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It was Hatch who proposed to Garfield the specific solution that would lead to the creation of Kaiser Permanente: Industrial Indemnity would prepay Later, Garfield also credited Ordway with coming up with the general idea of prepayment for industrial health care and explained that he did not know much at the time about other similar health plans except for the Ross-Loos Medical Group.
Hatch's solution enabled Garfield to bring his budget back into the positive, and to experiment with providing a broader range of services to the workers besides pure emergency care. However, in March , Consolidated Industries a consortium led by the Kaiser Company initiated work on a contract for the upper half of the Grand Coulee Dam in Washington state, and took over responsibility for the thousands of workers who had worked for a different construction consortium on the first half of the dam.
Edgar Kaiser, Henry's son, was in charge of the project. To smooth over relations with the workers who had been treated poorly by their earlier employer , Hatch and Ordway persuaded Edgar to meet with Garfield, and in turn Edgar persuaded Garfield to tour the Grand Coulee site. Garfield subsequently agreed to reproduce at Grand Coulee Dam what he had done on the Colorado River Aqueduct project. Unlike the workers on Garfield's first project, many workers at Grand Coulee Dam had brought dependents with them.
The unions soon forced the Kaiser Company to expand its plan to cover dependents, which resulted in a dramatic shift from industrial medicine into family practice and enabled Garfield to formulate some of the basic principles of Kaiser Permanente. It was also during this time that Henry Kaiser personally became acquainted with Garfield and forged a friendship which lasted until Kaiser's death. In , the Kaiser Company began work on several huge shipbuilding contracts in Oakland, and by the end of would control four major shipyards on the West Coast.
During , the expansion of the American defense-industrial complex in preparation for entrance into World War II resulted in a massive increase in the number of employees at the Richmond shipyard. On March 1, , Sidney R. In July, the Permanente Foundation formed to operate Northern California hospitals that would be linked to the outpatient health plans , followed shortly thereafter by the creation of Northern Permanente Foundation for Oregon and Washington and Southern Permanente Foundation for California.
Kaiser's first wife, Bess Fosburgh, liked the name. An abandoned Oakland facility was modernized as the bed Permanente Hospital opened on August 1, this facility evolved over the decades into today's flagship Kaiser Oakland Medical Center. Three weeks later, the bed Richmond Field Hospital opened. Six first aid stations were set up in the shipyards to treat industrial accidents and minor illness. Each first aid station had an ambulance ready to rush patients to the surgical field hospital if required.
Stabilized patients could be moved to the larger hospital for recuperative care. These physicians established California Physicians Service to offer similar health coverage to the families of shipyard workers. Meanwhile, during the war years, the American Medical Association AMA which opposed managed care organizations from their very beginning tried to defuse demand for managed care by promoting the rapid expansion of the Blue Cross and Blue Shield preferred provider organization networks.
In , Henry J. Kaiser and Dr. Sidney R. In , the Kaiser Permanente health plan was opened to the public. In , Kaiser established the Henry J. Membership bottomed out at 17, for the entire system but then surged back to 26, within six months as Garfield aggressively marketed his plan to the public. During this period, a substantial amount of growth came from union members; the unions saw Kaiser Permanente care as more affordable and comprehensive than what was available at the time from private physicians under the fee-for-service system.
Kaiser Permanente membership soared to , in , , in , , in , , in , and , in From onward, both Kaiser Permanente and Garfield fought numerous attacks from the AMA and various state and local medical societies.
Henry Kaiser came to the defense of both Garfield and the health plans he had created. In , the organization acquired its current name when Henry Kaiser unilaterally directed the trustees of the health plans, hospital foundations, and medical groups to add his name before Permanente.
That same year, Kaiser Permanente also began experiments with large-scale multiphasic screening to identify unknown conditions and to facilitate treatment of known ones.
Henry Kaiser became fascinated with the health care system created for him by Garfield and began to directly manage Kaiser Permanente and Garfield. This resulted in a financial disaster when Kaiser splurged on the new Walnut Creek hospital; his constant intermeddling led to significant friction at every level of the organization. The situation was not helped by Kaiser's marriage to Garfield's head administrative nurse who had helped care for Kaiser's first wife on her deathbed , convincing Garfield to marry the sister of that nurse, and then having Garfield move in next door to him.
Clifford Keene who would eventually serve as president of Kaiser Permanente later recalled that this arrangement resulted in a rather dysfunctional and combative family in charge of Kaiser Permanente. Keene was an experienced Permanente physician whom Garfield had personally hired in During he had been trying to get a job at U.
Steel , but on the morning of December 5, , with internal tensions worsening day by day, Garfield met with Keene at the Mark Hopkins Hotel in San Francisco and asked him to turn around the organization. It took Keene 15 years to realize that Kaiser had forced Garfield to ask Keene to become his replacement.
Due to the chaos on the board, Keene at first took control with the vague title of Executive Associate, but it soon became clear to everyone that he was actually in charge and Garfield was to become a lobbyist and "ambassador" for the HMO concept. However, even with Garfield relieved of day-to-day management duties, the underlying problem of Henry Kaiser's authoritarian management style continued to persist.
After several tense confrontations between Kaiser and Permanente Medical Group physicians, the doctors met with Kaiser's top adviser, Eugene Trefethen, at Kaiser's personal estate near Lake Tahoe on July 12, Trefethen came up with the idea of a contract between the medical groups and the health plans and hospital foundations that would set out roles, responsibilities, and financial distribution. While Keene and Trefethen struggled to fix the damage from Kaiser's micromanagement and Garfield's ineffectual management, Henry Kaiser moved to Oahu in and insisted on expanding Kaiser Permanente into Hawaii in He quickly ruined what should have been a simple project, and only a last-minute intervention by Keene and Trefethen in August prevented the total disintegration of the Hawaii organization.
Having overseen Kaiser Permanente's successful transformation from Henry Kaiser's health care experiment into a large-scale self-sustaining enterprise, Keene retired in In , all six of Kaiser Permanente's regions had become federally qualified health maintenance organizations. In , Kaiser acquired a nonprofit group practice to create its Mid-Atlantic region, encompassing the District of Columbia, Maryland, and Virginia. In , Kaiser Permanente expanded to Georgia.
By , Kaiser Permanente provided coverage for about a third of the population of the cities of San Francisco and Oakland; total Northern California membership was over 2.
Elsewhere, Kaiser Permanente did not do as well, and its geographic footprint changed significantly in the s. The organization spun off or closed outposts in Texas , North Carolina , and the Northeast.
In , Kaiser Permanente sold its Texas operations, where reported problems had become so severe that the organization directed its lawyers to attempt to block the release of a Texas Department of Insurance report. This prompted the state attorney general to threaten to revoke the organization's license. The organization also sold its unprofitable Northeast division in The Ohio division was sold to Catholic Health Partners in In , Kaiser Permanente celebrated its fiftieth anniversary as a public health plan.
Two years later, national membership reached nine million. In , the organization established an agreement with the AFL-CIO to explore a new approach to the relationship between management and labor , known as the Labor Management Partnership. Going into the new millennium, competition in the managed care market increased dramatically, raising new concerns.
The Southern California Permanente Medical Group saw declining rates of new members as other managed care groups flourished. This information technology failure led to major changes in the organization's approach to digital records. Under George Halvorson's direction, Kaiser looked closely at two medical software vendors, Cerner and Epic Systems , ultimately selecting Epic as the primary vendor for a new system, branded KP HealthConnect.
Although Kaiser's approach shifted to "buy, not build," the project was unprecedented for a civilian system in size and scope. Early in the 21st century, the NHS and UK Department of Health became impressed with some aspects of the Kaiser operation and initiated a series of studies involving several health care organizations in England. The management of hospital bed-occupancy by KP, by means of integrated management in and out of hospital and monitoring progress against care pathways has given rise to trials of similar techniques in eight areas of the UK.
In , a controversial study by California-based academics published in the British Medical Journal compared Kaiser to the British National Health Service , finding Kaiser to be superior in several respects. Second, its doctors are salaried rather than paid per service, which removes the main incentive for doctors to perform unnecessary procedures.
Thirdly, KP attempts to minimize the time patients spend in high-cost hospitals by carefully planning their stay and by shifting care to outpatient clinics. This practice results in lower costs per member, cost savings for KP and greater doctor attention to patients. Alleged violations of California's timely access laws included failures to accurately track wait times and track doctor availability amid evidence of inconsistent electronic and paper records. It was also found by the DMHC that patients received written materials circulated by Kaiser dissuading them from seeking care, a violation of state and federal laws.
DMHC also issued a cease and desist order for Kaiser to end the practices. The report found Kaiser had put systems in place to better track how patients were being cared for but still had not addressed problems with actually providing mental health care that complied with state and federal laws.
It also issued a statement which denied much of the wrongdoing. In Kaiser settled five cases for alleged patient dumping —the delivery of homeless hospitalized patients to other agencies or organizations in order to avoid expensive medical care—between and Los Angeles city officials had filed civil and criminal legal action against Kaiser Permanente for patient dumping, which was the first action of its kind that the city had taken.
At the time that the complaint was filed, city officials said that 10 other hospitals were under investigation for similar issues. In , Northern California Kaiser Permanente initiated an in-house program for kidney transplantation. Upon opening the transplant center, Kaiser required that members who are transplant candidates in Northern California obtain services exclusively through its internal KP-owned transplant center. However, patients who needed a kidney were less likely to be offered one.
At other California transplant centers, more than twice as many people received kidneys than died during the same period. Unlike other centers, the Kaiser program did not perform riskier transplants or use donated organs from elderly or other higher-risk people, which have worse outcomes. Northern California Kaiser closed the kidney transplant program in May As before, Northern California Kaiser now pays for pre-transplant care and transplants at other hospitals.
This change affected approximately 2, patients. Kaiser operates a Division of Research, which annually conducts between and studies, and the Center for Health Research, which in had more than active studies. Kaiser's bias toward prevention is reflected in the areas of interest—vaccine and genetic studies are prominent.
The work is funded primarily by federal, state, and other outside non-Kaiser institutions. Kaiser has created and operates a voluntary biobank of donated blood samples from members along with their medical record and the responses to a lifestyle and health survey.
De-identified data is shared with both Kaiser researchers and researchers from other institutions. Kaiser Permanente announced its plan to start a medical school in December, , and the school welcomed its inaugural class in June, The Kaiser Permanente Bernard J. The school will waive all tuition for the full four years of medical school for its first five classes.
In order to contain costs, Kaiser requires an agreement by planholders to submit patient malpractice claims to arbitration rather than litigating through the court system. This has triggered some opposition. Wilfredo Engalla is a notable case.
In , Engalla died of lung cancer nearly five months after submitting a written demand for arbitration. Watchdogs have accused Kaiser of abusing the power imbalance inherent in the arbitration system.
Kaiser engages in many cases whereas a customer will usually engage in just one and Kaiser can reject any arbitrator unilaterally, thus they can select company-friendly arbitrators over those that rule in favor of customers. As a large organization, Kaiser can also afford to spend much more on lawyers and orators than the customer, giving them more advantages.
The degree to which this office is actually independent has been questioned. Patients and consumer interest groups sporadically attempt to bring lawsuits against Kaiser Permanente. Recent lawsuits include Gary Rushford's attempt to use proof of a physician lie to overturn an arbitration decision.
In one case, Kaiser attempted to significantly expand the scope of its arbitration agreements by arguing it should be able to force nonsignatories to its member contracts into arbitration, merely because those third parties had allegedly caused an injury to a Kaiser member which Kaiser had then allegedly exacerbated through its medical malpractice.
The California Court of Appeal for the First District did not accept that argument: "Absent a written agreement—or a preexisting relationship or authority to contract for another that might substitute for an arbitration agreement—courts sitting in equity may not compel third party nonsignatories to arbitrate their disputes. While Doctors of Medicine M. KP's California operations were the target of four labor strikes in and — two September , January involved more than 20, nurses, mental health providers, and other professionals.
The workers were dissatisfied with proposed changes to pensions and other benefits. On November 11, , up to 18, nurses went on strike at KP hospitals in Northern California over Ebola safeguards and patient-care standards during union contract talks. Jamie Court, president of the Foundation for Taxpayer and Consumer Rights has said that Kaiser's retained profits are evidence that Kaiser policies are overpriced and that health insurance regulation is needed.
State insurance regulations require that insurers maintain certain minimum amounts of cash reserves to ensure that they are able to meet their obligations; the amount varies by insurer, based on its risk factors, such as its investments, how many people it insures, and other factors; a few states also have caps on how large the reserves can be.
Kaiser has been criticized by activists and state regulators for the size of its cash reserves. From Wikipedia, the free encyclopedia.
American integrated managed care company. Headquarters the Ordway Building in downtown Oakland. Net income. Main article: Kaiser Permanente Bernard J. Tyson School of Medicine. Kaiser Permanente. Archived from the original on April 16, Retrieved August 2, Retrieved October 10, Copy Citation. Post the Definition of kaiser to Facebook Facebook. Share the Definition of kaiser on Twitter Twitter. Kids Definition. Biographical Definition. Kaiser biographical name.
Henry John — American industrialist. More from Merriam-Webster on kaiser. Love words? Need even more definitions? Word of the Day. Get Word of the Day daily email! Test Your Vocabulary. Acrobat Surgeon Judge Firefighter. Test your vocabulary with our question quiz!
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