Kaiser winning back doctors amid increasing enrollment

The HMO's group-model system has aided its financial recovery and its ability to attract physicians.

By Leigh Page, AMNews staff. May 14, 2001.

Kaiser Foundation Health Plan's dramatic turnaround in the past few years is bringing renewed attention to the HMO's group-model system, which plan physicians say is virtually hassle-free.

The HMO's parent, nonprofit Kaiser Permanente, based in Oakland, Calif., reported net income of $584 million for 2000, after losing $500 million in 1997 and 1998. Overall revenues were $17.7 billion in 2000 and $16.8 billion in 1999 -- on a 1999 net loss of $6 million, according to Kaiser spokeswoman Laura Marshall.

Allan Baumgarten, a Minneapolis-based managed care finance and policy analyst, said the group model played a key role in turning around Kaiser, the nation's third-largest managed care company, with 8.1 million enrollees.

While many employers still want wider access to physicians and hospitals than the group model can provide, "this is a good time" for the model, Baumgarten said.

Because most of its hospitals and physicians are in-house, Kaiser has more control over utilization and costs than other health plans that contract with independent physician groups, Baumgarten said.

What's more, he said, "other health plans were once able to transfer risk to hospitals and physician groups, but they can't do that anymore."

Kaiser exited four markets nationwide in recent years, but it remains in nine states. Besides California, where it has 6.1 million enrollees, it has operations in Colorado, Hawaii and the metropolitan areas of Portland, Ore.; Washington, D.C.; Atlanta; and Cleveland. Building and expanding facilities in existing markets, Kaiser hired 68 doctors in 2000 alone, and each opening has four to five applicants, the company said. [...]