, Heritage writer
Jack Chapman was hired in 1951 by Kaiser Permanente physician founder Sidney Garfield to be the assistant administrator of Oakland Hospital. Chapman personally supervised the construction of our Walnut Creek Hospital for Henry J. Kaiser and became the hospital’s first administrator. He was also a keeper of Kaiser Permanente’s heritage and a master teller of corporate folklore to generations of employees.
When Jack left this earth in 1999 a Kaiser Permanente obituary called him “a legend in his own time.” This is one of his stories captured in an interview, about the brand-new Walnut Creek Hospital that opened September 15, 1953 and the open house held August 23-30.
“Sunday morning, it was about 5 o’clock in the morning and the phone rings.” Jack!” “Yes, Mr. Kaiser.” He’d call you all times, time did not mean anything to him. “We’re having a meeting at 8 o’clock down at the Clinic.” “Okay, yes, right, you bet, Mr. Kaiser.” “I want you to be there.”
So, Wally Cook, Fred Pellegrin and myself, yeah, that was just the three of us. Well, we got there. Sidney is there, Ale Kaiser [Henry J. Kaiser’s second wife Alyce, whom he married in 1951] and Helen [Helen Chester Peterson, Dr. Garfield’s second wife, whom he’d married less than three months earlier].
“Jack, what’s this filing system you have concocted here?” I said, “It’s called the terminal digit system. Filed by the rear numbers. We have been filing by numbers, Mr. Kaiser, in sequence. But, God, if you misfile, how do you find the thing. This way, you always have the last two numbers and misfiling is very rare. Some people will invert them, a 90 can become a 09 or sometimes people will put them upside down like 06 or 09 but at least you can go to those bins and, you know have a pretty good chance of finding the record.”
I said, “Well, I don’t think that is any good at all.”
Ale then says, “We don’t want to treat our members as numbers.”
I tried to argue, you know, and I got about from here to the end of that desk and that was the end of it. “It is going to alphabetical.” “Alphabetical, oh God,” I said.“And, we are going to have a color code.” “You mean, different colors for the different letters of the alphabet.” “Yeah.” “Fine” I said. So here we are, we pull all the charts out and here’s the A’s and Mr. Kaiser is putting the A’s, and the B’s, C’s. Finally, with charts on the floor on a Sunday morning, I said, “Jeez, I wonder if they have enough colors to cover the alphabet.” “We’ll have them make ‘em up.” So sure enough, I don’t know what those chart jackets cost, it must have been ungodly to have these all made up. You know, we had puce, purple and all different colors, my God! Lime green, you know, it looked like Jell-O up there.
“But anyway, we had color codes and then you had to understand what each color meant, that that was an A color and a B color and a D color or whatever. I can recall that incident so well, oh my goodness gracious. Well, it was kind of funny. Finally, the hospital was really going along and we were getting ready to open … we got the whole thing dolled up. We had an open house here like you’ve never seen in your life. We went on for two weeks, every night. 35,000 people marched through this hospital.”
Short link to this article: http://k-p.li/2bjsVuo
, Heritage writer
If you are interested in learning more about the history of Kaiser Permanente, the books listed here are all good resources. With the exception of The Story of Dr. Sidney R. Garfield and Permanente in the Northwest, these books are out of print, but copies can often been located through libraries and mainstream used booksellers, such as AbeBooks , Alibris , Barnes and Noble , Half Price Books or Powell’s Books .
The Story of Dr. Sidney R. Garfield:
The Visionary Who Turned Sick Care Into Health Care
Tom Debley with Jon Stewart
The first biography of Dr. Garfield tells the story of his long and eventful career, during which he turned his 1930s Mojave Desert industrial health care dream into a thriving and enduring reality that continues to offer a practical model for the future of American health care.
The Permanente Press, 2009, 148 pages
Available from The Permanente Press
This book fills a large gap in the history of Kaiser Permanente – the unique contribution made by the Northwest region, especially in the early years. The author, retired Northwest internist Ian C. MacMillan, demonstrates an insider’s insight and enviable access to details that thoroughly enrich this account.
The Permanente Press, 2010, 313 pages
Available from The Permanente Press
A good overview of the World War II Home Front experience in the Kaiser Richmond shipyards. The book is written for the general reader and includes many personal anecdotes about Home Front life.
Richmond Museum of History, 252 pages, 2011
Out of Print
A Model for National Health Care: The History of Kaiser Permanente
This extensively researched book is the definitive academic history of Kaiser Permanente that tells the story of its growth and impact on American health care.
Rutgers University Press, 1993, 265 pages
Embattled Dreams: California in War and Peace, 1940-1950
Part of an extensive history of California series, this book includes discussion of Henry J. Kaiser, his wartime industrial efforts, and the founding of Kaiser Permanente.
Oxford University Press, 2002, 386 pages
Henry J. Kaiser: Builder in the Modern American West
In this academic biography, historian Foster offers the definitive balanced view of Kaiser, covering his mistakes as well as his colossal strengths and successes.
University of Texas Press, 1991, 358 pages
Henry Kaiser, Western Colossus
This very readable biography is by a former Kaiser Steel executive who was an eyewitness to much of Henry Kaiser’s career.
Halo Books, 1991, 434 pages
Kaiser Wakes the Doctors
Paul De Kruif
This book by America’s foremost medical writer of the era was the first ever written about the revolutionary medical care available in the Kaiser World War II shipyards.
Harcourt, Brace & Company, 1943, 158 pages
Kaiser Permanente Health Plan: Why It Works
The author was commissioned to investigate Kaiser Permanente to assess “what it is, how it works, and whether it is good or bad.”
Henry J. Kaiser Family Foundation, 1971, 92 pages
Can Physicians Control the Quality and Costs of Health Care?
The Story of The Permanente Medical Group
John G. Smillie, MD
Dr. Smillie, an early Northern California Permanente physician, offers an insider’s view of the beginnings of the Kaiser Permanente medical care program.
McGraw Hill, 1991, 283 pages
The Kaiser Story
When Henry J. Kaiser passed away in 1967, Kaiser Industries published this short book as a tribute to the company’s founder.
Kaiser Industries, 1968, 72 pages
Life Among the Doctors
Paul de Kruif
A collection of essays on people the author regarded as pioneers in medicine, including: Sidney Garfield, MD, in a section titled “The Last Maverick;” Edna Schrick, MD, whom de Kruif quotes as suggesting to Dr. Garfield that “we learn how to teach the well to take care of themselves…to keep away from doctors”; and Herman Kabat, MD, who founded the Kabat-Kaiser Institute, now the Kaiser Foundation Rehabilitation Center in Vallejo.
Harcourt, Brace & Company, 1949, 470 pages
Mr. Kaiser Goes to Washington: The Rise of a Government Entrepreneur
Stephen B. Adams
Historian Adams offers Kaiser’s story as a case study of “government entrepreneurship.” He explores the symbiotic relations forged by Kaiser and President Franklin D. Roosevelt.
The University of North Carolina Press, 1997, 239 pages
The Rich Neighbor Policy: Rockefeller and Kaiser in Brazil
Elizabeth A. Cobbs
Cobbs details how Henry Kaiser’s participation in the Brazilian auto industry impacted U.S. foreign relations and how postwar businessmen sought accommodation with Latin American nationalism by evolving a code of ‘corporate social responsibility.’
Yale University Press, 1992, 273 pages
Historical Review of the Southern California Permanente Medical Group:
Its Role in the Development of the Kaiser Permanente Medical Care Program in Southern California
Raymond M. Kay, MD
A history of the SCPMG written by Dr. Raymond Kay, who was Dr. Sidney Garfield’s close friend, a pioneer of the Permanente Medical Groups, and the founder of the Southern California Permanente Medical Group.
SCPMG, 1979, 174 pages
An excellent overview of the issues confronting national health care at the end of the 1970s.
Addison-Wesley, 1980, 196 pages
The Johns Hopkins University Press, 1994, 170 pages
Kaiser Permanente: A Short History
Gerry Gaintner, EdD, was a Kaiser Permanente employee for 15 years, all in the Information Technology department. He wrote this concise history in 2010, and upon his retirement, gifted it to KP Heritage Resources.
Unpublished, 2011, 42 pages
Available for download (pdf)
Last updated 11/1/2018
, Heritage writer
Second in a two-part series
Atomedic hospital visionary Dr. Hugh C. MacGuire pitched his proposal hard to Kaiser Permanente’s founding physician Dr. Sidney Garfield. In a letter dated November 25, 1960, he wrote:
You are already in command of a large, well defined medical care program with the backing of one of the most progressive imaginative and creative organizations of our time at your disposal. If we could set up and develop our Atomedic concept within the confines of Kaiser and call on the talent already available there we could have our units covering the globe within a year.
Dr. Garfield then proceeded to educate himself about the medical applications of atomic radiation.
He wrote to Marshall Brucer, M.D., chairman of the Medical Division at the Oak Ridge Institute of Nuclear Studies in Tennessee. In a reply dated December 8, 1960, Dr. Brucer conceded: “Problems of medical sterilization are not as simple as they might appear.” However, he went on to suggest that Dr. Garfield might be asking too small a question:
…All of these problems are minute if you consider that the radiation-producing devices can also be used for every other thing in a hospital. I have suggested to one of the reactor producers that if the hospital were built around a core of reactors, then all of these problems of heat, light, sterilization, and everything else that is necessary in a hospital can be done at remarkably cheap cost.
Dr. Garfield requested a copy of Proceedings of the International Conference on the Peaceful Uses of Atomic Energy, held in Geneva 8 August to 10 August, 1955, Volume 15, Applications of Radioactive Isotopes and Fission Products in Research and Industry, which was purchased for him at the United Nations Bookstore in New York City by Charles E. Foster from Kaiser’s Washington, D.C., office.
However, by February, 1961 Dr. Garfield’s enthusiasm for an atomic hospital began to decay.
He wrote to Dr. MacGuire informing him “…the current recession in business makes it practically impossible to stir up any real interest in your new venture with the Kaiser organization at this time.”
There is no further evidence that Dr. Garfield, or Kaiser Permanente, continued to participate in the Atomedic project after this date.
It’s not clear when the Atomedic hospital design lost its nuclear reactor feature and branding; by 1963 there was no mention of it in their literature or in news accounts. Instead, the title was described as referring to its “application of atomic age principles to medicine.”
In 1963 a first prototype hospital – without a nuclear reactor – was built in Montgomery, Ala.; it was later dismantled, transported, and re-erected in Woodstock, Ga., where it operated for more than 20 years. A second prototype was the official hospital of the 1964 World’s Fair in New York.
In their hospital design title Healthcare Architecture in an Era of Radical Transformation by hospital design scholars Stephen Verderber and David J. Fine, the authors noted several serious hurdles for the Atomedic hospital:
First, it was expensive. In 1965, the cost was about $19,000 per bed, and the figure was higher in extreme climates or where local fire codes required automated smoke detectors, sprinkler systems, smoke barriers, or fire-rated doors. Finally, the hospital did not meet Hill-Burton eligibility standards for federal construction funding.
The Atomedic Foundation continues to this day; its motto is “Focused on health through standardization of processes and systems.”
And Kaiser Permanente continues to this day to explore innovative hospital designs and develop alternative energy sources, such as solar and wind.
Material for this story culled from The Permanente Medical Group archives.
Short link to this article: http://bit.ly/1EMqqKi
, Heritage writer
Kaiser Permanente announced on February 18, 2015 that it had joined the ranks of the nation’s top renewable energy users, having completed several agreements to purchase enough renewable energy to reduce its greenhouse gas emissions by 30 percent nationwide by the beginning of 2017 — three years ahead of schedule.
Part one of two part series
That’s great news. But in the early 1960s, “renewable energy” was not much of a priority, and the industrial juggernaut that propelled the country after the end of World War II was fixated on the alternative power source of the period – atomic energy. The U.S. government and many industries sought ways to exploit the miracle of fission, and hospitals were enticed by this everlasting power.
This issue would attract two parts of Henry J. Kaiser’s far-flung organization – the Kaiser Foundation Health Plan and Hospitals (as cutting-edge users of this technology) and Kaiser Aluminum, since several of the proposals sought to use the new geodesic domes as shells.
One of the primary proponents of combining atomic power and health care was Canadian-born Hugh C. MacGuire, M.D., of the Atomedic Research Center. He was described in news accounts as being a leading pediatric surgeon, and developed the “Atomedic” concept in 1953 with the noble purpose of making health care accessible and affordable.
His prototype aluminum hospital was designed to serve about 90 percent of the average community’s hospital and clinical needs, with the remaining 10 percent of highly critical or specialized cases referred to major medical centers. Atomedic’s lightweight metal construction would make possible an airlift of the entire 22- to 44-bed structure to any site in the world in a matter of hours. After assembly and use, the building could be disassembled and moved to a new location with relative ease, including the self-contained nuclear power plant.
An earlier “Atom Era” hospital such as the proposed new medical center for U.C. Los Angeles in 1949 was also futuristic, but did not include an atomic pile in the basement. There was a plan for an “atomic hospital” to be built that same year at the Brookhaven National Laboratory on Long Island, NY, the first postwar atomic pile in the U.S.; news stories noted “It is impossible to move an atomic energy pile to a hospital, so the Brookhaven scientists plan to do the next best thing: bring the patients to the pile.” In 1967 CBS television’s Walter Cronkite aired a story on the nuclear medicine practiced there.
The Atomedic’s architectural details were handled by Atlanta’s Michael Hack Associates. This was a fresh and complex design challenge – a lightweight, strong, and versatile self-contained modern hospital. The nuclear reactor should be “designed so that they may be parachuted into inaccessible areas.” Electronic patient monitoring would utilize state-of-the-art sensors, data processing, and communications systems. The facility would rest on a hollow pontoon foundation that could be filled with air (for floating on water), potable water, or earth.
Atomedic held two earlier “conceptual” symposia in 1958 and 1959, but it was in 1960 that the project began to take off.
On January 17, 1960, This Week magazine (a nationally syndicated supplement in Sunday newspapers between 1935 and 1969) ran a three-page article extolling the virtues of “The Hospital of Tomorrow.” It was endorsed by Lewis M. Orr, president of the American Medical Association, who gushed:
The proposed Atomedic Hospital is an exciting and dramatic concept which has far-reaching implications for the future practice of medicine. The project is geared to the coming space age and geared, also, to the prime objective of medicine – supplying the highest quality medical care at the lowest practical cost.
The article boasted of cost savings resulting from eliminating staff and streamlining processes. Atomedic would have no laundry (“The Atomedic Hospital will use disposable cellulose-fiber ‘linens’ and disposable eating utensils”) and reduced kitchen staff, replaced by “wall cookers” for frozen food prepared elsewhere. Sanitary? You bet. “The hospital will be kept germ-free with ultra-violet light or a small cobalt-60 radioactive unit, which will sterilize the air and instruments. One graphic was captioned: “Nurse puts instruments on belt which takes them past radiation unit.”
Kaiser Permanente founding physician Dr. Sidney Garfield attended a conference on Atomedics in Montgomery, Alabama, on Nov. 15-16, 1960. Dr. Garfield’s title at the time was “Vice President in Charge of Construction, Kaiser Foundation Hospitals.” Also present was Mr. J.R. Shaw, from Kaiser Aluminum’s Atlanta office.
Dr. Garfield was interviewed in the local newspaper, which led with his endorsement for Atomedic: “A pioneer in non-conventional hospital construction Wednesday termed Dr. Hugh C. MacGuire’s proposed Atomedic Research Center a ‘magnificent idea.’ “
Dr. Garfield was in fact deeply interested in improved hospital design, and had been ever since 1933 when he began his practice in the remote Mojave Desert. Note the similarity between his 1953 circular lobby for the new Walnut Creek, Calif., hospital and that of Atomedic. Years later he humbly admitted to the New York Times magazine “Hospital design is sort of a hobby of mine.”
Soon afterwards Dr. Garfield wrote to Dr. MacGuire and told him that he would “…discuss the entire subject with the various Kaiser executives.”
Part two: Did Kaiser Permanente join in building an atomic hospital?
Material for this story culled from The Permanente Medical Group archives.
Short link to this article: http://bit.ly/1NhJpQN
, Heritage writer
Kaiser Permanente’s archives serve as a source of historical content for many uses within and outside the organization. Two examples of “heritage on display” in 2014 included a large history wall at the new Kaiser Permanente Oakland Medical Center and components of the permanent exhibition at the U.S. National Park Service’s Rosie the Riveter World War II Home Front National Historical Park in Richmond, Calif.
Two recent projects at Kaiser Permanente facilities are the latest to draw upon the rich materials in our archive to tell compelling stories.
The Garfield Innovation Center in San Leandro, Calif., which opened in 2006, connects groups who want to work collaboratively to develop technologies and facilities. The center contains 37,000 square feet of simulated care delivery environments and prototyping space designed to test and innovate clinical workflows, architectural designs, technology, interoperability, and products. Among its features are a mocked-up inpatient unit as well as an outpatient clinic and a home environment. The Center is not open to the public, but does offer limited opportunities for tours. Readers might enjoy seeing the Garfield Center’s virtual tour.
Recent remodeling at the center included various nods to Kaiser Permanente history, including photographs of founding physician Dr. Sidney R. Garfield and digital signage showing medical innovations over our 70+ years of health care practice.
Kaiser Permanente’s administrative headquarters in Portland, Ore., recently installed a stunning display of ten suspended 36” square Plexiglas panels with local history images and text that share the role of medical care in the World War II Kaiser shipyards and the postwar evolution of the health plan. The panels can be individually replaced over time to offer a more complete history.
Short link to this article: http://ow.ly/Hl9e1
, Heritage writer
It’s not every day a first lady visits a Kaiser facility, but it happened in the middle of World War II – and she visited two.
Eleanor Roosevelt came to the Kaiser Company shipyard on the Columbia River in Vancouver, Washington to personally launch the U.S.S. Casablanca, the first in a new class of small, versatile and inexpensive aircraft carriers.
The class was named for the Battle of Casablanca, fought November 8-12, 1942, where the U.S. Navy fought vessels under the control of Nazi-occupied France. The 50 ships the Kaiser yards produced comprised almost a third of the American carriers built during the war and were launched in less than two years.
The ship was known as the Alazon Bay while under construction and renamed the U.S.S. Casablanca two days before she slid down the ways on April 5, 1943. Five of the “baby flattops” were sunk in action during the war, and none survive today.
Health care, not warfare
But Eleanor wasn’t just there for the latest in military technology. She was more interested in the social programs affiliated with the massive shipbuilding projects, including child care, prepared meals for double-duty women, and health care.
Henry J. Kaiser listened to her and responded by introducing two controversial (at the time) programs for shipyard workers – model child care facilities near two of the shipyards and pre-cooked meals for working moms.
As for health care, Mr. Kaiser needed no convincing. Mrs. Roosevelt was given a grand tour of the state-of-the-art Northern Permanente Foundation Hospital built in September, 1942 for the shipyard workers.
Eleanor wrote a regular newspaper column, “My Day.” Her April 7, 1943, entry included this reflection on the Portland visit:
A little after 9:00 o’clock Monday morning we were met in Portland, Ore., by Mr. Henry J. Kaiser and his son Mr. Edgar Kaiser. A group of young Democrats presented me with a lovely bunch of red roses at the airport and then we were whisked off for a busy day.
Our first tour was in the Kaiser shipyard itself. It is certainly busy and businesslike. Everything seems to be in place and moving as quickly as possible along a regular line of production. I was particularly interested in the housing, so I was shown the dormitories and then the hospital, which is run on a species of health cooperative basis costing the employees seven cents a day. It looked to me very well-equipped and much used, but I was told there were few accidents in the shipyards owing to safety devices. The men come in for medical care and some surgery and their families are also cared for…
The ship went safely down the ways at the appointed time and was duly christened. It was interesting and impressive to see all the workers and their families gathered together for the occasion and I felt there was a spirit of good workmanship in this yard.
Mrs. Roosevelt was so intrigued with the new medical care program that she wrote Permanente’s founding physician, Dr. Sidney R. Garfield, who happened to be away at the time of her visit. “What is your plan for preventive care?” she asked.
“This is the solution of medical care for the majority of people in this country”
Dr. Sidney Garfield replied in a letter May 25, 1943, in which he took the opportunity to explain how aligned the first lady’s vision was with that of the Permanente Health Plan:
I regret very much not to have been present during your recent visit to Vancouver, Washington, and not to have had the opportunity of showing you through our medical facilities and hospitals in the Oakland-Richmond, California area.
Your expression of interest in preventive medicine is rather closely allied with our thoughts for medical care. Mr.Kaiser and I believe that preventive medicine is more important than the curative side. Our medical programs have always been developed with this fact in mind…
Because of the economy of such a medical plan the cost of medical care to the people is lowered. For the small amount charged at Coulee Dam we were able to provide the best of medical care and pay for the hospital facilities provided in a period of four years. When the cost ofthe facilities is paid for the charge per week to the people can be reduced, or the money used to provide more facilities, added equipment, and for research. Mr. Kaiser and all of us who have had a part in these programs feel that this is the solution of medical care for the majority of people in this country. It is self-sustaining and unites the medical profession, the employer and employee all in one common objective – “to keep the people well and to prevent their illness.”
Your interest in our organization is greatly appreciated. If we can be of further service in answering your questions please do not hesitate to call on us.
Sidney R. Garfield, M.D.
Medical Director, Kaiser Co., Inc., West Coast Shipyards
Years later, Eleanor Roosevelt’s light would shine on KP again.
In 2007 Kaiser Permanente was one of three recipients of the Eleanor Roosevelt Human Rights Award from American Rights at Work, an advocacy and public policy organization responsible for promoting and defending workers’ rights since 2003. Kaiser Permanente received the award for “creating a management-union partnership based on mutual trust and respect.”
Short link to this article: http://bit.ly/1r3YZUW
, Heritage writer
Part one of a two-part series
Unless one has the unfortunate experience of being injured on the job, one is usually unaware of a parallel health care system – the medical treatment provided as a benefit through the Workers’ Compensation Insurance system.
Regular health issues (diseases or injuries suffered while not at work) are handled through fee-for-service doctors or their insurance/health plan counterparts. But if something bad happens on the job, another set of rules apply. Employers are legally required to provide benefits to employees, including medical coverage, and treatment for these injuries is carried out by a separate system of insurance or self-insurance. Care is usually delivered by physicians specializing in Occupational Medicine.
Early in the 20th century industrial injuries were rising, organized labor was becoming more powerful, and legislation was sought to mitigate the medical and legal consequences of on-the-job accidents. California’s first workers’ compensation law was the voluntary Compensation Act in 1911, followed by the Workers’ Compensation, Insurance and Safety Act of 1913 (the Boynton Act). For the first time, employers were required to provide benefits for all employees injured on the job. The employers benefited from expanded limitations on their legal liability. The Act also established a competitive state insurance fund, and it remains the foundation for workers’ compensation in California today.
Dr. Sidney Garfield’s desert experience
When Kaiser Permanente founding physician Dr. Sidney Garfield (along with partner Dr. Gene Morris) first set up his 12-bed Contractors General Hospital way out in the Mojave Desert in 1933, he wasn’t trying to revolutionize health care practice in America. He was simply a young doctor taking on a reasonably safe business opportunity, serving the medical needs of some of the 5,000 men working on the Colorado River Aqueduct Project who were insured through workers’ compensation.
Dr. Garfield soon found his practice foundering because the workers’ compensation insurance companies handling industrial injuries were sending the most serious – and most profitable – cases to favored Los Angeles hospitals. They also challenged many charges as unnecessary and were often late in paying. In addition, the remote setting of the work camps meant that these hospitals were the only place the workers could be treated for non-industrial diseases – something for which they could rarely afford to pay full fee.
Industrial Indemnity Exchange (which was one-third owned by Henry J. Kaiser) was the largest insurance company affiliated with the aqueduct project, and underwriter Harold Hatch offered a creative and mutually beneficial solution. In exchange for half of the 25 percent insurance premium that Industrial would have paid out for treatment, Industrial would pay that up front to Garfield and he’d promise to provide the requisite industrial care.
Garfield figured out that he could get the workers to also prepay a small, affordable amount (five cents a day), and he’d extend his services to cover comprehensive medical care.[i] 60 percent of Garfield’s income would eventually come from payroll deduction, 40 percent from workers’ compensation. The plan worked very well, and became one of the cornerstones of the Kaiser Permanente model.
Caring for wartime workers
This unusual integration of industrial and non-industrial medical care under one roof continued when Garfield directly partnered with Kaiser and operated the hospital at Grand Coulee Dam (1938-1941) and later at the seven West coast shipyards and one steel mill (Fontana) during World War II employing almost 200,000 workers.
Health care posed a significant challenge in operating the yards; because most of the able-bodied healthy men (the typical demographic for this industry) were serving in the military, those available for homefront needed job training and medical care.[ii] The option of affordable comprehensive health care was extremely attractive to the new workforce, and demand outstripped availability. Permanente Health Plan organizers struggled to add enough staff and facilities to handle new members.
Despite the superficial appearance to the end user that it was a single health plan, under the hood it still involved the bureaucracy and bookkeeping of two separate entities. The Health Plan Manual for the staff of Sidney R. Garfield, M.D., (circa 1942) clearly stated:
Q. If a member is hurt while working on the job is he covered under the Health Plan?
A. No. The Health Plan does not cover Industrial accidents. These are covered under Workman’s Compensation.
Q. What is meant by Workman’s Compensation and how are we connected with it?
A. Under the Workman’s Compensation Act of California, most employers are required to provide medical and hospital care as well as weekly compensation to employees injured while working. The shipyards contracted with private insurance companies to provide and administer these benefits to the employees. We in turn made arrangements with the insurance companies to provide the medical and hospital services for a certain fee.
The combined health plans proved to be a powerful medical and economic engine. In August of 1943, A.B. Ordway, Vice President of the Richmond Shipyards, sent a report to B.K. Ogden, Director of the Division of Insurance, United States Maritime Commission, in Washington, D.C. He observed:
The shipyard management further realized that the type of medical and hospital care necessary to secure and maintain the best morale and productive results for shipbuilding could not be made available from the possible income that could be derived from industrial cases only.
Therefore, early in 1941 a plan was devised for offering to the employees of the above yards a Medical Health Plan at a fixed price per week. The possible income that could be secured through an Industrial medical plan and a medical Health plan was of sufficient size to justify expenditures of large amounts of money for buildings and equipment and to better enable the holder of the medical contracts to secure the large staff of doctors and nurses needed to adequately provide the best medical and surgical attention possible.
…Medical costs on industrial cases are lower than would be possible were it not for the fact that one organization handles industrial and non-industrial cases, and the industrial costs are controlled through one contract method.
In terms of running a huge industrial network, the advantages of a healthy workforce were obvious and quantifiable. Henry J. Kaiser himself noted:
In 1943, the average male industrial worker lost 11.4 days and the average female industrial worker 13.3 days of work due to sickness and injury. By far the greater proportion of this loss – 80 percent in men and 90 percent in women – was believed to be due to common ailments. This means that in the U.S. today there is a loss of more than 600,000 man-days annually. This is 47 times the amount of time lost through strikes and lock-outs of all kinds during 1943.[iii]
Kaiser used the above argument – and his successful experience with running industrial medical care programs – as the basis for a bold proposal for a nationwide pre-paid medical plan as the war waned in 1945. Dr. Paul Cadman, in an addendum to the proposal, laid out the premise:
The Health Insurance Plan follows the general pattern of the Workman’s Compensation Law, a law which has been in effect for over thirty years and has been found to be practical and workable.
Alas, the proposal never went anywhere, but Henry J. Kaiser’s health plan continued to grow bigger and better.
Next: Postwar evolution of Kaiser Permanente’s worker health care
Short link to this story: http://bit.ly/QdEFCz
Special thanks to Dr. Doug Benner, Coordinator of Regional Occupational Medicine Services (1993 to 2011) and Connie Chiulli (Director of Operations, Occupational Health Service Line, Regional Occupational Health, TPMG) for help with this article.
[i] A slightly different percentage is described by Rickey Hendricks in A Model for National Health Care: “Since Garfield was losing money yet providing needed services and model facilities, Hatch proposed that Industrial Indemnity prepay Garfield 17.5 percent of premiums, or $1.50 per worker per month, to treat industrial injuries.”
[ii] “…In 1944, with the [shipbuilding] program in full swing, it was rare to find a yard of five thousand employees or more who could boast of more than 5 per cent of workers with previous experience in shipbuilding.” “Health and Safety in Contract Shipyards During the War,” by Philip Drinker, Ch.E., in Occupational Medicine, April, 1947.
[iii] “Proposal for a Nation-Wide Pre-Paid Medical Plan Based on Experience of the Permanente Foundation Hospitals” Henry J. Kaiser, March 3, 1945.
, Heritage writer
This piece is a Thanksgiving offering, a display of our deep appreciation for all the health care professionals who keep us well.
Kaiser Permanente Heritage Resources recently digitized some silent film footage of the Mason City (Washington) Hospital circa 1938. It shows doctors and nurses who were proud to serve at America’s largest Depression-era construction project, living under hardship conditions in a remote town with blistering heat and freezing cold.
This facility was the birthplace of the Kaiser Permanente health plan, where Dr. Sidney Garfield was brought up to care for the workers and families at Henry J. Kaiser’s massive Grand Coulee Dam project.
The original hospital at the site had fallen into disrepair and the unions claimed it was insufficient for their members’ health care. In 1938 Kaiser Industries won the contract to finish the dam, and Henry J. Kaiser and his son Edgar (General Manager of the project) spared no expense on a remodel. Among the many modern amenities installed was air conditioning.
In this clip Kaiser Permanente founding physician Dr. Sidney Garfield is seen exiting the recently-renovated facility to a gathering of doctors and nurses which includes Dr. Cecil Cutting (center of this frame, with a ball in his hand), Dr. Wallace Neighbor, nurse anaesthetist Geraldine “Jerry” Searcy, and RN’s Winifred Wetherill and Evie Sanger. The footage is short clip from recently digitized from Dr. Neighbor’s home movies, which also includes doctors on horseback, the local rodeo, scenes of Mason City, and dam construction.
See them thrive. Then go thrive yourself, and help build thriving communities.
Short link to this article ow.ly/rfrxU
, Heritage writer
Henry J. Kaiser was an industrialist, health plan founder…and lifesaver.
On July 3, 1951, at 69 years of age, Henry J. Kaiser sped off in a speedboat to rescue his wife Alyce “Ale” Kaiser and founding Permanente physicians Dr. Sidney Garfield and Dr. Cecil Cutting when their catamaran capsized in the frigid waters of Lake Tahoe.
Short link to this item: ow.ly/o8ROj