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Policy: The LA Times on Kaiser Permanente By John Irvine

The smoke appears to be clearing around Kaiser Permanente’s headquarters, where the management is no doubt wondering if the worst is over after this week’s decision
  to close the HMO’s Northern California kidney
  transplant center
. Patients enrolled in the program have been transferred
  to UCSF and to UC Davis. Embarrasingly for Kaiser, there were a few Medicare Part D style snafus with the transition (apparently nobody was picking up at the toll-free number set up for patients.) But all in all, the consensus
  seems to be that Kaiser did the right thing by moving quickly to shut down the
  operation once the extent of the problems became clear.

What happens next? The answer to that question is probably best known by the
  reporters at the Los Angeles Times, who may or may not have something else up
  their sleeves, after the first wave of stories uncovering the scandal. Historically,
  the Times has been tenacious when it comes to pieces like this (For a good example see: the transplant story at UCI
  Medical Center
). The paper won a Pulitzer for
  outstanding public service journalism in 2005 for its series on King/Drew and might well have won another last year if it hadn’t been
  for the Times-Picayune’s
  brilliant coverage of Hurricane Katrina.

The problem for Kaiser is that once a story like this one breaks, a chain reaction
  starts. People get mad. People come forward. E-mails start flying. For reporters,
  the threads begin to unravel. It should go without saying that for a large health
  management organization with a long and varied history, this is not exactly
  an ideal scenario …

The whole emerging Kaiser story of course, has been the topic of lively debate  in the THCB comments section, where the company is far from as unpopular as  one might assume. (Matthew, you’ll note from earlier posts in this thread, is
  a fairly sympathetic observer.) Up from the comments to make life more interesting
  comes a former Kaiser transplant patient who did not particularly care for the
  detached and academic tone of the discussion between some of the posters. Sarah 
  had this to say:

I hate 70% of you. You have no CLUE what you are saying. I am one of those
  patients in the Kaiser Nor/Cal Transplant Program, having had a kidney transplant
  17 years ago. What is coming out about this program is utterly horrifying, and
  how any of you can defend Kaiser or debate the merits of transplants makes me
  ILL. You should be ashamed of yourselves. And I know none of this is coming
  from UCSF or Davis. And I know Dr. Inokuchi personally (she was one of my docs
  at CPMC). And I know the program has been crap since it started (good luck getting
  a call back for a simple question about dental pre-meds).This scandal is far bigger than y’all seem to realize. A lot of people died 
for no reason.

And for my surgery, Kaiser saved a fortune. $40k a year for 17
  years plus health care costs related to dialysis would have been far more than
  the transplant cost plus rejection meds."

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TROTHgadflyPeterjack danielsTom Leith Recent comment authors
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TROTH
Guest
TROTH

I can attest to the cost savings agenda that Kaiser continues to maintain! Having had major Cancer surgery in March of 2000, I was TOLD that there were NO openings in the surgical center at Panorama City until 12 weeks after I was diagnosed. What they did not ascertain at the time of diagnosis is that my Cancer was at a Stage 3 Level! Because Kaiser does not operate in the evening or early a.m. hours, I waited 12 weeks for sugery! In spite of it all, I was able to survive the Stage 3 degree that I had! It’s… Read more »

gadfly
Guest

I can also vouch that much of Kaiser’s inhouse discussion is about cutting costs and aggressive billing. The first module that was developed for HealthConnect was the billing system, and from the get-go the discussion was about how to repackage and resell the system.
I’m so glad this discussion is no longer being suppressed. The people who tried to draw attention to these problems were marginalized by their status as “isolated victims”. It takes sympathetic journalists and policymakers to synthesize the complaints and demonstrate that these problems hurt everyone. I’m so glad that the issues are finally on the table.

Tom Leith
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Tom Leith

> When I had a small finger OP the > start and end times were logged. Most hospitals try to charge for time in an OR — usually in fifteen-minute increments, but the first fifteen minutes are very expensive because they include the clean-up time in that. Whether this actually matters depends on the reimbursement scheme for that particular patient. > It seems that doctors could simplify their > lives [snip] if they moved to time based billing A doc can bill on a HCFA 1500 form no matter what payer is paying. That was the promise of HIPAA —… Read more »

Barry Carol
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Barry Carol

Peter, I never suggested unlimited co-pays either. In fact, I really don’t think co-pays are very effective in controlling utilization. Deductibles are, however. I believe a deductible of $1,000 for an individual or $2,000 for a family is reasonable. After the deductible is reached, insurance should pay 100% for covered services. In most large groups, 4%-5% of the policyholders account for 50% of the medical costs. They will not be very cost sensitive once their deductible is reached, but that should be where case management comes in. For the vast majority of people who have comparatively low medical costs in… Read more »

Peter
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Peter

Barry, I have said that using co-pays is an important issue to hold down system use, but only for regular doctor visits, if I didn’t make myself clear. Co-pays and deductibles for necessary medical procedures (diagnosed by a physician) is not what I would call good or fair healthcare policy. A high co-pay doesn’t make the cancer less of a threat. What we found in Canada was that most of the overuse was in GP physician access and misuse of the ER. I’m not including doctor FFS abuse which is also part of the equation. The “Gee I have a… Read more »

Barry Carol
Guest
Barry Carol

Peter, OR’s may already bill on a time basis, though doctors, labs, imaging centers, etc. generally do not. The personal experience you cited may well have been yet another example of defensive / CYA medicine at work. As for other countries providing care for less without going bankrupt, I’ll defer to your knowledge of the Canadian system, but all of these other systems have developed non-price rationing approaches (like long lead times to get an appointment with a specialist and waiting lists for operations) to hold down demand for more expensive, non-life threatening procedures. Moreover, I think even you have… Read more »

Barry Carol
Guest
Barry Carol

Tom, I think the CMS approach is in the right direction and was gratified to hear of their improving sophistication with respect to matching signs and symptoms with appropriate diagnostic tests. It seems that doctors could simplify their lives (and perhaps reduce office expenses) if they moved to time based billing for their privately insured and self-pay patients. I presume they would need to convince the insurers to allow this, at least as an alternative to the current system. Perhaps you could provide some insight as to which approach would leave them better off finacially. Time based billing is, more… Read more »

Peter
Guest
Peter

Barry, don’t we have time based billing now, at least for OR time. When I had a small finger OP the start and end times were logged. I heard them called out by the OR nurse. I’m assuming then that the bill to the insurance company would be time based?? It was also intersting that I had requested a local only. When I got to the pre-op the anesthesiologist made every attempt to get me put under, who’s costs was she trying to control?. In fact the operation was so small I didn’t think it even needed an OP room,… Read more »

jack daniels
Guest
jack daniels

Increased medical testing has little to do with increasing reimbursements and everything to do with legal liability.
When you go to your FP and he orders blood tests and imaging, the FP doesnt get paid for it, the radiologist and the chemistry lab gets paid for those. The FP is not running those tests, he is delegating them to someone else. So the FP has no reason to do these tests simply to increase his revenue, because he wont see any money from those tests.

Tom Leith
Guest
Tom Leith

Barry writes: > If virtually all medical services that lend > themselves to time based billing adopted that > approach, pricing transparency should be a simple > matter, and auditing providers should also be much > easier as well. Its getting there Barry. Medicare is leading the way on this. It isn’t quite time-based billing. Rather it is service based — but the prospective payment amount is strongly influenced by staff time and labor rates in different geographical areas. It also assumes reasonable management of practice overheads. You can think of this as DRGs for ambulatory care in hospitals. But,… Read more »

Barry Carol
Guest
Barry Carol

Marc, while I understand that if everyone had insurance, there would be no uncompensated care, we would still have doctors and other providers complaining that reimbursement rates are inadequate, especially in the case of Medicare and Medicaid. Furthermore, unless deductibles were reasonably meaningful (say, $1,000 per person / $2,000 per family) and perhaps capped at 5% of income for non-Medicaid eligible low income people, there is a risk that overuse would bankrupt the country. Related to the reimbursement issue, I also think it would be more efficient if providers could be paid based on time spent with the patient. If… Read more »

Marc
Guest

I agree with you again Barry. The reason Kaiser attempted this was to reduce costs. This is the inevitable consequence of trying to equate health care to buying a car or a computer, and placing all the onus on healthcare providers to reduce costs. As long as reimbursement rates for health care continue to decline from health insurers as well as the government, and the government mandates that everyone be entitled to health care regardless of their ability to pay, without mandating that everyone purchase health insurance, health care providers will be forced to seek other ways to recoup their… Read more »

Barry Carol
Guest
Barry Carol

In the course of reading about Kaiser’s kidney transplant program troubles and other comments about the organization’s reputation in some quarters as an unresponsive bureaucracy, it got me to thinking about the HMO model generally. While a fixed amount of money to take care of a patient population should provide incentives to keep them well (through routine physicals and other screening tests to catch problems early before they become serious and expensive to treat), there are negative incentives as well. If I am one of the executives running an organization like this, I perceive that my income for the year… Read more »