Kaiser Has Lost Its Way
Kaiser Permanente built its reputation around helping communities thrive, but today it’s becoming just another corporation. Kaiser’s CEO is paid $16 million a year as the leader of this “non-profit” that actually made $11 billion in profits since January 1, 2017. The company is sitting on $37.6 billion in reserves, and it pays 36 of its executives more than $1 million each.
Meanwhile, Kaiser is under-serving patients with the lowest incomes. Medicaid provides healthcare for 21 percent of Americans, but Kaiser’s Medicaid patient volume is less than half that figure. In California, Kaiser’s largest state, only 8 percent of its in-patients are covered by Medi-Cal compared to an average of 27 percent at other non-profit hospitals.
“NON-PROFIT” KAISER IS ACTING MORE LIKE A “FOR-PROFIT” CORPORATION.
We are the 80,000+ caregivers of the Coalition of Kaiser Permanente Unions and we’re calling on Kaiser to live up to its promise of “thrive” and get back on track as the provider that offers patients excellent care, advocates for communities, and makes workers proud.
Healthcare giant Kaiser Permanente employs nearly 220,000 people nationwide. But lost amidst its “Thrive” advertising campaign is the reality that the non-profit’s decades-long business model has increasingly changed from one of being a self-described “community-oriented health provider” to one resembling any other huge, for-profit corporation.
Consider these facts:
- Kaiser is sitting on massive reserves (currently $37.6 billion – more than the city budgets of Los Angeles, San Francisco, Oakland, Sacramento, San Jose and San Diego combined);
Kaiser reports huge profits ($11 billion since January 1, 2017), and $5.2 billion in the first half of 2019 alone;
Kaiser pays lavish compensation to top executives. Its CEO received a 29% pay increase in 2015, a 66% increase in 2016, and a 60% increase in 2017, a year in which he was paid more than $16 million.
At least 36 Kaiser executives are paid $1 million a year or more.
- Despite its obligation to act on behalf of the community, Kaiser underserves Medicaid patients. Medicaid provides healthcare for 21% of Americans, but Kaiser’s Medicaid patient volume is less than half that figure.
- In California, only 8 percent of Kaiser’s inpatient volume is Medi-Cal (Medicaid), compared to an average of 27 percent at all non-profit hospitals in California. Moreover, Kaiser owns 18 of the 25 hospitals with the lowest percentage of Medi-Cal patients served.
- Kaiser recently got entangled in an embarrassing political scandal in Baltimore where it paid $114,000 to buy copies of the former mayor’s book and then received a $48 million contract to insure city employees. The IRS and FBI raided the mayor’s home and the Maryland governor has called for an investigation. The mayor resigned in May 2019.
- In 2013, Kaiser paid a $4 million fine, one of the largest insurance fines ever in California, when it was found to have violated state law for failing to get mental health patients into treatment quickly enough. Even then, the problem was not corrected, and four years later Kaiser reached an agreement with the state to deal with its persistent failure to provide timely behavioral health services. Two years later, problems with understaffing mental health services have arisen again with patients and workers exposing a lack of staff.
WHAT DOES KAISER HAVE TO HIDE?
Transparency is a longstanding problem with Kaiser. Under California state law, the company is exempt from providing pricing data on a per facility basis (like all other medical providers in California) and does not have the same sunshine requirements for its insurance business as other payers. As a result, the company only releases prices for two regions, “Northern California” and “Southern California,” thereby obscuring prices at any one facility and making it impossible for a patient to compare prices and performance from one hospital to another, even those within a few miles of each other.
In Los Angeles, for example, you can get detailed information about Cedars-Sinai Medical Center, but if you drive down the street to Kaiser Los Angeles Medical Center, you cannot. The company has turned its lobbying might against legislation, SB 343, moving in the state legislature that seeks to end that exemption. The bill is sponsored by Dr. Richard Pan, who chairs the Senate Health Committee.
Finally, the company’s declining labor relations raise additional doubts. From aggressively trying to muzzle workers’ voices to outsourcing their jobs, to attempting to cut raises and increase healthcare costs for employees, Kaiser has drastically departed from its days as an industry leader eager to partner with employees to improve patient care, and proclaiming itself the best place to give and receive care.
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