that she had a cancer of the
gland. But the staging was not consistent in the Kaiser records. And
when she looked for out of state confirmation, slides were sent. But
were they hers? Suddenly Kaiser said that they were recut tissue and
that the original slides had simply disappeared.
Kaiser is not the only HMO that manipulates cancer diagnosis
interpretation. Another patient in another HMO system had an abnormal
gastroscopy. The biopsy was read as a "maltoma," a very low grade
tumor. But a rebiopsy at Stanford showed a gastric lymphoma, a more
serious problem. When the original slides were re-read, the original
interpretation was proven to be an under diagnosis. To cap it off, the
patient has a letter from the IPA medical director saying to the
patient that the latter did not have cancer at all.
patients in states highly penetrated by HMOs
cannot trust biopsy reports. And California is one of highest
penetration HMO states (See Exhibit
13). In fact, the penetration is so high that most physicians
have decided to treat every patient as if they were in HMOs. It no
longer matters what plan you have. This was noted in the report called
"The Evolution of Medical Groups and Capitation in California," put out
by the California Health Care Foundation (Exhibit
14 - Cover page and page 11). On page 11 the report offers
the following quote:
"At some point,
each of the five groups [physician
groups organized as for profit independent physician associations or
IPAs] decided to develop operational systems as if all its
patients were capitated. "
group expressed it best (on the
"Our definition of
care is capitation. We decided to begin to treat every patient as a
capitated patient. " By David Druker, MD, President, Peninsula Coastal
patient in California is at risk for
HMO/IPA strategies even if the individual has a higher cost insurance
policy just to avoid such compromising.
To score HEDIS supposed quality
points. Kaiser has
created a large program of sigmoidoscopy testing to screen for colon
cancer. [This sounds positive, but only about 70% of colon cancers are
in this final portion of the bowel; the other 30% are often missed;
full colonoscopy needs to be done more often at Kaiser.] But
to save money on the sigmoidoscopy, Kaiser has empowered nurses
to do the test including colon biopsies. The patient is not
given a choice - physician or nurse. Rather the consent is unclear and
nurse is just there as the patient is laying on the table, tilted up
for the procedure; this is hardly a moment to question who is doing
In 1997 Kaiser was non-profitable for the
year in its sixty year history. Dr. David McKinnon Lawrence, who only
directly treated patients during his internship in Kentucky and never
thereafter - created the Pathway for Recovery 2001. Within this secret,
internal plan, many physicians were asked to retire. (See Exhibit
15a.) The remaining physicians became more like team leaders
for other, lesser trained practitioners (See Exhibit
15b). Orthopedists would often be matched up with three nurse
practitioners, one bragging in an ad that he and three nurse
practitioners could handle a pool of 24,000 enrollees. Family
physicians were asked to let nurses perform many new tasks,
e.g.changing insulin doses rather than teaching patients how to follow
the physician orders.
In fact, the whole Kaiser
system is about everyone
practicing just past their training. The State of California found
Kaiser "service partners" (janitorial housekeepers) being asked to
answer emergency call buttons. Nurses were and are empowered to do
colon biopsies. Nurse practitioners are asked to make orthopedic
decisions, even on knee ligaments. Pediatric neurologists are asked to
see adults as well. General surgeons are asked to do pediatric surgery.
Each patient being forced into arbitration ends up
trying to question the judgment at the moment, the latter represented
by Kaiser as some "contractor's" bad day. So if a nurse made an error
in a colon biopsy, there would be a covering physician nearby and the
patient none the wiser.
XIII. The Permanente Culture
understand the thinking that goes into the
"Permanente Culture" that creates these strange ethics, the interested
reader needs to study two Kaiser produced materials."14
One is a book Can Physicians Manage the Quality and Costs of
Health Care?, also called The Story of the
Permanente Medical Group, by John G. Smillie, MD, a retired
Kaiser physician manager. For future references, I will call this The
Kaiser Story book. The other Kaiser production is a
corporate overview published by Kaiser called "The Permanente
Map" (also "Permanent Medicine: Navigating a Course to Our
Sustainable Future"). This is shown in Exhibit
16, somewhat enhanced for better color contrast.
referencing the Kaiser Story book and the
Permanente Map, the interested reader can piece together an
organization which approaches cult status. In fact, one of the
requirements at Kaiser is that the physician cannot work elsewhere;
this rule is said to be because of "malpractice" insurance concerns15 but is really
about insulating the physician from the standards of care in the
The Kaiser Story
book - The book begins with a focus on "group
practice." This seems obvious for Kaiser, but it really means a "group"
ethic in which each physician must weigh every patient decision against
the partnership profit of the other physician. In fact, the "genetic
code" (page 99) of the Permanente group is prepayment, group practice,
adequate facilities, and "a new economy of medicine." While the "new
economy" started out as an emphasis on prevention, it drifted by 1967
to a new era when "health" would "no longer" be "something
that doctors gave patients, but as something that healthy members
maintained for themselves through a healthy lifestyle."
This change in construct meant, thereafter, that
patients with less than perfect lifestyles were to be short changed on
care. And further that Kaiser would become expert at blaming as many
conditions on life style as possible. This latter blame reduces the
patient's self esteem and will to fight for proper testing.
But the Kaiser ads give no such indications of
such treatment. Rather the ads ask everyone to trust Kaiser (See
numerous examples in Exhibit 1).
Kaiser also (on page 211 of the Story book) emphasized that many
patients were and are simply among the "worried well." This meant that
testing should be spared on such individuals. And, as further
guidelines for the new Kaiser physician, "the well member became an
asset, the sick patient a liability" - (see page 255). Dr. Sidney
Garfield, the physician founder of Kaiser, also taught "the economy of
shortages" as if purposely under-financing was good policy.
the most disturbing issue - to the
Hippocratic Oath promise held out by the Western physician in the white
coat - is that in Kaiser by the 1950s it was clear that "the individual
physician was the profit center." Thus the physician was the
combination of accountant and gate keeper.
statement that physicians are not second
guessed by accountants really means that they are, instead, all trained
and pressured to be their own accountants; and, they get benchmarked or
graded to make sure they do not do otherwise. Monthly meetings are held
at each Kaiser facility to compare business score cords and embarrass
those who are too generous with medical care. And Kaiser did not and
does not keep those physicians who were or are unclear about this part
of the Permanente culture. "Physicians who created more than their
share of unnecessary expenses ... were encouraged to leave the Medical
Group." (Page 177.)
- This is the only document I have seen
that tries to summarize corporate goals and challenges of Kaiser
Permanente. Although primarily an internal, motivational graphic put
together by the Grove Consultants (advertising specialists) for Kaiser,
a faded copy of the map got placed in the Permanente Journal.
I believe that the fading of the copy was meant to deter those from the
outside studying the details within, just as important patient records
are light copied when they might hurt Kaiser legally.
map begins on the left side with the "group
ethic." Kaiser physicians understand that this replaces the Hippocratic
Oath and elevates the partnership over the best interests of the
patient. If pressed, Kaiser will spin this into the idea that the
"group" means those marginally financed patients who are able to join
Kaiser due to low premiums; Kaiser will express this as a gift from the
older generation to the younger generation with all patients happy with
the compromises involved. But the "group" is really the senior
physician partners, both active and retired, in need of a high cash
flow to fund yearly profit distributions and future retirement bliss.
Then the Permanente Map - displaying historic
beginnings left to right - wanders through the early clinic/hospital
phases as Kaiser developed as a Contractor's Hospital for the LA
Aqueduct project and the Grand Coulee Dam. And Kaiser has always been
employer friendly, and employee brutal.16
Lake Tahoe is next featured with the home of Henry
Kaiser, as if the
only house on the lake. This is shown to remind physicians of the
of the Tahoe Accord that spelled out hospital/physician split of profit
-the 50:50 split. This arrangement has not changed in sixty years but
hidden from public view. I doubt that one patient in the whole
Kaiser system understands that the refusal of MRI tests results in half
of the saved money from not doing the test flowing back to the same
as unspent premium dollars sitting in risk pools and called "profit"
The rest of the map shows Kaiser's
double speak style:
1. "Partnership" is about the
profits of senior
and junior shareholders
2. "Care Teams" is really about less not more
involvement with patients, a retreat to physician coach status;
3. "Group capitation" is about the prepaid monies that each physician
must try not to spend;
4. And while the licensed "doctor patient relationship"
is mentioned, the unlicensed "Permanente patient relationship"
more of a constant issue - see one spoke of the steering wheel in the
of each Permanente group ship.
Note also the
crossed triangles on the right side
of the Map emphasizing
the distributive group ethic being more prominent than the individual
ethic. The whole effort is to distant the doctor from the patient - and
any professional covenant learned in medical school during the white
ceremony - as the key to getting to the "KP Promise Land" of
Capitol" [and retirement monies called "Our Sustainable
Interestingly, "For Profit"
is ridiculed as a
"Siren" of "Greed." There
is, again, the attempt to make Kaiser physicians look only salaried.17
Actually the profit percentage of senior Kaiser physician partners
probably top others in the state if ever disclosed. At times when the
is in Kaiser long enough, it exceeds the physician's regular salary.
The limitations of lab tests and alteration of the
normal limits of
testing in many areas - so as to result in less disease being found -
these principles as part of "Group Responsibility." And the individual
physician print out every three months of how Kaiser is doing on the
side (unspent risk pools) is enough to substitute as its own siren of
toward the year end enrichment. If the physician is "group suitable,"
wealth is soon to follow. [But is it green (honest) or red (fraudulent)
And, as for the "evidenced based
is another illusion. Kaiser physicians review national guidelines for
apparently paying a license fee to the National Clearinghouse - and
then Kaiserize them into a downsized version. For example. Kaiser gives
the impression in its Diabetes CPC (Clinical Practice Guideline) that
the rest of the world is turning back toward the 1970's diabetic pill
Tolinase, now dirt cheap. But the PDR suggests that this medication
takes more monitoring in the elderly than some of the newer medications
because it lasts into the night when it can drive the sugar of the
patient too low. Kaiser uses Tolinase a lot; Stanford University
pharmacy, in contrast, believes that medicine to be more of a museum
curiosity and is not particularly into pill splitters.
Kaiser patient in the Bay Area of
Northern California was told that he had diabetes and then was begun on
Tolinase. In fact, he had to split a larger pill into two unequal
halves. He had nausea and vomiting from the medicine. Then he was told
it would take six weeks to get in to make a medication change. When he
went in to the clinic, he was told that he did not have diabetes after
all. If the disease cannot be treated cheaply, it is time to
remove the diagnosis.
has tried to hide its Clinical Practice
Guidelines from non-Kaiser physicians. That is because if the
guidelines are compared on the outside, they will reflect the cheapness
and not the science that has been introduced. Finally, after a two-year
lawsuit. Kaiser has agreed, in 2003 to share the guidelines on its
website. To date it has not done so. The reason for this is that these
documents have been manipulated or Kaiserized away from the standard-of
care endorsed by the national specialists in the same field.
XIV. Not Reviewing Outside Records
way to save money is to ask patients to sign
for the transfer of old records but to never read them. I have yet to
see where a Kaiser physician has read any outside record carefully.
Instead, such records are simply filed in case someone might want to
review it. That means that all of the past abnormal testing is almost
always ignored. This is a huge loss to patients transferring in to
Kaiser. Lack of record sharing creates a huge loss at the other end as
patients leave Kaiser. The state's concept that medical systems and
patients share 50-50 ownership in California is not respected in the
state's largest HMO. But the state would, apparently, rather benefit by
Kaiser's low cost than police its poor behavior.
Patients as "External Customers"
The overall view
of the patient in Kaiser is that
of a dis-empowered "External Customer" waiting in line. In the brochure
shown in Exhibit
17a, this attitude is graphically displayed. In contrast, in
the same document, the staff in Exhibit 17b looks bright and attentive.19 And the
drawings do reflect the attitude.
emergency room I worked in with Kaiser, I
heard for the first time the phrase "therapeutic waiting." The joke was
that the excessive waiting times perhaps six hours just to start to be
seen by a physician - test to see just who is really ill. Actually,
the most ill leave first, as they cannot physically endure sitting so
XVI. Physician Total Income
typical Kaiser emergency physician at a partner
1. $15,000 a year as a base;
2. A benefit package that is probably worth 25% more;
3. Signing bonuses (I was offered $30,000);
4. A corporation/partnership dividend of about $72,000 for the
profit of not testing or treating patients at community standards - so
$6000 a month accrues;20
5. A great vesting package for money at retirement;
6. Achievement bonuses,
7. Moving benefits including home loans which appear to be partially or
totally forgiven over time;
8. Decreasing work load over time.
physician managed to create a $ 1
million private art collection off all the monies pouring in. (See
"Kaiser's dirty little secret" - Attachment
#18). The corporation dividend to physicians - item 4 in the
above list - is Kaiser's biggest secret. It should be a warning forced
onto every Kaiser ad, like the cancer warning on a pack of cigarettes.
of the rights spelled out is within "Your rights in a Medicare Managed
Care Plan" page 46 of Medicare and You - 2001 by HCFA (now HHS).
"You have a right to know how your
pays its doctors. "
may be the most frequently violated medical
right in all of Medicare. It is not that HMO plans simply do not tell
about the profit splits, they - with Kaiser in front of the pack - go
out of their way to picture the physicians as simply working for
monthly salaries or defined contracts. Notice this concept in the
Kaiser press release out of Denver (Exhibit
It is time for the public
the profit sharing from
top to bottom so that can realize that the blame for poor care is split
between the HMO's "plan" cleverness at withholding broad benefits and
physician shareholders' cleverness at withholding basic care at the
and hospital level. This is a deadly combination for seniors.
Only the federal government can spell
this out for its citizens.
The public often wonders why its Medicare benefits are going down (Exhibit
20) as their costs are going up. The answer is found within
groups at the partnership level skimming off the top, particularly in
Even the groups that go bankrupt reform months later, e.g. Priority IPA
which failed and then reformed into Phoenix IPA utilizing much of the
board. Patients moving from one HMO to another achieve no escape from
this greed but rather simply a new set of faces with similar
[Actually, patients moving from one system to another generally seek no
care for three months; this is why an HMO can make money by firing one
IPA and hiring another across town. 21]
And the public would like to know the life style
of the CEO executives
at the top of HMOs like Kaiser. First, there is outgoing CEO of Kaiser,
David McKinnon Lawrence. Issues the public might want to better
Lawrence's $2,800,000 home, a reflection of his base year 2000 salary
of $2,186,384 (hidden bonuses perhaps doubling this amount);
Lawrence's relationship to Watson Pharmaceuticals - is he the same
David Lawrence who was listed as Vice President of Business
21c-Did he have part of his home loan forgiven (See"ln
Silicon Valley a new kind of house call" as Exhibit 21c).
has pledged in a published pre-retirement
interview to simply become
a health care advisor in the future rather than to actually draw profit
and salary from any health care entities. The chance of this being
true is zero. (As most Kaiser physicians finish a task - like being a
in chief of a hospital - they are pictured as disappearing into the
of retirement or change of field; then they pop up in another Kaiser
in another region, suddenly without a past.)
for incoming Kaiser CEO Halvorson, the Attorney
General of Minnesota
found in his records and that of the HMO all sorts of hidden perks and
attempts to hide these from his own staff (See Exhibit
22). Often the similarities to Enron emerge - complex and
changing ventures, self enrichment at the
top, public relation spins that keep staff and patient misinformed,
of power into CEO-President-Chairman of the Board,22
The only way to understand Kaiser is to
money from start
to finish. Occasionally a light goes on and we catch a glimpse - (See Exhibit
23 - see
the Bayer/Kaiser fraud). But, then. Kaiser seems to have the Teflon
quality that nothing sticks and the government keeps hands off. One
if Kaiser will wiggle out of the Bayer scandal. Instead, the government
should connect more dots - Kaiser - the repackaging Livermore
distribution center - Watson Pharmaceuticals - Chinese production sites
with high arsenic in the ground water - Kaiser
executives on both sides of contracts - Kaiser patient records of all
transactions stored near Watson Pharmaceuticals in Southern California
The Illusion of Non-Profit
Physicians - In its 990
filing with the federal government - a document that is made very
and very well read23
- Kaiser defines its different entities
24) as the Plan, the Hospitals, and the Contracting doctors.
It does not mention that the physicians are for profit groups. So
side to side with the "Health Plan, a California non-profit public
corporation" and the "Hospitals, a California nonprofit benefit
the image created is that the physicians are simple contractors with
public good in mind as well.24
And with California's HMO penetration
the highest in the country (See again Exhibit
13), there is little political will to make the issues
The illusion is further maintained by the
assertion that Kaiser Permanente
does not have any national stock. (See Exhibit
25). The goal is to try
to make the public believe that Kaiser physicians are just salaried
like most of their patients and thus not subject to profit from
care. But The Permanente Medical Group, Inc. is a registered
created for profit and issuing stocks (Exhibit
The enormous under-testing of Kaiser
simply a small, sample biopsy of the broad corruption of a medical
regime that is defrauding hundreds of thousands every day. The Mother
Kaiser regime is then copied by other HMO/IPA mixes, whenever Kaiser
can bypass, fool, influence, bore, or bully the regulators into playing
along; silence is the biggest ally of evil. .
regulation of health care in California just
becomes part of the pretense that health care is occurring. The
inspection notebooks all look good for the surveys (the latter run like
high school proms); but the care does not match. (I was present during
a multiple agency inspection of Kaiser and saw the games being played.
I was not allowed, for example, to see the notebooks representing the
emergency room, even though I was putting in the most hours of any
physician that month.)
The testing frauds
And those physicians not cooperating get bad report cards. Notice the
word "Report Card" on my own computer record as a Kaiser physician (Exhibit
27 two pages).
- 1) normal blood cell and
chemistry values being
- 2) normal electrical criteria being
- 3) x-rays lost or being read
- 4) infectious diseases like Lyme
purposefully under diagnosed with untreatable fibromyalgia substituted,
- 5) patient's with risk of Anthrax being shunted
to clinics rather than the emergency room,
cancer biopsies being under read,
- 7) cancer
slides disappearing, etc.
This all accomplishes the goal of
care and then delivering only well care. Those who are sick must simply
endure under-diagnosis until they drift to end stage conditions,
thereafter to fall into other governmental reimbursement categories.
Kaiser hospices abound with "end stage" illnesses that are not cancer;
and morphine dispatches those who are profit liabilities.
are defrauded; the government is
defrauded. The outcome for seniors and the poor is dismal (Exhibit
28). The profits that come out of not spending premium monies
are enormous (Exhibit
29), with a split 50% to the physicians. Kaiser does not deny
the incentive but only hides in documents - like in Exhibit
30 - the full amount. In fact, the physicians even brag about
being part owners Exhibit
The only way the Kaiser culture
will come to a
screeching halt is if the federal government actively reclaims the
billions spent on the illusion of care. And another $5 billion could be
obtained if Kaiser lost its tax status - as Intermountain Health did -
for not measuring up to the open, community health standards of the
The place for the government to start is with The Tahoe Agreement - Exhibit
31. And investigators must watch for the immediate
disappearance of documents, as the state caught with Kaiser in a
different case - Exhibit
32. When the government is ready, the places for document
seizure can be specified. And a new deck of cards can be prepared to
name those who have profited the most off the pain and suffering of
seniors, e.g. the CEOs at the top and on down to the Kaiser male nurse
who saw himself as a "closer" in home health care using unsterile
technique to hasten lethal outcome.
be required to show clearly to every
patient how physicians are paid with exact figures. Then the individual
patient is empowered to understand whether he or she is dealing with a
doctor committed to the individual oath or the partnership for profit
group ethic. When patients catch on. Kaiser has to move out of states -
Utah, Nevada, Texas, Missouri, New York, etc.
But California is Kaiserfornia, and information is spun so well and
newspapers so co-opted that one would think Kaiser is great resource
for the West Coast rather than a ethical brownout pulling down the
whole neighborhood of health care.
return bad products for refunds.
Patients only have one life to protect and unfair professional tactics
need to be understood before they begin, before the patient signs up to
become a dependent member. This is a legitimate task for government,
one formed to protect life, liberty, and the pursuit of happiness. I
hope that in this report I have given government a few more tools to
achieve such good governance.
As a Gift to Seniors and the Poor
Phillips, MD, FACEP
Former Kaiser physician [insider]
Current Kaiser reformer [outsider]
6 of 1045 The Managed Health
Care Handbook Third Edition by Peter R. Kongstvedt 1996 an
Aspen Publication: "Elwood, sometimes referred to as the father of the
modern HMO movement, was asked in the early Nixon years to devise ways
of constraining the rise in the Medicare budget.
Out of those discussions evolved a proposal to capitate Medicare
beneficiaries (which was not enacted until 1982) and the laying of the
groundwork for what became the HMO Act of 1973. The desire to foster
HMOs reflected the perspective that the fee-for-service system, by
rewarding paying physicians on the their volume of services,
incorporated the wrong incentives. Also, the term health maintenance
organization was coined as a substitute for prepaid group practice,
principally because it had greater public appeal."
2. As most small businesses now offer only one
health plan and an HMO plan at that, these millions of workers are
dependent on the quality of an organization for which there is no real
public analysis. These workers - for example, the Hmong translators of
the KW Health Clinic in Fresno, California - are dependent patients in
the sense that if the state and federal regulators stay quiet - which
they do - the care is highly compromised. In fact, the care is
sometimes worse than having no care at all.
3. As a volunteer plaintiff and expert witness in
this case - since Audrey Timmis was my patient and is still my friend
-1 discovered Kaiser not only splitting some 35 different pills
(including some medications for seizures and heart rhythms) but even
asked women to routinely use cheaper, oral estrogen
The Timmis suit has temporarily reduced the number
of Kaiser split medications. And many other "managed care" systems are
watching to see if Kaiser gets away with this compromise in care.
spin brochure on the topic tries
to call all this medication "halving," which is another fraud. The
resulting pieces are not equal in size. In fact, the dosage swings may
exceed 40% from day to day.
5. To be "non-profit" - really a mostly IRS
regulated designation-an organization need only be 51% non-profit. The
Plan can be involved in all sorts of for profit ventures (up to 49%)
and the public never be the wiser. The physicians groups,
like the Permanente groups and other IPAs (independent medical
associations), are clearly shareholders with stocks and huge dividends,
but are never portrayed to the public in the for profit light. It is a
deception that particularly hurts medical care in California since the
media so rarely touches on the subject, Susan Goldsmith of the East Bay
Express being a rare exception. In this most HMO penetrated state, the
physicians do as much cutting of services as the plans do. I often
think our state should be renamed Kaiser-fornia. Worst
of all the physicians and the plans split the profits of withholding
through the deal worked out at Henry Kaiser's estate some sixty years
ago called The Tahoe Agreement. The unspent risk pools of money become
the enormous dividends of medical inaction.
6. The degradation of the covenant of trust
between the physician and the patient occurs first through language in
which the patient becomes an "external customer" (see Exhibit 2).
And the physician has become - particularly after 1997 - merely the
coach of a "provider care team." This patient dis-empowerment through
language is extraordinary and, as Karen Shore pointed out to Congress,
just as effective as the Cambodian effort to kill off the
intellectuals. The whole idea of a profession and its need for
self-regulation is due to the gap in knowledge between the source of
service and the dependent receiver of care that is not customer to
business. But the protection systems are all failing in the race toward
maximum MD and CEO income. About half of CEO income in "managed care"
is in bonuses.
10/25/02 - The Permanente Journal "Selecting
and Interpreting Diagnostic Tests" page 7 of 8.
Laboratory tests are of greatest diagnostic use to clinicians who find
themselves in a '50:50 dilemma' and cannot decide whether the patient
does or does not have the disease in question."
8. The LA Times had an editorial on this subject
comparing buried arbitration mistakes to domestic terrorism. But the
law did not change.
From "A Patient Bill of Rights" - American
Hospital Association - Patient Right Number 2 - page 124, Ethical
Issues and Patient Rights - Across the Continuum of Care put
out by the Joint Commission of Accreditation of Healthcare
Chicago) Illinois) in 1998.
10. See also Chapter 1 "Rights of Patients" -
"Patients are provided, to the degree known, complete information
concerning their diagnosis, evaluation, treatment, and prognosis."
Accreditation Handbook for Ambulatory Health Care
1998 - Accreditation Association for Ambulatory Health Care,
Inc. in Skokie, Illinois " a spin off from the Joint Commission.
to me Kaiser leaves out the
right of diagnosis in its "Patient Rights" section - page - 12
1998 Reference Guide [Booklet] - Kaiser
Permanente Medical Center Fresno. This right is conspicuously absent.
12. Cancer of the
colon is one of the top
three cancers in the United States, and right sided cancer of the colon
is often caught too late because there is no obstruction and only mild
anemia to give a hint of disease until it is too late. And Kaiser's
sigmoidoscopies by nurses do little for right colon diagnosis.
evaluating the support by any
university of Kaiser's strategies, it is wise to first check on how
many Henry Kaiser endowed positions are being supported by the Kaiser
Family Foundation, falsely assumed to be separate from Kaiser
Permanente, e.g. Stanford, etc.
14. These are rare glimpses of what Kaiser tries
to keep as an oral tradition only - older Kaiser doctors teaching newer
Kaiser doctors at hotel retreats (p. 203) of the book about to be
discussed. So these few written renditions need close study.
15. This was the
way it was explained to me
when I wished to continue my separate, non-competing office and yet
progress to a benefit status.
16. Kaiser is one of a handful of organizations in
California that can force their injured employees to stay within the
HMO system for one year. Other workers in the state have freedom of
provider choice after one month.
17. Kaiser also lets the Kaiser Family
criticize HMOs in general, with the Kaiser Health Plan hoping to escape
the public wrath by pushing its brand name Kaiser trust and
status. The goal is for Kaiser to try to end up as a West Coast Mayo
type of public image; this effort has failed because the stories of
pour out every day. The Kaiser Family Foundation also tries to look
very separate from the Kaiser Plan, but the family is represented on
the Plan's board and, in fact, helps guide the Health Plan
into venture capital spinoffs of many varieties: CareTouch, Heart West,
LLC, OnCure Technology, Meridian Health Care Management, Inc, Optimal
Care, LLC as part of the German Company of Fresenius) ?Kaiser
Co., Ltd, ?Caremark, ?KPC Medical Management, ?Emageon, Inc., ?Micro
Design Corporation, ?Kaviset 1, LLC, etc.
18. These guidelines were developed by the
government - Agency for Healthcare Quality and Research ("arc") - for a
cost of $500,000 to $1,000,000 per disease, e.g. community acquired
pneumonia. The spirit of science has already been removed by the time
they got through this process.
19. I am often reminded of the peasants of
Sherwood Forest lining up to get scraps from the Castle of the Sheriff
of Nottingham. The self-anointing that goes on in the castle is related
to the MICRA cap and ERISA legislation protections - legal motes
keeping the citizens disempowered and demoralized. Thomas Jefferson
would have a hard time matching this up to the human rights expressed
in the Declaration of Independence and the Constitution.
20. This money is
viewed quarterly and distributed
PacificCare did this to 65,000 patients in
Fresno several years ago. The records nightmare resulted in HMO profit
as patients thought that the new IPA physicians
would care about the diagnoses of the previous IPA physicians.
22. The only
oversight of Kaiser under Dr.
Lawrence was his own view of HMO headquarters from his fancy home in
the Piedmont Hills.
Commonly used as a place to brag about
community service, even though that is required under tax law.
24. The Florida
Supreme Court in its March 27,
2003 recognized, in Rotlando Villazon v. Prudential Health,
that HMOs and their physician groups have become intricately
entangled. 'While physicians in the past in the traditional pattern of
American life may have constituted distinct entities and independent
centers of occupation and profession, that model has been dramatically
altered through the HMO concept in a significant manner which a legal
system cannot simply ignore." The decision was that the HMO could not
invoke the federal
EKISA protection over state law such that the HMO could escape agency
the in compromises of medical necessity. [This is probably why the HMOs
want to hide under the new federal tort capping law being passed by the
House and now studied by the Senate; the public is unaware that the
have any legal crisis and are, instead, rather stunned by their profits
and reserves - Kaiser's "reported net income" in 2002 is
expected to be about $600 million. In fact, Kaiser is probably waiting
to disclose how the physicians are paid having lost a major lawsuit
on the issue in January 2003 - until the new HMO lawsuit cap is
Actually, Kaiser Plan has been caught -
by Santa Monica consumer advocate Jaimie Court - loaning money to the
Permanente Physicians so as to make donations to Governor Davis. This
loan, I believe, will be added some day to the long list of Permanente
loans forgiven by the Kaiser Plan over time. I even believe individual
home loans to Kaiser physicians by the Kaiser credit union are forgiven
or bought out over time.