HEALTH PLANS/TECH: Full text of Andrew Wiesenthal (Permanente Federation) interview

Here’s the full text of my interview from last week with Andrew Wiesenthal of the Permanente Federation–mostly about the HealthConnect project and attendant controversies!

Matthew Holt: This is Matthew Holt at The Health Care Blog and tonight at rather short notice I am lucky to have an interview with Andrew Wiesenthal who is an executive director in the Permanent Federation which is the umbrella group that oversees the entire Permanente Medical Group in the different regions of Kaiser Permanente. Andrew contacted me this afternoon as he had seen a number of the postings on various blogs on some of the issues that have been going on with Kaiser. And I thought it would be a good chance to have a discussion with him about many of the issues, some of which have been raised in the last week about Health Connect and some others. So, Andrew, thanks a lot for agreeing to take the call. I know you are in the back of a cab there and hopefully we can have a decent conversation. So could you just give me a very brief thumbnail sketch of your role at Permanente and a little bit on how the Permanent Federation is organized.

Andrew Wiesenthal: Sure, I am a pediatrics infectious disease physician and I began my career as a member of Kaiser Permanente as a member of the Colorado Permanente Medical Group something over 20 years ago. I took care of patients and also had responsibility for quality improvement and other things in my medical group in Denver, Colorado. And, as part of that, almost 20 years ago I began to clearly see the need for an electronic health record in order to gather the kinds of information we want them to have so we could measure our quality and improve it. Ultimately I was the Physician leader for the development of what we called the CIS or Clinical Information Systems in Colorado. We finished that development and deployment work in 1998. Kaiser Permanente in Colorado does not own and operate Hospitals so the record was in the ambulatory setting. But this did serve at that time about 600 physicians and approximately 400,000 members of the Colorado regions. That was what it was doing at that particular point. Basically the physicians, nurses and staff of Kaiser Permanent in Colorado were essentially paperless from that point forward.

About two years later, the national
organization for the medical groups for the Kaiser Permanente
federation asked me to come and lead a national project. The Permanente
Federation is an umbrella org for the Permanente Medical Groups that
are in different region of the country affiliated with Kaiser
Permanente. They include very large groups that include the two in
California, the one in northern California region, the one in So
California region, that included my medical group in Colorado and so
on. So in the year 2000 I got asked to lead a national project. And at
the time part of the reason was not only had I been successful leading
a project in my own region, which was hard enough, but the program at
large in Kaiser Permanente had decided that what they were going to do
was to take what we had built as a joint development project with IBM
in Colorado, the CIS, and essentially nationalize it and expand it to
all the other regions.

Now just to interrupt you for a second there Andrew, there had also
been several different regions had gone with different systems before
that part within Kaiser.

Andrew: That’s correct.

And hadn’t here been a decision at one point to nationally go to a
system based on the southern California model based on the Oceania

No. Prior to the decision to go with the CIS there had been many
efforts over the years in Kaiser Permanente to digitize information
healthcare information and those efforts began actually in the 1960s
and 70s so in the mid to late 1990s the first efforts at creating a
kind of national electronic health records system, you are correct,
they began with what I think can best be described as a systems
integration effort. Different kinds of integration they reached had
done different things. So for example, the southern California region
has been focusing on clinical documentation in creating chart records.
Another region had been focusing on population care pool. Another
region I had been focusing on storage of data and operational data
storage. So what at first the idea was to try to take those efforts,
work them a little harder, improve them, so they could be tended
outside of the region they were working in and then integrate them.
That included the Oceania work in so cal and other work across the
country. That in retrospect is a very difficult thing to do. After
about a year it was decided that that effort would no longer be, it
just was not reasonable to try to integrate these disparate efforts. So
at that point the national organization again convened all the people
who were working on this, clinicians and non-clinicians from all the
regions and they focused on the CIS from Colorado.

I should mention that the Northwest
region had implemented a very early version of Epicare in their
ambulatory setting in 1996 and 1997. So that was one of the
considerations in the late 90s after the systems integration effort was
stopped. But it was felt at that time that the functionality and
basically the ethics were not there yet. Ready for the kinds of things
that we were doing nationally at Kaiser Permanente. So the effort was
focused on taking the CIS from Colorado and making it a national
system. By the way I had nothing to do personally with that decision as
planned as I was still working in Colorado. The decision was made by a
larger group of people working from all the Kaiser Permanente regions
not me. So does that answer the question?

Yeah and so wind the clock forward, we are now with a new CEO of the
whole organization, George Halverson. And we now have the decision to
go with Epic for Health Connect and there is some controversy around
that obviously has come out this week but give us a sense of what you
felt was going on both in the upper echelons of the organization and
federation then.

Well lets talk about this, because I had been working, at that point,
George Halverson arrived in the organization in the Spring of 2002 and
I had been working along with many other people on the CIS project
across the country and we had met with some success. We had made a
series of important technical changes, not trivial changes, to the CIS
we had had in Colorado, making it possible to use in different regions.
We had begun a deployment in Hawaii that I would say about a third to
half of the physicians and nurses in Hawaii were using the CIS System
and we were poised to start deploying in Southern California. What
George Halverson did when he arrived was to ask us to pause and to say,
"Are we doing the right thing by continuing essentially with in-house
development project?” That was really his only instruction. Because he
just said he wanted an examination of the existing alternatives which
included the possibility of continuing on the path that we were on. So
what we did was to go back and re-examine what was available…
vendors. They asked IBM which was our development partner for the
Clinical Information System which was CIS to essentially re-describe
what they would do if they were reformulating our project. And we
narrowed it down to three contenders.

That assessment started in the
summer so it wasn’t immediate. George Halverson didn’t ask for it right
away, he asked for it, probably in the June to July period of time. He
came in April of 2002, so about eight to ten weeks after he arrived he
said he really wanted to make sure that we were doing the right thing,
and to re-examine the vendor possibilities. So we did that, and I led
that effort along with a few others. It essentially was conducted
mostly by physicians and nurses, pharmacists, other clinical people.
And we assessed what the vendor offerings were. We narrowed them very
quickly to two vendors and the IBM joint development project that we
were embarked on. Then ultimately over a period of about six months
with site visits to a number of sites where the vendor products were
deployed., and a lot of questioning and detailed analysis, we
concluded, basically almost unanimously, that the Epic suite of
products was really what we wanted to do. And there are a number of
reasons why that was true. We felt that, although we…

Before you get on to that part let me just ask you — So my
understanding is the other main one you were looking at was the Cerner
suite as well as the IBM one?

We were looking at Cerner… There were only a few vendors that could
cope with our size and scale. So scalability was the question. How we
would handle it was a question.

I was going to go farther and say that at that time nobody could cope
with your size and scale. There wasn’t, and there still isn’t really,
an example of anybody that’s been that big before, which I think is
something that people are being concerned about.

Look, the CIS that we had designed was intended to be a single engine
for the entire program. It was designed that way. We never actually got
to put that to the test because we didn’t deploy it across the whole
program. But that was how it was designed, which was one of the reasons
why it was technically so difficult. And when we sat back and looked at
the assumption that we had to make a single instance implementation
work, we realized that, and this was before we went to any of the
vendors, we realized that that might be a mistake. That we didn’t want
to put ourselves in the position of having a software outage or failure
cause the entire Kaiser Permanente nation to go down. And that maybe we
were better advised to have separate instances for our different
operating regions since by and large they are very separate.

Matthew: Right.

There are members from Colorado, for example, who go to Hawaii, but the
bulk of them don’t seek care in other Kaiser Permanente regions or
elsewhere in the country. So what we thought we would do is ask the
vendors and IBM to look at a system that was divided up into geographic
instances in a logical way. And that that would protect us against
problems the likes of which, for example, could have been encountered
by the VA during the Hurricane Katrina if they had not had the multiple
instances and replica databases across the country. It would have wiped
them all out. They have a big data center in Louisiana and if that is
just the one data center it would have been a serious problem, but it
wasn’t. So we thought, and we weren’t anticipating a hurricane, we were
anticipating an earthquake. We thought it was better to have separate
instances, so we asked the vendors to bid to that. To tell us how they
would design a system that had separate instances, and that had
synchronization software, such that if a member did go to another
instance for care, that that would be a seamless transaction for the
doctors and nurses in question. They each did that. And so ultimately
what we did was to conclude that the solution that the Epic system
offered us was what everybody preferred from a functionality
standpoint. Epic had an excellent track record in terms of
implementation and deployment, successes [3 seconds of silence] reason
which was very favorable experience. There were a number of vectors all
pointed in the same direction that had us choose Epic. And we ended up
signing a licensing agreement probably about eight to nine months after
George Halverson arrived, late February of 2003.

OK, so the way you are portraying this is that Halverson said, when he
got there, to the folks who were really running the CIS project, mostly
on the Permanente side, "Could you take a look at what we’re doing?"
And you went off and sort of huddled, did the reviews of what was out
there and came back with what you thought was the new best answer.

Andrew: Right.

What level of influence did George Halverson himself have in that
discussion, and then at some point who had the unpleasant task of
saying they were writing off the CIS investment, and how did that
decision play out?

George Halverson’s role in the selection process came at the very end.
And it wasn’t just him. It was him and my boss, who is his counterpart
on the doctor side. It was him, Jay Crosson, who is the Executive
Director of the Permanente Federation, and me, and Louise Liang who is
my counterpart on the health plan side leading the project, and a
couple of other people including Cliff Dodd who was the CIO at the

We interviewed the senior executive teams from the final two
contenders, Cerner and Epic. They came to Oakland and we had eyeball to
eyeball interviews and that was where George made his contribution. But
ultimately the recommendation was made– not by him, and not by Mr.
Dodd — but by the teams of people Dr. Liang and I led. And they
concluded with unanimity that we wanted to use the Epic software. And
he accepted that recommendation. And he understood that the
consequences of it were that we would have to write off a substantial
part of the investment we had made in CIS. Because we weren’t going to
use it anymore.

Right. But the way you’re characterizing this and I think it’s fair to
say that for all of the things that Kaiser does, it systematically goes
through considerations and validation and all the rest of that good
stuff with a lot of the work Kaiser does across the board. I think it
sounds to me that you’re saying this was in that way a typical
research-based effort which happened to end up getting the approval of
the two heads, rather than being sort of imposed from them.

Oh, absolutely not imposed. Absolutely not. And if you could identify
other people such as myself who were involved in the process. Anybody.
They would all tell you that at the end of the day, everyone, and there
were probably more than 100 people involved in the assessment, many,
many, many physicians and nurses, pharmacists, and others. They would
all tell you that they all felt we should change, and that we should
move to Epic.

OK. Let’s come up to date with the recent controversy around the email
from Justin Deal and some of the other issues that are flying around
that. Let’s start with the role here of Cliff Dodd. Is his resignation,
my reading of it is that although it gets smoothed over with corporate
PR, it seems to me that there is an implication that he was involved,
he was the director of the company Tanning which was involved in some
level of work around consideration of the new system back in 2002. And
that he was a director of that company at the same time as he was
already CIO of the Kaiser Foundation Health Plan side. So is that
connected to his resignation?

Andrew: I’m not sure I understand your question, but let me give you an answer, and if is not responsive please ask me again.

Matthew: I will.

His resignation had absolutely nothing to do with the KP HealthConnect
project, and absolutely nothing to do with Mr. Deal’s email. It just
happened at the same time. He’s the CIO, was the CIO, but he did not
manage this project in any way. And his relationship to the project and
the implementation was peripheral. This was a project of the clinical
side of the organization and it was supported by many people from his
organization, from the information technology organization. But
essentially we rented them. They were brought into the project team,
the national project team and the regional project team, and we paid
re-charges of corporate funny money. That’s what a lot of corporations
do in terms of allocating resources but we and the project team used
information technology employees. They were not directed by him,
managed by him, and the project was completely independently done. We
felt it was very important that this was not an information technology
department project. This was a project that the people who were in
clinical operations were doing for the people who work in the clinical

All right so how would you characterize what Cliff Dobbs was doing do
you have a concept of what Tanning technology was doing in that
consulting project? Is that something that you were aware of what was
happening at that time?  The pretty clear implication is that Tanning,
the company he was director of at the time in 2002, prior to
him joining Kaiser was involved in a consulting project—and the numbers
being bandied around was a million dollars—which was supposed to be
evaluating which vendor was going to end up with Health Connect.

I can tell you exactly what Tanning engagement was about because it was
intended in support in the beginning at least of the CIS project that
we were doing in 2001 and 2002. Part of what we were trying to do
was—as I remember said that we were thinking we need to build a single
instance of clinical information for system software—trying to prove
the performance and scalability of the software that had been taken
from the Colorado region. And so we made a decision and we needed a
performance and scalability competency center in the organization.
Which we did not have. And at that point Mr. Dobbs decided that what he
wanted to do is build that competency center inside of his information
and technology department. And he directed that we use the Tanning
organization as a consulting firm to help build those skills. So that’s
what they did. I don’t know much about the timing of when he was or
wasn’t a director. And whether or not their were any issues related to
that. What they did for Kaiser Permanente was to help the information
and technology department build a performance and scalability testing
lab that had nothing to do with the assessment that I just described or
with the selection or with analysis of any of those vendors. Absolutely
nothing to do with that.

All right, and the other thing that is pretty clear from the emails and
information that is going around is that an unstated implication that
there is some connection between George Halverson personally and Epic.
To me that sounds very curious because Epic is as you know a very
closely held company with a very dominant CEO. And it is a private

There couldn’t be any pecuniary connection between him and Epic at all.
The CEO of Epic, Judy Faulkner, is an entrepreneur who began that
company herself. And had grown it herself. A privately held company. If
you are going to work for Epic, you must live in Madison, Wisconsin.
And there are no stockholders or other investors outside of the people
who are employed in the company. So nobody can have any kind of
monetary interests in Epic system unless they actually are there.

Right and then one thing that’s been suggested is that Kaiser should
just have bought Epic, but I think that would’ve probably been
impossible given the characters involved, and the sort of determination
of Judy Faulkner to run the company the way she wants to run it.

Andrew: Well, It wasn’t for sale. It wasn’t for sale.

And apparently it still is not. [laughter] Before we leave the IT
subject. I just want to… Do you have a sense given the controversy
and the you know, that’s come out and the sort of continued back and
forth. If there… What’s going to happen to Justin Deal, who I believe
is currently on some level of suspension?

I think that Mr. Deal is… I don’t know him. And I never met him or
talked to him. So, and I’m certainly not a human resources person so I
don’t know what is going to happen to him. I know the one thing he did
that is of concern, is to use an email function that he was not
supposed to use. You know send an email to a 140, 000 people, or how
ever many there are in our directory is only something… something
that is only reserved actually for Mr. Halverson. Nobody else is
supposed to do it. So I don’t know what will happen because of that. He
wasn’t supposed to do that.

Matthew: Well, he might have found a security issue that you didn’t know about then. [laughter]

So he used the email system in a way in which he shouldn’t have done.
And he should have known that. I don’t know whether it’s common
knowledge or not, but I certainly know it. And I’ve never used that
distribution method because that’s not done. And.. We’re a Lotus Notes
based company, not Outlook. And the way, apparently, that Lotus Notes
works, you cannot lock down that distribution, it just has to sit
there. So anybody could use it, but nobody is supposed to.

Matthew: I understand that. And I think there’s a lot of back and forth on whether what he was saying… there was information there.

Andrew: He certainly needs to be.. To
be perfectly honest, he’s taken up my time in many ways for the last
several days. I could be doing more productive things than responding
to it. And in that sense, what he did was not productive. I don’t think
that we live in an environment where people feel they cannot question
decisions. And in fact, I deal mostly with physicians, they think they
can question every decision that’s made, and do. And we end up having
better consensus based decision making because of that. Although
slower. So, I don’t think that he’ll be criticizes for questioning what
was going on. But if there’s any… I’m assuming he raised these
issues, and I don’t know that this happened. But I’m assuming when he
raised these issues to the board of directors of the Health Plan, they
were in fact looked into. And I can tell you having looked at his
email, that most of the things he raises are not true. So when they
told him that, I guess he just didn’t accept that.

O.K. One further thing he raised which is worth commenting on. My
comment on this was the board turnover that happen at around the time
that George Halverson came over, was necessary in order to get such a
large change in direction as the Health Connect project through. And
you know, you can argue that was the right thing but that’s just sort
of fairly typical thing that happens in big organizations when there’s
a big change of direction. Do you believe that the board turnover that
we’ve seen since that time has been atypical, typical? What’s your
reaction to it?

Well, first of all, it’s not my board. So, I’m looking at it as an
outsider essentially. Not very outside, but an outsider on the medical

Matthew: And we’re going to get to that in a minute.

I think it’s quite difficult, in my observation because I’ve had the
occasion to make presentations on a couple of occasion to that board.
My observation is that people who are required to that board are
actually extremely effective… Now it’s a very much more effective
board than it was before George began. They ask questions, they take
their fiduciary responsibilities very seriously and, it seems to me,
he’s made it a point to bring people to the board who will give proper
oversight to this very large process. So my sense, from my experiences
of them is that they take their job seriously…

Okay, and before we finally leave the IT side of the world I wanted to
check in what’s your assessment of the current status of Health
Connect. Where is it, which regions has it been deployed at, where is
it live and then let’s get to some of the point of criticisms we’ve
heard. What percentage of clinicians within those regions are using it
100% of the time and then what are the levels of uptime versus off line
time or down-time that you see?

There are several questions embedded there. We have eight regions, two
of them in California, two of them outside of California. We have, in
the six regions outside of California, fully deployed to all users the
Epic Care Ambulatory system, the Cadence scheduling and registration,
basically all the systems we have licensed from Epic. And an ability to
bill which we are not ashamed because we have to have it. We didn’t
have an adequate one before. And also the web content is deployed for
our members in every room except for our Ohio region, which is the
smallest … For the non-California regions, those regions 100% of
anybody who could be using Epic is using Epic for their job 100%. Every
single doctor, every single nurse, all of the clinicians and other
Allied Health professions, registration clerks, you name it, they are
using it, there is no exception. In our two California regions because
of their potentially massive size the deployments began about 18 months
ago and they are continuing. On the ambulatory side they have completed
about 50% of each of the regions. So that if each of them has something
over 5,000 jobs approximately 2,000 to 2,500 doctors and all of the
nurses and staff around them in the ambulatory setting are using it.
And every several weeks new clinics come online and when they do there
are no more paper records, they are gone, and the doctors use the
system period.

Now we are also implementing on the
in-patient side. What we’ve chosen to do there, because it seemed
simpler, was to implement some of the non-clinical systems first as
well as the in-patient pharmacy system. So of the 30 odd hospitals in
California, the in-patient pharmacy system has been replaced in all but
two, if I am not mistaken, which means all the in-patient pharmacists
are using that system. Their registration system, admission, discharge,
transfer system all of that sort of administrator-type system for
hospitals has been put in 24 out of the 30 hospitals. And we have now
begun to install the clinical systems because we waited for a number of
different reasons. We have two hospitals, one in Southern California
called Baldwin Park and one in Northern California called South
Sacramento where all the clinical documentation and all the order entry
and results recorded are now being fully utilized by all clinicians,
nurses, dieticians, pharmacists, you name it. So in those hospitals all
the people are using it. They are the alpha site. They are the tests of
the way we have chosen to configure the system in each of those
regions. We are working through the issues that, whenever you do that,
that are raised by being an alpha site. Once we have addressed these
issues we will begin to enroll the rest of the clinical parts of the
system to the rest of our hospitals. Plans have been in place for many
years they are continuing as the hospital roll out probably within the
next 24 to 36 months. Part of the reason they are taking that amount of
time is that we have to interdigitate it with the construction process.
You’re from California aren’t you, Matt?

Matthew: Right.

So you know that every hospital in the state of California has to be
seismically retrofitted or rebuilt and we are doing the same thing. So
one of the decisions we made is that if the hospital is shortly to be
rebuilt we are not going to put the system into an old hospital, tear
the hospital down six months later and then redo the system. In fact we
are rebuilding our new hospitals without record rooms and so we have to
put the system in when those new hospitals go up. The first of those
will be the new Panorama City Hospital in Southern California next

Matthew: And what do you say regarding these sort of questions around uptime and availability to the system and that kind of thing.

Andrew: We had some important
problems with downtime beginning with issues in our Silver Spring Data
Center in the east, which served our East Coast and eastern time zone
regions, and also later in our current data center mainly to do with
power, electricity. We had, for whatever reason, both power delivery
problems from the utilities, which were a small part of what we were
coping with, but problems with our UPS that posed tax with an increased
number of servers that we were adding in both data centers to keep the
system on. And so those were unexpected and caused us a great deal of
trouble and a lot of outages between 12 months ago and eight to nine
months ago. We then began to, once we had addressed and fixed those
which were very frustrating, we then began to experience problems with
our Citrix. The way we had technically chosen to deploy the system was
to use Citrix which allows us to essentially have a thin client of the
Epic software on all the work stations and cooperations and have the
bulk of this software live on servers in our data center. It was, is,
the right decision.

When we did the deployment the Citrix Company advised us to have a
single Citrix farm facing off against all our workstations. In
retrospect that was bad advice. We ended up having the largest Citrix
farm ever built and there were all sorts of unknown problems that had
never been uncovered because no Citrix installation that size had ever
been done before and what we had to do was to essentially carve up the
Citrix servers and have them align against the actual instances. And
once we did that we reduced our downtime problems from Citrix even
further. And so now we are roughly 98 to 99% system availability and we
are still having some issues with power. For example today we had
cooling systems go down in our current data center and as the heat rose
the servers started to shut themselves down. I don’t know why that
keeps popping up but we are addressing them and coping with them, but
basically we have 99% system availability for the last several months.
Keep in mind that the number of concurrent users has been rising and
has been pulling the margins forward so that our peak usage…for
example we have 26,000 some odd users on the system currently at any
one moment. If the system were to go down for a half hour that would be
13,000 user hours of unavailability and that’s not acceptable. We don’t
want it to happen and we’re working very hard to increase the
availability. None of it has to do with Epic software. Their software
has been rock solid. We are not having Epic software issues. We are
having issues around the Epic software that are serious that we are
trying to cope with.

Okay. I think I would characterize this as one of the largest, you
might want to put it as, the largest EMR deployment certainly in this
country, with the possible exception of the Veterans Administration.
And given the way you are doing it I’m not surprised that this kind of
stuff is coming up and I suspect that you’re not either even though
it’s frustrating to be there, but that’s kind of within reason to

No it’s happened… that we’re in a new era for ourselves and for
health care and we’re discovering new things that we have to discover
and we’re ready to try to handle them.

So let me ask you a couple of questions in a more general sense about
the Permanente group, because these have come up over time and I think
given what happened with the kidney transplant situation in Northern
California it’s worth just getting your take on this. Because there is
obviously a lot of controversy out there and perhaps it’s building. So
first off can you just explain for the record how the Permanente group,
the physicians’ side gets paid , and how it shares profits, whatever
you want to call it, with the health plan side. And what that means in
terms of the bonuses, income, whatever you want to call it, paid to
Permanente physicians up and down the command structure? That includes
the folks at the top as well as the folks on the front lines.

I don’t think I can comment about I’m not a payment expert or a finance
person. Well, I’m happy to tell you exactly how I was paid as a
physician in Colorado, because that’s very typical. I got a salary. And
my salary was on a market assessment, a market survey for what these
doctors earn. And that’s my specialty. And the medical group in
Colorado did its best to try to understand what the current doctor’s in
various specialties were earning, because in order to attract them you
have to at least be comparable to what they can earn in the community
at large and that was what I got. There was the possibility of a bonus
in addition to that salary. And some years we did get a bonus, not
every year and it was never very large as a proportion of my income. It
was nice to get, and certainly I’m not saying I wasn’t well paid, but
the bonuses, I mean I looked at your web site and those figures are
preposterous. And I can assure you that that’s the way that it is for
all of us. The other thing that I want to say is that health care is a
low margin business, but even for not for profits there has to be
margin. The reason that we as an entity, as an organization, have to
make some money, above and beyond health care expenses is you got to
build those hospitals, because the government requires us. And we have
to get new equipment and machines and we have to invest in things like
Health Connect, because that’s the way the future is going to go. So
three or four percent margin is for a nonprofit that’s split by

Well let’s get to the point because that’s the accusation and
unfortunately the issue, and for those of you who haven’t read the
accusation, it was not written by me but from various commenters on the
site. The accusation is that the gross profit of the health plan is
split with the Permanente group, which is a private partnership and
therefore you could argue that it’s a for-profit organization. And the
criticism is that this has incented people at Kaiser, Permanente
physicians, to do things that save money. I as most of my readers know
don’t believe that that’s the way that Kaiser physicians are incented.
Your statement there Andrew is pretty much that you’re a salaried
physician and I’ve heard Permanente physicians talk about being the
last bastion of unencumbered medicine allowed to do what they like …

That’s how I have felt my entire career and by the way I still
sometimes do consultations because I enjoy it and I’m still good at it.
And I’ve never had somebody tell me “you know don’t do that it’s too
much money.” Ever.

And now you’re a senior executive in the Permanente Federation. Are
payments in terms of bonuses performance incentives, whatever you want
to call them, related to profitability? I mean can you…? Is it the
same structure in place or…?

I’m paid a salary. And we have a bonus but it’s relatively small. And
my bonus is of course since I’m not working primarily clinically
anymore in any one of the medical groups. So I have thorough
evaluations by every body that I work with and for, and if I perform
well, if my project is going well basically, among the other things
that I have to do then I may get a bonus and I may not.

OK. Let’s turn now to the last piece, and in some ways the most
damaging one which is both the issue around what happened with the
kidney transplant situation in Northern California….

You know, I’m sorry to disappoint you but I really can’t comment on
that. And it’s really, it’s because I don’t know anything about it. I
know what I read in the newspapers and what I heard through the
grapevine and that’s not much more than you do.

All right. Fair enough, if you can’t comment, you can’t comment. And I
guess my comment is not so much you know whether, obviously something
went wrong. And as we know there’s whistle blowers and what have you
going on with that and there’s always newspaper articles. What
concerned me the most—and I don’t know this is something you haven’t
[…] —is that there didn’t seem to be  the stand up attitude either
from the health plan side or from the Permanente side about saying we
need to have some kind of a full public inquiry as to what went wrong
here. It seemed to me that that… one of the reasons I’m so glad to
speak to you is that you know there are always many different sides to
these stories, and these things are always much more complicated than
it comes out. If we don’t hear from the people directly involved—which
I guess we still haven’t really on the kidney side—now obviously
there’s legal reasons and lawyers involved and the rest of it—but if
you don’t hear that, people are going to assume the worst. I think that
that’s a lesson that the whole organization maybe is slow to learn. So,
I’m very glad that you would rather talk to me about this HIT system
because I think there’s a lot of complexity there and it’s good to get
your side of the story out because certainly other sides of the story
are coming out as well as you know.

Right, well I appreciate the opportunity. And I will say that I think
that this is, as an organization this is our first foray into talking
to someone who operates a blog. And I’m hopeful that it will be
perceived by others and seen by the organization as a useful thing to
have done. I think it was which is why I said I wanted to do it, and
did it. And I’m glad for the opportunity and perhaps more of it will

Great, well, thank-you very much. So what will happen now is this will
end up on the broadcast tonight. I’ll get a transcript made of this so
that this is available on my site in a few days, and then what I’d
encourage you and your colleagues to do is- as I think others will do-
is that there are comments, and there is continuing dialogue and I
think the answer is the more information and the more open people are
about information, the better. And if you’ve been doing the right
things that will come out. And a lot of what you’ve said shown today is
stuff that a lot of reasonable people would agree was a reasonable
approach to the problem whether or not everything went as well as it
might have done. This is a new era not only in health care, but in
communications and I think a lot of what you’re doing in coming and
talking to me is very, very helpful for that and I appreciate it. It’s
a new era for all of us because these kinds of things in the past kind
of got buried in political in fighting and now they’re exposed for the
world to see and its requires a different communication strategy. So I
applaud you for coming along in what has obviously been not that easy a
week for you especially late on a Friday night.

Andrew: And I thank you very, very much for the opportunity to talk with you.

Matthew: OK, Andrew, thanks a lot. Have a good weekend and I’ll look forward to staying in touch on this and seeing how things develop.

Andrew: Great, thank you very much.

I’ve been talking with Andrew Weisenthal, the Executive Director of the
Permanente Federation who’s in charge of the physician side of the
Health Connect project which has been in some controversy this week.
And that’s signing off on The Health Care Blog. 

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2 replies »

  1. I just stumbled onto this material today, December 2nd, and am amazed that a Permanente physician would play down the profit sharing that goes on in Kaiser Permanente. In 2004 the Kaiser Plan/Hospitals made a profit of $1.8 billion.
    Half goes to the physicians under Tahoe I, Tahoe II, and contract Attachment K. The profit leads to many things including a lush retirement package of about $15,000 a month per physician.
    The partner MD salaries are about $24,000 a month with great benefits – just called a “draw” on the total package with this Golden Pond retirement profit on top.
    The original “Founder” physician made $250,000 profit in four years of the Depression – bought up LA apartment houses.
    The trick of the “5%” profit is to note that Permanente pays for MDs, pharmacists, outpatient personnel, etc. – so the profit per physician is huge. Those that stay have to get into the “group ethic” and the “Permanente-patient” relationship.
    I get deposed on Kaiser all the time. The advance made here in this blog is to open the debate. I doubt that this discussion will stay online very long. I hope it does.
    Charles Phillips, MD, FACEP
    Former Kaiser physician

  2. The unfortunate thing about the transcript is it doesn’t quite capture Wiesenthal’s tone of petty annoyance as he gripes about how the Affair d’Email put a crimp in his personal productivity. How productive does he think Justen is for Kaiser while he lingers on weeks of administrative leave? Does he have any grasp of how Kaiser managers undercut employee productivity every day? What a narrow-minded, self-centered, egotistical ass.