Not that many years ago, people thought of HMOs as the dreaded beasts of health care, linking them to crowded waiting rooms and second-rate medicine.
In the mid-1980s and into the 1990s, Kaiser Permanente struggled with its reputation, especially in California, where state officials conducted intense hearings to investigate health maintenance organizations.
Fast-forward to now.
Kaiser, quickly gaining popularity in Colorado because of its lower premiums and high customer satisfaction, has achieved something of golden-child status as the nation considers a major overhaul of the health care system.
Even President Barack Obama, whose late grandmother was a Kaiser patient, bragged on Kaiser in a national magazine, calling the managed care company “one of the models of high-quality, cost-efficient care that’s out there right now.”
Kaiser membership in Colorado, now second only to California, has climbed 32 percent since 2000 — from 372,793 to 492,377. That’s almost twice the rate of increase in state population and includes a jump of more than 12,000 customers from 2008 to 2009. The company has scored contracts with the state, Qwest and the University of Denver, to name a few.
Kaiser is unique because it is both a nonprofit insurance company and a network of doctors, nurses, pharmacists, nutritionists and lab technicians. The physicians are paid salaries to take care of patients — hence the commercials about how Kaiser “lets doctors be doctors.”
“The salaried model keeps our physicians focused on what they have to do,” said Donna Lynne, chief executive of Kaiser in Colorado. “They don’t have to run a business. They are focused on treating patients.”
One-stop shopping
Clearly, Kaiser is popular among physicians. About two-thirds of Kaiser’s 800 Colorado doctors left private practice, and the company has about five or six applicants for every opening. Doctors receive mid-level salaries, based on published salary surveys by specialty.
Top of the list for patients — who have pushed Kaiser to No. 1 on the J.D. Powers & Associates and Consumer Reports Magazine rankings — is convenience.
A typical Kaiser medical office is one-stop shopping. Physicians, eye doctors, dermatologists, radiologists, a lab and a pharmacy are all in the same building.
Take for example Ben Barr, a 76-year-old Kaiser patient from Jefferson County who recently broke his toe with a 4-by-4.
Barr called his primary care doctor at 9 a.m., and she set up a 10 a.m. appointment with a trauma physician. At the appointment, Barr went down the hallway for an X-ray, which a radiologist at a different Kaiser branch diagnosed via computer. The trauma doctor showed Barr the break in his toe, handed him a special Velcro-wrap shoe and sent him on his way.
Barr was done by 10:45. The total bill was $15.
Barr, a mountain climber, has been a Kaiser patient for 22 years and is a huge fan of the electronic-records system that lets doctors pull up all his data with a few keystrokes. His ophthalmologist will ask him about his diabetes. The pharmacist who hands him his blood pressure medicine knows about all his other diagnoses.
“At the touch of a keystroke, they know virtually everything about you — all of your interactions with other physicians, all the prescriptions and supplements you are taking,” Barr said. “Your whole history is at their fingertips.”
High tech nothing new
Kaiser has kept electronic medical records for about a dozen years, long before technology arose on the national consciousness as a way to cut health care costs.
Besides saving money on paper and duplication, the technology makes patients safer, said Dr. Bill Wright, Kaiser’s medical director for Colorado. The technology helped Kaiser link Vioxx to heart attacks long before it was removed from the market in 2004 for safety reasons. It also lets doctors, organized in teams, double-check each other’s work because every prescription and treatment plan is in the system.
Patients can log in to their Kaiser account, much as they would their bank, to get test results or e-mail their doctor with questions. A recent study by Kaiser in Hawaii found a 20 percent drop in appointments in favor of “e-visits.” Kaiser customers can schedule appointments online too.
Changing their reputation
The company uses electronic records to alert patients when they are due for mammograms or yearly physicals. The national head of Kaiser, George Halvorson, circulated a letter he received from a grateful patient who said her pharmacist told her she was due for a mammogram. The woman reluctantly had the mammogram that day and found out she had breast cancer.
“They used to have a reputation of being bureaucratic,” said Alain Enthoven, a Stanford University professor who chaired an early-1990s governor-appointed commission in California to investigate HMOs. “They’ve leaped ahead with the technology now.”
Enthoven, who has in the past served as a consultant to Kaiser, said the company’s “pre-paid” business model is smarter than the standard American model where doctors are paid per service they perform. Kaiser bases its budget, including doctor salaries, on the fixed dollar amounts employers and customers will pay that year in premiums.
Doctors in private practice get paid by insurance companies or Medicare or Medicaid per visit, per procedure.
“If you see the doctor 100 times, the insurance company will cut 100 checks,” Enthoven said. “That kind of model is not sustainable.”
Kaiser saves money if it finds a less costly way to treat patients. Not so for private-practice doctors, Enthoven said.
Cause for concern?
But that’s precisely why some critics are still leery of HMOs and the prospect of Kaiser becoming a model for government-run health care.
Kaiser’s nonprofit status and its salaried doctors “mask the managed care tactics that occur behind the scenes,” said Linda Peeno, a managed care ethicist and doctor who once worked as a medical director for two HMOs.
Peeno left the industry because of intense pressure to deny claims, she said. She quit working for one HMO as management began offering a bonus to the medical director with the highest rate of denials.
Now Peeno is a medical expert in lawsuits filed across the country against managed health care, including dozens of cases against Kaiser.
Even at Kaiser, she said, there are medical directors far from the bedside of patients making decisions about when to cover procedures. She claims Kaiser can use its electronic records for behavior modification — the company can target doctors spending the most money on X-rays, scans or overnight hospital stays.
“This has a chilling effect on what the physician does or doesn’t do,” she said. “Most people who love HMOs are people who are healthy. The minute somebody gets sick or has something that’s costly, you start encountering all these obstacles.
“A patient in a system like Kaiser is definitely at risk of getting less instead of more care.”
Lawsuits against Kaiser alleging incomplete care aren’t hard to find — but neither are lawsuits alleging negligent care against any insurance company or doctor group.
In one federal case filed in Colorado, the widow of Kaiser patient David Montoya claimed Kaiser doctors failed to seek advanced care from a cardiologist for her husband’s heart condition. The father of three died at age 35 after going into cardiac arrest at work.
Call for transparency
Instead of running government health care like Kaiser, Peeno advocates for other reform.
For starters, she wants “complete transparency” in the insurance industry — customers should know exactly when they are eligible for a hysterectomy or a coronary bypass. Currently, each insurance company has its own criteria, which are not publicly known.
Also, the system should reimburse doctors for “patient-centered, medically ethical care,” somewhere in the middle of fee-for-service and a flat rate per patient, Peeno said. And she advocates lifting limits that protect insurance companies when they are sued for denying claims that endanger patient health.
Kaiser executives, though, insist their doctors have no incentive to under-treat patients.
Kaiser employs doctors in Colorado in more than 40 specialties, Wright said. The company also will pay for a patient with a rare or complicated disease to see a non-Kaiser specialist.
“Physicians are free to work directly with patients to make the appropriate care decisions,” Wright said. “They have autonomy and control to do what they think is best for the patient. The incentive of our model is actually to keep people healthy.”
Staff librarian Barry Osborne contributed to this report.
Jennifer Brown: 303-954-1593 or jenbrown@denverpost.com
