Sunday, August 16, 2009

Historical bacground of a working Not-For-Profit Health Care Group

Medicacare Advantage plans (private ins wrapped around personal medicare ) works and provides smaller premiums because the govt funds at 14% higher to private insurance .

Enter Kaiser Permanente
(a model for Not for Profit Co-Op Insurance groups)

Excerpts from "About" Kaiser Permanente website

Kaiser Permanente evolved from industrial health care programs for construction, shipyard, and steel mill workers for the Kaiser industrial companies during the late 1930s and 1940s. It was opened to public enrollment in October 1945.


The organization that is now Kaiser Permanente began at the height of the Great Depression with a single inventive young surgeon in the middle of the Mojave Desert. Sidney Garfield, MD, looked at the thousands of men involved in building the Los Angeles Aqueduct, . He borrowed money to build Contractors General Hospital; six miles from a tiny town called Desert Center, and began treating sick and injured workers. Dr. Garfield was having trouble getting the insurance companies to pay his bills in a timely fashion. To compound matters, not all of the men had insurance, so he often was left with no payment at all for his services. Soon, the hospital’s expenses were far exceeding its income.


Prepayment System is Born

Harold Hatch, an engineer-turned-insurance agent suggested that the insurance companies pay Dr. Garfield a fixed amount per day, per covered worker, up front. This would enable Dr. Garfield to emphasize maintaining health and safety rather than merely treating illness and injury. Thus, “prepayment” was born. Thousands of workers enrolled, and Dr. Garfield’s hospital became a financial success.

As the aqueduct project wound down, Dr. Garfield prepared to leave his desert hospital and start a solo practice in Los Angeles. But he got a call from another industrialist. This time, the problem was providing health care to 6,500 workers and their families at the largest construction site in history—the Grand Coulee Dam.

He recruited a team of doctors to work in a “prepaid group practice.” The method again was a smashing success and a big hit with the workers and their families. But as the dam neared completion in 1941, it seemed once again that the grand experiment was reaching an end.

America’s entry into World War II brought tens of thousands of workers—many of who were inexperienced and in poor health already—pouring into the Kaiser Shipyards in Richmond, Calif. Now, Henry J. Kaiser had the problem: How to provide health care for this teeming mass of 30,000? Kaiser convinced Dr. Garfield he could solve the problem, but it took some special wrangling—the surgeon was already scheduled to enter active duty with his U.S. Army Reserve unit .

At Kaiser’s request, President Franklin D. Roosevelt released Dr. Garfield from his military obligation so he could organize and run a prepaid group practice for the workers at the Richmond shipyards.
So, Dr. Garfield and his health care delivery system came to the San Francisco Bay Area, and formed the association with Kaiser that would imbed itself in the organization and continue until the present day.


Thus, the organization known in modern times as Kaiser Permanente was born. We are still a working partnership of two organizations: the not-for-profit Kaiser Foundation Health Plan and Hospitals, and the Permanente Medical Groups.
© 2009 Kaiser Permanente

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