“Thrive,” the ubiquitous motto of Kaiser Permanente — one of the nation’s largest not-for-profit health plans — has now become the ironic symbol of a corporation that has lost its way.
The Kaiser Permanente I worked at for 30 years was a welcome member of the community, providing cost-effective healthcare, creating good jobs, and forming the largest and most-effective labor-management partnership in America. Together with its employees, Kaiser formed thousands of working groups in its hospitals and medical offices to tackle problems, improve efficiency, and create an atmosphere of cooperation — all with the goal of making Kaiser the best place to receive and deliver care.
For many years it worked. Kaiser was recognized as an innovative leader in the industry, a stalwart of the community, and a model of integrated healthcare that even served as a blueprint for parts of the Affordable Care Act.
Over the last decade, however, Kaiser’s business model changed, and the bright skies that always seemed to hover over the company have darkened.
The latest example is Kaiser’s involvement in what has been described as a “pay to play” scheme with Baltimore Mayor Catherine Pugh, who resigned on May 2, 2019. Kaiser Permanente was awarded a $48 million contract in 2017 with the city of Baltimore to provide health insurance to city workers after purchasing $114,000 in children’s books written by the Mayor, who controls the city spending board that awarded the contract.
The problems, however, go much deeper. 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. Four years later Kaiser reached an agreement with the state to deal with its persistent failure to provide timely behavioral health services, and just last month the same problem was raised again by Kaiser mental health professionals.
Most people are not aware that Kaiser is a non-profit corporation that operates as a charity, an arrangement that in theory means it gets massive tax breaks in exchange for serving the community. But today, Kaiser’s operations as a non-profit are nearly indistinguishable from those of a for-profit corporation:
- Kaiser has made $9.4 billion in profits over the last three years;
- Kaiser pays its CEO more than $16 million a year;
- Thirty-five additional executives are paid at least $1 million a year;
- Kaiser is sitting on approximately $31.5 billion in reserves, more than the city budgets of Los Angeles (where I live), San Francisco, Oakland, Sacramento and San Diego combined;
- Despite its obligation to act on behalf of the community, Kaiser underserves Medicaid patients. While Medicaid funds healthcare for 21 percent of Americans, Kaiser’s Medicaid patient volume is only a fraction of that at 9.6 percent;
- To save money, Kaiser has begun laying off workers and contracting out their positions, undermining patient care and eliminating good paying jobs that communities rely on; and
- Kaiser is inappropriately using technology to cut corners. Recently, the company received withering criticism when it rolled a robot with a doctor on a television screen into a hospital room in California to talk about end-of-life issues with a critically ill patient and his granddaughter.
Those of us with a vested interest in Kaiser who have observed the company over the years were disappointed that the corporation was ensnared in the Baltimore scandal, but not surprised.
We now see that the company’s “thrive” refrain, which at one time appropriately described Kaiser’s role in the community, no longer seems to apply to anyone but a small group of executives at the top of the corporation.
Dollie Lee is a retired Kaiser Permanente employee who worked for 30 years as a physical therapy technician with the company. She lives in Los Angeles.