Kaiser gives its members more choices

PPO and POS plans find popularity in a growing number of states, but the HMO plan still rules for now.

By Robert Kazel, AMNews staff. June 2/9, 2003.

Kaiser Permanente, finding that outside California its traditional closed-panel, group-model approach to managed care is sometimes closing doors to higher membership, is offering an array of PPO and POS products that give patients the option of going outside the Kaiser fold for treatment.

Kaiser's best-known mechanism for delivering care -- doctors who work together in affiliated Permanente Medical Groups, patients who can get reimbursed solely for visits to Permanente practices and hospitals, and an ethic that stresses aggressive disease management and integrated care -- dates back to 1955 and is likely to remain, so to speak, permanent.

But Oakland, Calif.-based Kaiser is learning that innovation is inevitable: Its old-style reliance on tightly coordinated, closely monitored care as a way to hold down costs appears not to appeal to a significant, and perhaps growing, segment of patients and employers who desire freedom of choice.

Kaiser has begun marketing PPO products to all employers who desire them, and nearly all Kaiser regional plans now also offer "three-tier" point of service plans that allow members to choose either Permanente doctors, physicians on a national preferred provider list, or any other physician. Although Kaiser's HMO plans continue to be the most popular in all regions, a growing minority of businesses buying insurance from Kaiser offer the newer plans, which allow an unencumbered choice of doctors, for a higher premium.

Products with names like "added choice" and "multichoice" are steadily becoming "an important part of our portfolio" in markets beyond California where Kaiser is vying for customers against payers that have long offered HMO, PPO and POS alternatives, said Arthur Southam, MD, senior vice president of product and market management. This is most true, he added, in the small-employer market, where businesses want to hire a carrier but also want a variety of options.