Evolution of Kaiser Permanente Seema Meraj, MD North Shore University Hospital

1933 The height of the Great Depression Dr. Sidney Garfield, surgeon, built a 12-bed hospital in the Mojave Desert to treat construction workers working on an aqueduct construction project Insurance companies were not paying bills on time No payment for services rendered  expenses exceeded income

Prepayment System Engineer/insurance agent Harold Hatch suggested insurance companies pay Dr. Garfield a fixed amount per day, per covered worker, up front: “prepayment” Health coverage for each worker for work-related health care = $1.50/month For an additional 10¢/day, workers could obtain coverage for non-job related medical problems

1938 Dr. Garfield provided health care to 6,500 workers and their families at the Grand Coulee Dam construction site –Replicating what had been done at the aqueduct construction site He recruited a team of doctors to work in a “prepaid group practice” The practice was a financial success

WWII Thousands of workers on ships and aircraft carries during World War II came to the Kaiser Shipyards in Richmond, CA Kaiser needed to provide care for all of the workers and believed Dr. Garfield’s method would work After Dr. Garfield was released from his military obligation by President Roosevelt, following a plea from Henry Kaiser, Dr. Garfield organized a prepaid group practice for the workers at the Richmond shipyards

WWII Ends When the war came to an end, workforce fell to 13,000 employees Only about 12 of the 75 members of the medical group remained forcing the plan to find new clients But Dr. Garfield wanted to continue practicing his new style of medicine, and Henry Kaiser wanted the plan to continue –Subsequently, the Permanente Health Plan officially opened to the public on October 1, 1945 In 10 years, enrollment surpassed 300,000 members in Northern California

Kaiser Permanente In 1952, the name of the Health Plan and the Hospitals was changed from Permanente to Kaiser because of the national recognition of Henry Kaiser and Kaiser Industries. The medical group maintained the Permanente name, to clarify that they were not employees of Henry Kaiser Now known as Kaiser Permanente

Current Day 8.7 million health plan members 167,300 employees 14,600 physicians 35 medical centers 431 medical offices Currently, Kaiser Permanente is a health care organization partnership between two entities –Kaiser Foundation Health Plans (not-for-profit ) –Permanente Medical Groups

References Kaiser Permanente News Center Sacramento Business Journal er%20kaiser The rise and fall of HMOs: an American health care revolution. onepage&q=kaiser&f=false The Permanente Journal