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Read Making a Killing

home / healthcare / in the media

Modern Healthcare
Jan 27, 2003

by Laura B. Benko

A look inside; Settlement requires Kaiser Permanente to publish info on doc's decisionmaking

In what some healthcare experts are calling a landmark legal settlement, Kaiser Permanente has agreed to publish on its Web site detailed information on how its physicians make decisions about patient care.

Oakland, Calif.-based Kaiser will become one of the first health plans to publicly disclose the clinical guidelines its doctors use to treat a host of ailments, as well as information on how it compensates physicians, including any financial incentives it pays doctors to limit treatment costs. The deal, announced last week, ends a three-year legal battle in which consumer advocates had accused the nation's largest not-for-profit HMO of deceiving the public into thinking all medical decisions were being made by its doctors, free from corporate oversight.

''This is a really important step for public disclosure that every other HMO in the nation should follow,'' said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights, Santa Monica, Calif.

The information will help patients better understand the rationale behind their care and give them tools to make sure they get what they need, Court said.

No timeline has been set for releasing the data on the company's Web site, kaiserpermanente.org.

But how Kaiser's new disclosure policy will affect doctors-and whether other health plans will follow suit-remains to be seen. Peter Warren, spokesman for the California Medical Association, said he had not heard of the settlement and could not comment on it. The California Association of Health Plans also had no comment.

In 1999, the foundation led a coalition of California consumer groups in a lawsuit claiming Kaiser's $60 million-a-year advertising campaign with the slogan ''In the hands of doctors'' lured nearly a half-million new members with the false promise that only physicians, not administrators, would make decisions about patient care.

The lawsuit alleged that Kaiser interfered with doctors' medical judgment by paying them bonuses to limit services and urging them to adhere to strict treatment and length-of-stay guidelines authored by Seattle-based actuarial firm Milliman & Robertson, among other things. Kaiser officials had contended the lawsuit was ''completely groundless and false.''

Kaiser spokeswoman Beverly Hayon declined to say whether the HMO admitted any wrongdoing or paid monetary compensation, adding that both parties were restricted in what they could say about the settlement. But in a written statement, Kaiser Senior Vice President Bernard Tyson said, ''It is particularly gratifying to turn conflict into a productive collaboration with these important consumer groups.''

This is Kaiser's third large legal settlement since George Halvorson became chief executive officer in May 2002. Kaiser agreed in September to donate $1 million to Duke University for research on Sanfilippo syndrome after the HMO refused to cover the treatment of two boys suffering from the rare genetic disorder. In November, it paid a $1 million fine to California regulators, ending a protracted dispute over the care of a 74-year-old patient who died of a ruptured aneurysm at Kaiser Foundation Hospital, Hayward, in 1996.

As part of the latest settlement, Kaiser also agreed to expand efforts to let patients choose a personal doctor, continue physician recruitment and take part in a statewide study of hospitals' emergency services.

In addition, the HMO ''reaffirmed'' that its call-center representatives will not receive financial incentives to limit or deny access to care. Kaiser came under fire last year for a pilot program it conducted from January 2000 through December 2001 in which it paid bonuses to call-center operators who spent the least amount of time on the phone with each patient and limited the number of doctors' appointments.

"In the bigger picture, there are lots of things that need to be done,'' Court said. ''But this is important because Kaiser is showing some responsiveness to community concerns.''


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