, Heritage writer
When the Permanente Health Plan was made available to West Coast members of the International Longshore and Warehouse Union in 1950, it was a classic example of “be careful what you wish for.”
The Permanente plan, robustly serving workers and families for Henry J. Kaiser’s home front industries, expanded to the public on July 21, 1945, less than a month before the end of World War II. It was a heady and challenging period, and labor unions were to become major group members of the postwar Permanente. Why? Because, for the first time, unions could negotiate health coverage.
The key legal ruling was the 1948 decision by the Seventh Circuit United States Court of Appeals in the case of Inland Steel Company vs the National Labor Relations Board. This precedent affirmed the legal obligation of employers in unionized companies to include health and welfare benefits as part of labor negotiations.
In 1950 The International Longshoremen and Warehouse Union and the Pacific Maritime Association requested the Permanente Health Plan provide care for all 22,500 of their workers up and down the West Coast; The ILWU became the first major group enrolled in the Health Plan.
At the insistence of ILWU leader Harry Bridges, Permanente was the only choice for the union members. This exclusivity violated Permanente policy that membership should be voluntary, which understandably caused some dissatisfaction with ILWU members. It wasn’t until 1954 that ILWU members were offered a choice of a second plan after Permanente consultant and economist Avram Yedidia convinced Bridges of the importance of dual choice; only 10 percent would leave Permanente.
But there was a problem with capacity. Bridges brought in thousands of new members to a plan that was recovering from a postwar slump and had limited facilities.
For the major ports of Oakland and San Francisco, where the Permanente hospital and clinics were already established, that wasn’t a problem. Looking north, ILWU members in Seattle got care through an agreement with the Group Health Cooperative of Puget Sound and other providers while Portland-Vancouver union members were served by Northern Permanente. Southern California would involve an estimated membership of more than 11,000 longshoremen, but the only Permanente hospital was at the Fontana Steel Mill, 60 miles from the ocean. Not exactly longshore territory.
Bridges wanted a Permanente facility in the San Pedro harbor area where there was a high concentration of members. His promise convinced Permanente that this is the time and the place to expand. Enter the Harbor City Hospital, proud pioneer of the Los Angeles South Bay service area.
Temporary facilities began immediately. A history compiled for the 60th anniversary of the South Bay area described the first San Pedro clinic:
Dr. Ray Kay (founder of the Southern California Permanente Medical Group) and Medical Director Dr. Ira “Buck” Wallin found a working clinic at 599 W. Ninth St. (and Grand Avenue) already occupied by doctors who were, at first, willing to share space. They even agreed to help take care of the longshoremen after hours. That arrangement was short-lived, however. Spooked by the economic threat posed by group practice, the doctors in the community gave the cold shoulder to Wallin’s staff and anyone who associated with them professionally or socially. The three fee-for-service doctors with offices in the shared clinic buckled under the pressure and vacated the premises.
Permanente promised the ILWU that they would build a new hospital in the Wilmington-San Pedro area, but progress was slow. The new Kaiser Foundation Hospital in downtown Los Angeles broke ground in late 1951, and drew institutional resources away from the Harbor City facility.
Things came to a head when 5,000 cannery workers in the San Pedro area signed up with the Permanente plan at the end of 1953. The workers’ employers had wanted them to sign up with the California Physicians’ Service, a competing prepaid plan offered through the California Medical Association. This was during the period where the medical establishment disapproved of Permanente physicians, who were barred from facilities such as San Pedro Community Hospital. The ILWU had been waiting more than two years for their promised hospital, and were getting cranky.
1953 was also the year the scrappy Permanente clinic in Pittsburg, Calif., opened to serve the labor unions and local community.
By early 1955 a site had been purchased, a complex deal involving three parcels, each held by different owners. Clarence Mayhew, the most prominent architect of Kaiser Foundation hospitals, drew up plans for a bold and innovative 66-bed hospital. It featured “vast amounts of glass,” separate corridors for staff and the public, and the famous “baby-in-a-drawer.” The groundbreaking ceremony November 4, 1955, included elected officials, leaders of the ILWU, and the PMA.
On January 14, 1957, the Kaiser Foundation Hospital in Harbor City at 1100 West Pacific Coast Highway, opened. It was hectic. At a 30-year celebration, Medical Administrator Pat Crowe reminisced “The day before we opened, carpenters were still making last-minute changes and final clean-up was not yet complete. Eighteen patients were admitted that afternoon and evening.” One of them was about to deliver her second child. At 1:54 a.m. on January 15 she gave birth to a healthy baby girl.
The ILWU Dispatcher newspaper of February 15 added this under “Local 13 Man Launches New Harbor Hospital”: First patient in the new $1,000,000 Kaiser Foundation Harbor Hospital was ILWU Local 13 member Oscar Roberts, covered through the ILWU-PMA Welfare Program.
As with all the Permanente facilities, demand always pushed capacity. Sixteen beds were added in late 1958, and a two-story clinic at 1050 West Pacific Coast Highway was built in 1959. Additional expansion happened in 1964, bringing bed capacity up to 121. 1969 saw further clinic expansion. A serious fire destroyed a section of the adjacent Parkview Medical Office Building in 1973.
Harry Shragg, MD, served at Harbor City from 1957 until 1968 as a surgeon, chief of the Department of Surgery, administrator of a community health care program for indigents, and medical director. In his oral history he recounted an epiphanic moment about Permanente medicine:
I was on call in the hospital one evening, and a black girl from Compton ─ which is a lower socio-economic level area ─ came into the emergency room with abdominal pain. I think she was sixteen years old. And she was seen by a board-certified pediatrician, examined by a board-certified gynecologist, and examined by me, a board-certified surgeon. We took her to the operating room ─ she had appendicitis ─ and we operated on her. And the whole sequence of that one episode, to my mind, crystalized the merits, and the value, and the philosophy of this kind of practice, where the issue of whether one could afford it or not never arose… She was just a sick person who came in and needed help, and we just gave her what I thought was outstanding quality care… That was, to me, a very dramatic and very memorable occurrence, and I think that’s what it’s all about.
Service to working communities. Yes, that’s what it’s all about.
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, Heritage writer
Part 2 of 2: The Permanente Health Plan responds to legal charges by the medical establishment and the similar experiences of Group Health (originally called Group Health Cooperative of Puget Sound) in Washington state. In 2017, Kaiser Permanente acquired Group Health, making Kaiser Permanente Washington our newest region, the first in over 30 years.
During the late 1940s the medical establishment tried mightily to eliminate health plans that it saw as competition. As we saw in part 1 of this article, two of the biggest targets were the Permanente Health Plan (Kaiser Permanente) and Group Health.
Henry J. Kaiser takes the high road
During these challenges with the medical establishment, Henry J. Kaiser consistently took the high road. When he spoke to a group of physicians in San Francisco on June 9, 1948, he let them know he was “… astounded and horrified to be informed by our attorneys that a group of Alameda County doctors have declared war on the Permanente health program.” He outlined his many legal options, but then offered a more cooperative path because “… we must be sobered at thinking what an all-out fight on the issue of more medical care for more people could mean.” He sought an amicable solution:
I want to believe that tonight is the beginning of a real conscientious effort on the part of everyone here to strive to fulfill the common objectives not only for group medicine, if it be lower in cost, but for that type of medicine which so many want, called private medicine, although it is higher in cost … until the earning power of the nation is greater, all the people cannot participate in private medicine.
His appeal to civility fell on deaf ears. Rather than accept the olive branch, fee-for-service practitioners rolled up their sleeves to knock out the competition.
A legendary event etched into Kaiser Permanente history was the 1953 competition for plan sign-up by 4,000 United Steel Workers of America members in Pittsburg, Calif. Local private practice physicians mounted an all-out campaign, which included provocative leaflets, newspaper ads, billboards, and even a sound truck. On September 3, 1953, the union members voted overwhelmingly for the Kaiser Foundation Health Plan.
That December, delegates at the annual California Medical Association meeting tried the carrot rather than the stick approach by announcing a pilot prepaid plan to compete with Kaiser Foundation Health Plan. They offered the 9,000 members of the International Association of Machinists at Santa Monica’s Douglas Aircraft plant “free choice of physician and hospital to its subscribers” through the California Physician’s Service. The CMA had established the CPS in 1939 as statewide prepaid medical care organization.
The proposed plan would cover hospitalization and surgical care for all workers earning below a certain salary threshold, charging more for those earning above it. (Newspaper coverage noted that the Kaiser plan had no income ceiling provision.)
Private practice physicians were on the ropes. Dr. Francis Rochex of San Francisco was quoted as saying “Organized medicine has lacked vision in anticipating the extent of penetration of political and socialized pressure groups.” But measures to develop a comprehensive alternative stumbled; CMA delegates were unable to agree on a plan which would cover both prepaid medical care and still observe “the doctors’ traditional independence and maintain professional standards.”
By 1960 the “Long Beach Physicians Health Plan” through CPS had been adopted for all Douglas aircraft workers throughout the world, and Long Beach city employees and school district employees came under the plan in 1959. On its own terms it was successful; the Long Beach Independent bragged that it was “the only plan that has had wide acceptance by so large a number of the people who are seeking a workable medical insurance plan under the free enterprise system.”
The experiences of Group Health
A letter to editor in the Port Angeles Evening News April 16, 1965, presented the story from a proud member’s perspective:
As a member of the Group Health Cooperative of Puget Sound during the Forties, I well remember the efforts of the AMA to put Group Health out of business. Methods used included, denial of membership in local medical societies to Group Health doctors, denial of hospital privileges to Group Health doctors and their patients, and plenty of good old fashioned slander. Needless to say, as a true cooperative, the services of Group Health physicians were not being ‘sold at a substantial profit by a third party.’ Convicted of criminal conspiracy under the antitrust laws, the AMA fought the case to the U. S. Supreme Court — and lost.
The landmark legal decision in this fight was Washington Supreme Court case of Group Health Cooperative of Puget Sound et al., Appellants, v. King County Medical Society et al., November 15, 1951. Group Health fought back after it experienced “unfair and illegal fetters placed upon its service and growth.” In November 1949, it brought this suit asking for an injunction and damages.
An Associated Press news item in the Walla Walla (Washington) Union-Bulletin, November 16, 1951, “Court Ruling Hailed”:
Group Health Cooperative of Puget Sound Friday hailed as a “victory for free enterprise” a state Supreme Court ruling that King County Medical society policies toward the co-op violated the anti-monopoly law.
The Washington Supreme Court ordered the King County Medical Society to stop boycotting Group Health Cooperative. Organized medicine was indicted for violating the Sherman Antitrust Act in its efforts to suppress Group Health. Eventually, both plans established a more collegial relationship with their private practice peers. One of the founding Permanente physicians, Dr. Cecil Cutting, explained:
… the American Medical Association set up a committee to study provision of medicine in the country. They came out and examined us and gave a report that we were providing as good or better medical care as in the community. That sort of set them back a ways and now, we are fully accepted and I think in many times envied because of the practice, the coherence, the fundamentals of our group practice pre-payment that has tested the time and I think proved an excellent way of practicing medicine.
Dialogue about the “best” form of health care remains a vibrant topic of national conversation. Physicians, staff, and resources of the now-joined pioneering health care organizations Kaiser Permanente and Group Health are leading the conversation.
, Heritage writer
When Hollywood descended on the sprawling, bustling Kaiser Richmond shipyards during World War II it was sure to cause a buzz. Beside the standard patriotic Home Front promotion films of shipbuilding, such as the classic documentary “We Build Tankers,” the entertainment industry also tapped into the natural energy of the yards for two major motion pictures.
The first was “Man from Frisco.” It was based on the script “Man from Brooklyn,” written by George Carleton Brown and directed by Robert Florey (1900-1979). Brown would later write screenplays for the 1960s TV comedy series McHale’s Navy.
The second major wartime film shot in the Kaiser shipyards was “Since You Went Away,” released June 1944. It was written and directed by David O. Selznick and starred Jennifer Jones, Claudette Colbert, Joseph Cotton, Shirley Temple, and Lionel Barrymore.
“Man from Frisco” was a fictional story based on the iconic industrialist Henry J. Kaiser, named Matt Braddock in the film and played by actor Michael O’Shea. Other leading roles were played by Gene Lockhart, Dan Duryea, and Anne Shirley.
The plot involved upstart Kaiser and his innovative shipbuilding practices locking horns with a veteran local competitor. The first clues of the film surfaced December 7, 1942, when Republic Studios announced their most ambitious motion picture, initially titled “Victory Fleet.” News accounts noted that “It is with ships, and more ships, that Uncle Sam will avenge the Japanese sneak on our fleet at Pearl Harbor. Certainly, no man stands out in our defense effort more colorfully than Kaiser, who believes in getting ships out first and talking about it later.”
Alas, the film did not do well with many critics. The New York Times reviewer Bosley Crowther sniffed “…Some of the shipyard scenes are vibrant, and the documentation of building is good. But you can’t expect much from a picture that is so obviously propped up on clichés.” The Hollywood Reporter reviewer termed the picture “disappointing” due to its “melodramatic Hollywood treatment,” despite it containing “numerous absorbing shots of the great shipyards at Richmond, Calif., and along the line a fund of extremely interesting information is given concerning the high-speed operation and how they evolved.”
Some reviews were more positive, focusing on the patriotic message of home front workers:
There are thousands of “extras” in Republic’s dramatic new picture who receive no screen credit. These “extras” are the Americans who are employees of a shipyard in Richmond, where much of the background material for the screen plays was filmed. Those men and women are the people about whom the story is concerned. Working twenty-four hours each day, they keep American ships sliding down the ways to the sea to take food, men, and equipment to the battlefronts of the war.
Filming in the Richmond shipyards (and nearby Point Richmond) caused quite a buzz. The weekly Kaiser shipyard newspaper Fore ‘n’ Aft wrote about it November 19, 1943, with photos [above, right]:
Republic’s Director Robert Florey points the camera at a bit of Yard One. The film -“Man from Frisco” – is about the guy who brings prefabrication to shipbuilding. Naturally, you’ll want to see it. Paramount gets Yard One’s main drag and home-bound workers. So, you’re in pictures!
When it opened May 18, 1944, in Oakland, Richmond, and San Francisco, Fore ‘n’ Aft carried this commentary:
If this is the way we look to Hollywood – and it apparently is, since Stephanie Bachelor ploys a woman shipbuilder in Republic Pictures’ “Man from Frisco” – then all we can say is, “Gosh!” Background shots for this movie of the life and loves of a shipbuilding executive were obtained in our own yards. That dazed look in Stephanie’s eyes is the result of not wearing flash goggles.
“Man from Frisco” got a rousing revival in the summer of 2010 when it was shown at the recently refurbished S.S. Red Oak Victory ship at Kaiser Richmond shipyard #3 with historical context provided by Kaiser Permanente Heritage Resources consultant Steve Gilford.
In ”Since You Went Away,” the shipyards were merely a backdrop to the poignant home front story about a housewife who struggles to care for their two daughters and a pair of lodgers while her husband is off in the war. NYT’s critic Crowther bemoaned its almost 3-hour length and thin plot. But at the 1945 Oscars it won Best Music, Scoring of a Dramatic or Comedy Picture.
Again, Hollywood stars in the shipyards were a welcome bonus during the grueling frenzy of war production. Fore ‘n’ Aft, September 8, 1944, published a photo [right] with the caption:
Wearing a becoming backdrop of 5,000 Yard Three workers, movie star Jennifer Jones visited Richmond last week. Inset, Anita Colby of Selznick Studios, who caused the Big Wind of 1944 hereabouts when she appeared with Jennifer. You know, whistles.
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