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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

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Evolution of Kaiser Permanente

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evolution of kaiser permanente

Evolution of Kaiser Permanente

SeemaMeraj, MD

North Shore University Hospital

  • 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
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
  • 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

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
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
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

Kaiser Permanente News Center http://xnet.kp.org/newscenter/aboutkp/historyofkp.html

Sacramento Business Journal http://www.bizjournals.com/sacramento/stories/2009/08/17/story11.html?q=chris%20rauber%20kaiser

The rise and fall of HMOs: an American health care revolution. http://books.google.com/books?id=tK71nX5LxSEC&printsec=frontcover&source=gbs_atb#v=onepage&q=kaiser&f=false

The Permanente Journal http://xnet.kp.org/permanentejournal/fall97pj/history.html