Our Point of View
June 22, 2007
Kaiser Permanente's Prominent Role in American Health Care Reform
Voices that recently have joined the health care reform debate have incorrectly portrayed Kaiser Permanente and its history of championing health care excellence and availability in the United States. The truth is that Kaiser Permanente has been a strong and steady proponent of high-quality, not-for-profit health care for 65 years, and misrepresentations of KP's role must be addressed.
| Timeline: KP's longtime role in health care reform |
Kaiser Permanente co-founders Henry J. Kaiser and Sidney R. Garfield, MD, championed a prepaid, integrated health care model starting in the 1930s. That effort continues today, as Kaiser Permanente is at the forefront of local, state, and national debates over how to improve health care in America. KP's Chairman and CEO, George C. Halvorson, has written a book focusing on overall reform. "Health Care Reform Now!" will debut Aug. 17. The book — the third in a series about health care reform — calls for universal coverage and major improvements in health care accountability and performance.
Kaiser Permanente's portrayal in a new movie, "SiCKO," must be corrected. While Kaiser Permanente has always (and will always) welcome new voices to the incredibly important discussion of health care reform, Kaiser Permanente's 8.7 million members, the communities Kaiser Permanente serves, and the country as a whole, deserve to hear facts that should help clear up misconceptions created by the movie.
Kaiser Permanente's Role in the HMO Act of 1973
Kaiser Permanente and the 1993 Case of Mychelle Williams
Kaiser Permanente's Role in the Handling of Homeless Individuals in Los Angeles
Kaiser Permanente's Role in the HMO Act of 1973
A health care reform debate in the early 1970s put Kaiser Permanente's integrated care model in the spotlight. Edgar Kaiser, Kaiser Permanente's chairman at the time, emphatically advanced KP's not-for-profit model and how financial incentives should be used to motivate physicians to focus on keeping patients well, not withholding care.
John Ehrlichman, in a 1971 conversation with President Richard Nixon that's used in the film, crudely and inaccurately paraphrases a conversation he had with Edgar Kaiser. Ehrlichman's distorted paraphrase badly misrepresents Kaiser Permanente, its goals, its strategy, and its not-for-profit model. A Kaiser Permanente "Health Care Memorandum to John Ehrlichman," (pdf) stored in the National Archives, clearly supports this, as does this National Archives White House briefing document (pdf).
Using a secondhand, inarticulate paraphrase to represent KP's role in the health care reform thinking of an era is a sad distortion of the truth. While Kaiser Permanente was in operation for many years before, it did serve as a model for the HMO Act of 1973. Paul Ellwood Jr., MD, a community physician working with the U.S. Department of Health, Education and Welfare, in 1971 found a model for his "health maintenance organization" vision in Kaiser Permanente.
"Just as soon as I had met with the people from HEW, and they said, 'let's do this and put it in a presidential health message,' I got on a plane and I went out to Oakland and sat down with the top management at Kaiser Permanente." Ellwood said. Ellwood called for a health plan delivery system focused on the quality of care, not the income of caregivers. He called the idea "health maintenance" because that was the goal of the whole concept — maintaining health. Ellwood added, "...the HMO concept wasn't some pipe dream; it was already being used for a couple of million people."
Despite Ehrlichman's miscommunication, Nixon eventually grasped the Kaiser Permanente model of integrated, preventive health care. In a communication to Congress about his Health Strategy Initiative on Feb. 18, 1971, Nixon called "health maintenance" an important part of "a new national health strategy." He continued:
"If more of our resources were invested in preventing sickness and accidents," Nixon said, "fewer would have to be spent on costly cures. If we gave more attention to treating illness in its early stages, then we would be less troubled by acute disease. In short, we should build a true 'health' system—and not a 'sickness' system alone.
"...Under traditional systems, doctors and hospitals are paid, in effect, on a piecework basis. The more illnesses they treat, and the more service they render, the more their income rises. This does not mean, of course, that they do any less than their very best to make people well. But it does mean that there is no economic incentive for them to concentrate on keeping people healthy."
The HMO Act had strong bipartisan support. Ironically, when Nixon signed the HMO Act in 1973 it had been so diluted by the political process from Ellwood's ideas that Kaiser Permanente, a central model at the outset, did not qualify as an HMO until the act was amended four years later. Kaiser Permanente's model of a non-profit health plan and a prepaid, integrated delivery system remains almost unique among the variety of health plans, health insurers and delivery systems in America today.
Kaiser Permanente and the 1993 Case of Mychelle Williams
This is a case of medical error — medical malpractice that occurred 14 years ago. It was not the denial of coverage for necessary medical care, as the movie claims.
The Mychelle Williams case is a tragic case where the child's treating physician at a non-Kaiser, public county hospital in Los Angeles failed to diagnose a deadly blood infection (sepsis) and, therefore, did not administer antibiotics that might have saved the child's life.
Fourteen years ago, the treating physician at the King/Drew Medical Center incorrectly believed that he was treating a patient having an acute asthma attack. He had several phone conversations with one of our physicians. Neither physician discussed the possibility that the child was suffering from a grave blood infection. During the course of those conversations, given the asthma misdiagnosis, the Kaiser physician believed that necessary tests could be conducted at Kaiser once the child was stabilized for asthma and transported to Kaiser. As a result of the misdiagnosis, the child ultimately succumbed to her blood infection. We offer our deepest sympathy to her family.
Ultimately, a jury found that the county hospital's treating physician had misdiagnosed the patient and was 75 percent responsible for the malpractice. The jury also found Kaiser Permanente's physician 25 percent responsible because of the phone conversation with the treating physician. We regret that none of the physicians involved recognized that the child had a life-threatening infection and not asthma. The movie claims we denied coverage of treatment by the doctor at the county hospital. That was not true. The issue was a misdiagnosis followed by the wrong treatment. The movie is inaccurate in its portrayal of that sad case.
It is important to know that we rely entirely on the treating emergency physicians in non-Kaiser hospitals to make the determination of what emergency care our members require in those hospitals. That is the case now and that was the case 14 years ago. This was essentially a tragic case of medical malpractice.
Kaiser Permanente's Role in the Handling of Homeless Individuals in Los Angeles
Kaiser Permanente is committed to bringing positive change to the health of the homeless in Los Angeles, and in numerous communities it serves. Kaiser Permanente provided charitable care to 256,000 people in 2006. Some of those people were homeless. Multiple programs have been supported to achieve these goals. It is an incredibly challenging task — but one that needs the support of all of us. For one homeless person, however, in an incident that was clearly not our usual approach, we made a series of sad mistakes.
What happened to Carol Ann Reyes on March 20, 2006, was wrong. We provided several days of care and then attempted to send her to a shelter. We handled the transfer very badly — and we feel horrible that we fell so far from our standards of how our patients should be treated. Kaiser Permanente apologized to Ms. Reyes immediately after this isolated incident. The steps that Kaiser Permanente has taken since to prevent any possible recurrence have now been recognized as a model for the treatment and discharge of homeless patients.
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Dr. Benjamin Chu, MD, MPH, said in a statement of apology in May, "What happened with Ms. Reyes was an isolated incident. It was not our practice. We feel terrible that it happened. We have taken very strong steps to make sure nothing like that can happen again."
Those steps — which included developing a special discharge protocol specifically for homeless patients — were deemed strong enough that at least one other hospital in Los Angeles have announced it would largely adopt Kaiser Permanente's model. Those steps also earned Kaiser Permanente praise from an attorney from the American Civil Liberties Union.
Finally, Kaiser Permanente has supported and partnered with social services agencies in Los Angeles for years before this incident, and expects to support and partner with those agencies in the future.
A History — and a Future — in Health Care Reform
Kaiser Permanente's not-for-profit history in health care reform dates from 1938, when industrialist Henry J. Kaiser and Dr. Garfield discussed a medical care program for construction workers and their families at Grand Coulee Dam in Washington. In the discussion, Kaiser said: "You understand, you get it clear, we're not out to make money on this medical care."
Henry Kaiser's teachings guide Kaiser Permanente today. For details about Kaiser Permanente's involvement in health care reform, read this timeline.
—Updated June 29, 2007
