On July 30, 1965, President Lyndon B. Johnson signed the Medicare Bill into law, immediately granting 35 million older and disadvantaged Americans access to the medical care they needed. He praised the country’s aging World War II veterans as the nation’s “prideful responsibility [who] are entitled … to the best medical protection available,” and thanked former President Harry S. Truman, one of the program’s original architects, for “plant[ing] the seeds of compassion and duty which have today flowered into care for the sick, and serenity for the fearful.”
Although “medical care as a right” was a boon to those who would receive coverage, the question of exactly how a national health insurance system would function in terms of administration, organization and approach of care delivery quickly enmeshed government and private sector, industry and commerce, in a heated debate that continues today. And Kaiser Permanente, as one of a number of private health plans established prior to Medicare’s inception, was swept up into a national health care tornado.
An aging population
Following 16 years of depression and war, 1946 was a turning point as America’s peacetime economy boomed. The workforce filled jobs and factories, and most workers received health coverage through their employers or unions. The aging and disadvantaged segment of the population, however, was falling behind. Accessibility and affordability of health care had quickly become out of their reach, yet their numbers continued to grow: A health care crisis was looming.
No one argued that there wasn’t an urgent need for large-scale care; however, the debate over how to structure and administer it was just ramping up, and would intensify over the next decade.
The Medicare proposal
The Medicare program was characterized by 1) government administration of the program and funding through payroll taxes, and 2) a continuation of the prevailing fee-for-service model of health care. This second characteristic directly conflicted with Kaiser Permanente’s model of prepaid health care. The organization saw the fee-for-service system not only as a challenge for its own structure to integrate, but maybe more importantly, as a faulty approach to delivering health care.
“Under the prevailing fee-for-service system, income of doctors and hospitals is directly related to the volume and price of the services they provide. Illness produces income,” read Kaiser Permanente’s 1965 annual report.
Scott Fleming, Kaiser Permanente attorney and executive, echoed that sentiment: “[T]he industry’s purpose is wrongly conceived; the industry should develop the capability of delivering comprehensive health care for people rather than merely providing episodic treatment for patients.”
Kaiser Permanente’s approach of total health — health care versus sick care — influenced the national debate early on. Other private and voluntary health plans also joined the fray, as they braced for the impact Medicare would bring.
Medicare enacted July 30, 1965
While key Kaiser Permanente personnel remained active in policy dialogue around Medicare’s structuring, the organization had been intensely preparing for the program’s integration into its own (very different) system. Its priority was to maintain its standard of excellent care for all members through the coming transition — a shift that would bring an influx of new Medicare beneficiaries and see the conversion of a portion of its existing members to Medicare covered. Kaiser Permanente’s health plan reached out to members, encouraging those who were eligible to enroll in Medicare, and adapted benefits and coverage to maintain best care for beneficiaries.
It also undertook a massive training effort in its facilities to ensure that staff was prepared and the integration was smooth. The effort paid off — implementation was a huge success. Life magazine’s Sept. 3, 1965, issue reported how catastrophic Medicare implementation was for most medical facilities, but spotlighted Kaiser Permanente as a success story.
An evolving program
Medicare has evolved greatly in the five decades since its enactment. It has seen major reforms, amendments, new legislative acts and bills, and has been the subject of ongoing scrutiny around budgetary, administrative and quality issues. The heated debate continues — how best to administer it, fund it, and ensure that it’s efficient yet effective.
That the argument continues isn’t surprising, given the mammoth, complex system that it is.
Today’s seniors benefit from early visionaries
In 1958, Kaiser Permanente consultant and health care economist Avram Yedidia voiced the imperative to “face the responsibility of providing health care or protection for [those] which we presumably show the most concern — the sick, the unemployed, the retired, and the aged.”
Despite Medicare’s growing pains over the last 50 years, older and disadvantaged Americans continue to benefit from accessible, affordable health care through the program. They receive resources and coverage, guaranteed, just as the program’s early architects envisioned.
As a participant in Medicare since the program’s inception, Kaiser Permanente has been influential in improving the program’s service model to deliver better coverage and care to seniors. For example, it pushed for a capitation model — resulting in Medicare Advantage — which serves as a substitute for fee-for-service, and it helped develop the Medicare Star Quality Ratings, which rewards health plans for excellent service and care.
Over the past five decades, Kaiser Permanente has delivered high-quality health care to millions of Medicare members throughout their lifetimes. As a recognized frontrunner of leadership and innovation in Medicare, Kaiser Permanente has and continues to build initiatives, programs and institutes for the improvement of health care and coverage for seniors. Its Medicare plans in California consistently receive top national ratings for excellence in care and service from the U.S. Centers for Medicare & Medicaid Services, and its health screening rates are among the best in the nation, according to the 2014 National Committee for Quality Assurance’s Quality Compass® data set.
The bold call for compassion by Medicare’s early visionaries fundamentally changed the shape of health care for older Americans today and beyond — and at 50, Medicare continues to serve those who need it most.
Final essay in a series on Kaiser Permanente’s 70th anniversary
One of Kaiser Permanente’s key features is that it is an “Integrated health care system” – meaning it seamlessly provides care and coverage together and provides a wide range of services under one roof, whether in a Kaiser Permanente medical office or hospital or at a contracted facility. But in 1945 “integrated” also held another important meaning when the health plan was opened to the public – it reflected a deep commitment to being one of the first health care providers in the United States to have racially integrated hospitals and waiting rooms, as well as an ethnically diverse workforce, including physicians and allied health professionals.
During World War II, compliance with federal law (such as the Fair Employment Practice Committee) as well as decent best practices meant that employees were treated without institutional discrimination. An estimated 20,000 African Americans, along with many Chinese Americans, Native Americans, and Hispanic Americans, worked in the Kaiser shipyards. Kaiser Industries took great pride in this ethnic and racial diversity, featuring stories in the shipyard newsletters. A caption for a photo of an elegantly attired African-American female shipyard worker launching the Liberty ship S. Hall Young boasted: “How’s this, Adolf? It’s Richmond’s answer to your efforts to split America into warring racial groups.”
Industrial health care covered all workers, and the affordable supplemental health plan that Sidney Garfield, M.D. created for workers and their families in the Kaiser shipyards were equally open. In a time when the Civil Rights movement was just coalescing, racism in America was pervasive. Access to health care was no exception, yet the Permanente Foundation Hospitals took the high road.
Journalist Nick Bourne wrote about the Permanente Health Plan in the San Francisco News on October 7, 1943. He noted:
Illness knows no color line here. Red-helmeted men, women welders, Negroes lined up for a checkup by the busy young doctors. In one double room was Miss Katherine Rossi, shipyard loan office employee, here from Duluth, Minn., for six months; ill six months from skin trouble. A Negro woman was in the adjoining bed. “So help me!” declared Miss Rossi. “I’ve been in hospitals before, but never one like this. It’s sure swell. I don’t know what I would have done.”
The International Longshore and Warehouse Union newspaper The Dispatcher favorably remarked in 1945:
“The hospital’s facilities are open to all groups with no segregation of patients because of creed or color.”
In 1946, the year after the Health Plan was opened to the public, several local policemen visited the Oakland hospital with an eye to join. Permanente medical economist Avram Yedidia recalled the event:
“. . . The police chief said to me, ‘You know, when we walked through, I saw that you had some Negroes and whites in the same room. I don’t think we like that.’ “As I can recall, I responded, ‘Do you know this plan started that way, with blacks and whites in the shipyards, and that’s the way it goes. They worked together, and they were sick together.’ ” I told the police chief: ‘Those who don’t like it shouldn’t join the plan.’ ”
Diversity and inclusion continues to be a guiding principle at Kaiser Permanente. In 2013 Diversity Inc. magazine ranked Kaiser Permanente third in their “Top 50” national corporations, noting a workforce that at all levels reflects high percentages of women, Blacks, Latinos and Asians and has a diverse board of directors. This year Kaiser Permanente moved up to #2. Ronald Copeland, MD, Kaiser Permanente’s chief diversity and inclusion officer, recently affirmed the organization’s progress and challenge:
We must robustly, and in a systematic way, embrace multiculturalism and differences of our workforce and our member population to make sure that everybody’s meaningful needs are met in a personalized way…That is a journey we have been on for nearly 70 years and much progress has been made, but we still have a ways to go in order to become truly inclusive.
It’s about understanding and owning your own talents and vulnerabilities, and being comfortable and humble enough to share with and learn from others. It is about seeing and respecting the value in other people who are different than you and expecting them to do the same in return.
Over the past 70 years Kaiser Permanente’s commitment to nondiscrimination has moved well beyond race and ethnicity, to include gender, generation, sexual orientation, physical, and cognitive abilities in the pursuit of equality without exception. And, as a testament to the acceptance and support for such practices, 10 million people have chosen to “join the plan.”
Happy 70th anniversary, Kaiser Permanente.
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Fourth in a series on Kaiser Permanente’s 70th anniversary
“Problems are only opportunities in work clothes.”
– Henry J. Kaiser.
Innovation has been a part of Kaiser Permanente’s culture from the beginning. While many people think of a new technology or exotic surgical device when they hear the term “medical innovation,” Kaiser Permanente’s view is much broader.
From its very beginnings, Kaiser Permanente proposed a radical – and innovative – shift in the delivery of health care.
When Henry J. Kaiser and Sidney Garfield, MD., were taking care of the almost 200,000 workers on the Home Front during World War II, few of them had ever experienced routine medical care. People feared the expense of seeing a doctor, and delayed seeing caregivers, thus guaranteeing a more difficult treatment and a less positive result. But because the prepaid Permanente Health Plan was affordable and run under the same system that was already handling their industrial care, it changed how people accepted early treatment. Dr. Garfield himself was amazed by this phenomenon during his “dress rehearsal” of medical care for worker families at Grand Coulee Dam in 1938:
One of the most impressive lessons we learned was, prior to the family plan, you would go walking through our hospital and you would see quite a few very sick women and children – ruptured appendices, bad pneumonias and so forth, even diphtheria cases. Once the plan was in operation for a while, that changed. You no longer saw ruptured appendices, we saw early [inflamed but not ruptured] appendices. Never saw bad pneumonias, we would treat them early. And diphtheria entirely disappeared. In other words, people, once the barrier of cost was removed, were coming to us earlier and we could treat them earlier and keep them from getting complications and, I’m sure, keeping them from dying.[i]
Later, in the World War II shipyards, Dr. Garfield experienced the same conditions but on a much larger scale. He reflected on the challenges of treating the rookie workers:
Some of them were in such bad condition we jokingly would refer to our shipyard workers as a walking pathological museum. But in spite of all of that fact, they really built ships and built ’em fast. And not only that, but our plan was able to succeed and work and be sustaining with that tremendous load of all those sick people to take care of. It was a tremendous demonstration of the merits of our health plan and of its value of its economics.[ii]
Other preventive features of the shipyard health care plan included a rigorous process for assigning workers to suitable job classifications, training for the women in the industrial workforce, and extended child care services. And during the war, some of the more conventional medical innovation took place as well – such as Morris Collen, MD’s groundbreaking work on using penicillin to treat pneumonia cases.
Fast forward to the present, and Kaiser Permanente is continuing to promote preventive health services while also conducting high-quality, innovative research. Kaiser Permanente is coordinating a national health initiative to improve colon cancer screening rates to 80 percent by 2018, with a special emphasis on screening minorities and those without health insurance. And when a screening does detect cancer, a progressive Oncology Clinical Trials program selects promising new medications and techniques for members to consider, even before they are FDA approved and commercially available.
In Portland, Ore., Kaiser Permanente led a study showing that mailing test kits to patient homes improved colon cancer screening rates by 40 percent in underserved communities. Sometimes basic delivery systems — like the U.S. mail — can deliver innovative health care solutions.
As Henry Kaiser noted, not all medical innovations need to come forward as bright, shiny objects. Some of the most important ones appear in simple work clothes.
Short link to this article: http://k-p.li/1KmGi87
[i] “Sidney R. Garfield in First Person: An Oral History,” by Lewis E. Weeks, Hospital Administration Oral History Collection, 1986.
[ii] Dr. Sidney Garfield interview by Dan Scannell, 9/1978.
Second in a series on Kaiser Permanente’s 70th anniversary
From providing health care to workers and their families at Grand Coulee Dam to the massive medical program in the World War II shipyards, Henry J. Kaiser believed that cooperating with labor was more productive than fighting it. This institutional philosophy had profound positive implications on the nascent public postwar health plan. As the war was drawing to a victorious close – Victory in Europe had been announced on May 8, 1945 – Henry J. Kaiser’s health plan began to prepare for a peacetime economy by expanding beyond its own employees. The plan would be opened to the public by late July.
Given Henry J. Kaiser’s support for labor, it was not surprising that labor unions would be among the early member groups. Bay Area workers – Oakland city employees, union typographers, street car drivers and carpenters – embraced the Permanente Health Plan and its emphasis on preventive medicine.
On June 7, 1945, the Stewards and Executive Council of the International Longshoremen and Warehousemen Union’s Oakland unit voted unanimously to make coverage in Permanente a part of its future negotiations with employers. The executive council also requested that employers pay for the plan’s premiums.
Founding physician Sidney Garfield, MD., reflected on that support:
So [the postwar health plan] gathered momentum… [In 1949] the longshoremens’ union came to us and said, “We would like you to take over all our members.” They had about thirty thousand here and the [San Francisco] Bay area. They said, “We won’t give them to you unless you do it up in Portland, Seattle, Los Angeles and San Diego. We want to give you the whole thing.”
Then Joe DeSilva of the Retail Clerks’ union called up and wanted to see me. He came up here and said, “I want you to set up a health plan for our workers in Los Angeles.” I guess he had about thirty thousand workers plus families of I don’t know how many. I told him that we would need facilities because we couldn’t depend on using other hospitals because some day they would boycott us probably. So he said, “I’ll pay you several months dues in advance if that will help you build a hospital.”[i]
Years later, Kaiser Permanente CEO David Lawrence would express that relationship succinctly:
“If not for organized labor’s active marketing support immediately following World War II, it is unlikely that Kaiser Permanente would exist today.”[ii]
But labor did not just mean health plan members, labor employees were also a key part of delivering health care. A year after opening up to the public, the Permanente Health Plan signed its first nurses contract with the hospital in Oakland and the field hospital in Richmond, making it the first nurses’ union in the U.S. to do so.
On July 26, 1946 the Nurses Guild Local 699, affiliated with the Congress of Industrial Organizations, announced that they approved a contract covering wages and working conditions with Permanente Hospital of Oakland and Richmond (as well as medical staff at Kaiser Steel in Fontana). Lora Lee Swan, nurse consultant for the Guild, declared:
This is the first Alameda county hospital in which nurses have been allowed their democratic rights to a free election in choosing their bargaining agent. The precedent set here is truly a great victory for working nurses everywhere. [iii]
In 1997, after years of labor turmoil within Kaiser Permanente and competitive pressures within the health care industry, Kaiser Permanente and the Coalition of Kaiser Permanente Unions formed their groundbreaking Labor Management Partnership. Today, the partnership covers more than 100,000 union-represented employees in 28 local unions as well as 14,000 managers and 17,000 physicians in California, Washington, Oregon, Colorado, Georgia, Hawaii, Virginia, Maryland and Washington, D.C.
[i] “Sidney R. Garfield in First Person: An Oral History,” interview by Lewis E. Weeks, 8/22/1984.
[ii] KP CEO David Lawrence, “Tentative national partnership announced between AFL-CIO and Kaiser Permanente,” Newswire (KPNW) May 2, 1997
[iii] “CIO nurses approve pact at Permanente,” People’s World, August, 1946
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First in a series on Kaiser Permanente’s 70th anniversary
During World War II, Henry J. Kaiser’s 50-cent-a-week nonindustrial health plan for his shipyard workers was so overwhelmingly popular that the Permanente Health Plan had trouble keeping up with enrollment and facilities. But as the war neared its end, plans had to be made about whether or not to keep it going.
On July 21, 1945, Henry J. Kaiser and founding physician Dr. Sidney Garfield let it be known that their proven system of care would be open to the general public. The San Francisco Chronicle article led with this:
Henry J. Kaiser’s Permanente Foundation Hospital in Oakland, built to provide pre-paid medical care for 100,000 shipyard workers, has been opened to the public. Clyde F. Diddle, administrator of the $2,000,000 hospital at Broadway and MacArthur Boulevard, said that any individual may walk into the hospital and apply for complete, prepaid medical care. Groups of 25 workers under one employer may also obtain medical service. The 300-bed hospital has 80 full-time physicians and surgeons, laboratories, clinics, and pharmacies.[i]
Before this, many industrialists had adopted programs to improve their workers’ health, but Henry J. Kaiser was the first to embrace the public.
In September of 1945, the Permanente Health Plan in the Northwest (Portland, Ore. area) followed suit. The only Kaiser hospital in Southern California was at the Fontana steel mill, and it would open to the public as well. In 1984 Dr. Garfield recalled that decision:
The war ended, and we lost our [shipyard] membership, [but] the [Fontana] steel plant still continued. We had the facilities, we had a basic organization, and we had quite a few doctors who wanted to continue in prepaid medicine. I built up a contingency fund for this very purpose. I knew we would have a lapse at the end. We had [a] contingency fund. The whole thing was sort of a survival kit. The doctors decided they would like to continue. We had the organization. So we decided to open the plan to the community.
This shift had a profound impact on the wartime physicians working for the plan. Kaiser shipyard doctor Morris Collen, MD, reflected on this transition in his 1986 Regional Oral History Office interview:
We were pleased when we were told that Dr. Garfield had decided to open the plan to the community. Already workers and their families were taken care of, so we were taking care of dependents–women and children. We had dropped down from 90,000 members to about 14,000 members in ’44. Of course, in order for us to survive, we had to get more members.
Dr. Garfield called all the physicians together at a noon meeting, and he told us that, with the war over, we were now released from Procurement and Assignment; we could do whatever we wanted. Dr. Garfield told us that he hoped that most of us would want to stay, and he’d find jobs for us; and if not, he thanked us. Quite a few left. That’s when I made my decision that I’d enjoyed very much what I’d been doing; I wanted to keep doing it, and so I told him that I would like to stay. He said fine, and that’s how I continued on. Most of the key physicians did stay on, and became the nucleus for the partnership.
And in 1962 Cecil Cutting, M.D., first executive director of The Permanente Medical Group, recalled the tension of those early years:
In the shipyards there’d been no lack of patients. A busload would arrive at the Richmond field hospital every 20 minutes. But as war ended and members remaining in the area wanted us to continue their medical care, we were faced with a big decision. Did the community want the pre-paid, group practice medical care that had worked well in an industry? Would early-diagnosis and preventive medicine pay off for the members, and for the Plan?
Some of our physicians had accepted our type of practice only as a war measure. When the war was over they went into independent practice. But a core of physicians who believed in this method, and liked it, decided to remain. We had some lean years and hard struggles.
Gradually the loyalty of members and our responsibility in maintaining economy and quality in medical care, paid off. [ii]
And the rest is history.
More 70th anniversary articles:
Kaiser Permanente’s Early Support from Labor
Kaiser Permanente as a National Model for Care
Kaiser Permanente’s Innovative Spirit of Prevention and Health
Kaiser Permanente’s History of Nondiscrimination
[i] “Pre-paid Medicine: Kaiser Hospital in Oakland is Opened to the Public,” S.F. Chronicle, July 21, 1945.
[ii] “Leaders Tell How – and Why – Health Plan Grew,” KP Reporter, May, 1962.
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The World War II Home Front superhero cartoon strip Supermac ran in the weekly Kaiser Richmond shipyard magazine Fore ‘n’ Aft between September 8, 1944, and March 30, 1945. An earlier post explained the evolution and role of this remarkable wartime graphic narrative, and so far we have shared the first 14 strips – view the first seven and the second seven. In this conclusion, Supermac foils a devilish Nazi sabotage plot that involves rats and compressed air, at which point he gets drafted and the story ends.
The strip was cryptically credited to “P.T.C.”, which turns out to have been a collaborative effort. We know that one of the contributors was artist Emmy Lou Packard – the “P” – but the identities of the other two creative talents remain a mystery. Emmy Lou Packard left the shipyards October 26, 1945.
An exhibition of Emmy Lou Packard’s shipyard illustrations will be on display at the Rosie the Riveter/World War II Home Front National Historical Park in Richmond, Calif. from August 5, 2015 through the end of the year.
These final strips ran from January 12, 1945 until March 30, 1945. Click on them to enlarge.
Supermac- gone, but not forgotten.
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“We found our voice, we found our place.” Phyllis Moroney, Kaiser Foundation School of Nursing class of 1957 and President of the KFSN Alumni Association Board.
The powerful legacy of the Kaiser Foundation School of Nursing was honored on June 20 when a sea of white caps came to dedicate a sculpture installed at the new Kaiser Oakland hospital, a few hundred yards from the site of the original school. Nurse Moroney, herself a Kaiser baby of World War II Kaiser shipyard workers, hosted this culmination of a multi-year project.
At the end of World War II when the Permanente health plan opened to the public, qualified nurses were in short supply. The Permanente Foundation established the school in 1947 to train more nurses and help alleviate the shortage. Before it closed in 1976 it had produced 1,065 nurses and boasted numerous accomplishments. It trained a diverse pool of highly skilled nurses, and student scores in State Board Examinations consistently ranked in the top three of all California programs, including university schools. California’s first nurse practitioners were trained there by physicians from The Permanente Medical Group so they could better work in a pre-paid healthcare system that focused on prevention and wellness.
Betty Saletta’s sculpture is an homage to all nurses in the profession, and the nurse’s image was a composite of characteristics of multiple ethnicities, representing the diversity of KFSN students.
The dedication was attended by scores of nurse graduates and Kaiser Permanente officials and physicians, including James Vohs, Health Plan and Hospitals CEO 1975-1992. The school administration reported to Vohs, and he recounted efforts to keep the school alive when California changed its accreditation requirements. Dr. Marilyn Chow, Vice President of National Patient Care Services, pointed out that nurses constitute about a third of the Kaiser Permanente workforce – over 50,000 people. Dr. Chow reminded us of how far the nursing profession has come since the earlier days, when many treatment responsibilities previously only held by physicians are now widely practiced by today’s nurses.
Dorris Facey Lovrin was present, a proud graduate of the first class in 1950 who retired last year after 63 years of nursing at Kaiser Permanente. Also present was Clair Lisker, class of 1951A, who became a faculty member of the school of nursing early on and touched the lives of every single student of the school. She was Chief Nursing Office of the Oakland Hospital before retirement. Other nurses added their support for this tribute.
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