Sunday, July 28, 2013

Kaiser Permanente Profits versus Patients

Kaiser Permanente the largest private managed care organization in the U.S. and only second in size to the Veterans Administration.  Over the past decade Kaiser Permanente has also gone from a reasonably priced alternative for health care to one of the most expensive in the country.  KP offers no explanation for the increased costs, only that this is part of doing business. Decades ago Kaiser was a non-profit that helped all people, then they changed to a for profit model, using wording that still claims non-profit status. Although, KP did reported almost $3 billion in non-taxed profit last year, and CEO George Halvorson’s annual compensation is $6.7 million.


Here is the problem; Kaiser Permanente is a private company owned and run by doctors. This is not unusual many companies like Southwest Airlines are owned by their employees, and like Southwest they keep their costs to the customers low.  However, at Kaiser it is only the doctors getting annual profit sharing. So when making a decision about a patient’s medical care does the doctor also think about saving money, costly procedures, and those annual profit-sharing checks. Face it, the more profitable the company, the bigger those bonuses. Sounds like a big conflict of interest when your doctor is deciding between patient care and their bank account.            

3 comments:

PediNP said...

That may be true, but here is another, albeit interesting perspective: http://www.nytimes.com/2013/03/21/business/kaiser-permanente-is-seen-as-face-of-future-health-care.html?pagewanted=all&_r=0

I work for a large ACO in the Midwest. Similar philosophy to Kaiser. It will be an interesting ride....

NP Odyssey said...

Thanks good article, I worked at Kaiser and they do some things right, it is good healthcare. However, it is very much a business model first with their prices some of the highest, and being very strict about the amount of time practitioners can spend with patients during each visit.
The article says they have 17,000 doctors on salary, but forgets the bonus part.

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