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Get to know Kaiser Permanente

As a health care organization in the 21st century, we have a mission—to provide quality care for our members and their families, and to contribute to the well-being of our communities. See how we dedicate ourselves to this mission.test

Home kp.org
Our Web site shows the many ways that Kaiser Permanente can help you live well. Consult our facility directory to find medical offices and hospitals close to work and home, get information on a variety of health topics, and look up doctors’ specialties and qualifications. And that’s just the beginning…

Our community involvement
See how Kaiser Permanente reaches out to the communities it serves.

History of Kaiser Permanente
Henry Kaiser's revolutionary ideas about health care helped give birth to Kaiser Permanente. Learn how we became one of America's leading health care organizations, delivering quality care to more than 8 million members.

Structure of Kaiser Permanente
Find out more about how we are organized. See facts, figures, and more.

FAQ about our medical care
Get answers to frequently asked questions about how we provide medical care and address important health care issues.


Introduction

Health care organizations, including Kaiser Permanente, have become a main feature of many political campaigns, and have received a great deal of media scrutiny.

As a service to our members and health care consumers in general, we offer these answers to frequently asked questions about medical care. We hope that this provides the information you need about important health care issues, and how Kaiser Permanente provides care.

Medical decisions

Q. Who makes medical decisions at Kaiser Permanente?

A. At Kaiser Permanente, medical decisions are made by physicians and their patients working together. The doctor-patient relationship is the foundation of our care.

Physician compensation

Q. How are Kaiser Permanente physicians compensated?

A. Our doctors are compensated as a result of a two-step process: (1) Health Plan pays the Medical Group; and (2) the Medical Group pays the doctors. A summary of these steps is provided below.

Health Plan pays the Medical Group

Each year at Kaiser Permanente, the Health Plan and the Medical Group in each region negotiate and agree on the total amount of money that is estimated will enable our physicians and other clinicians to provide the amount of professional medical care that our members are expected to need in the upcoming year. This estimate is based on the previous year's performance (and the years prior to that), and also includes administrative and other expenses associated with operating the Medical Group.

That total is then divided by 12 months, and then divided by the number of expected members in the coming year. That calculation results in an amount of money (the "capitation") that the Health Plan pays to the Medical Group on a monthly basis for each member.

In addition, the Health Plan reimburses the Medical Group for its actual cost for certain medical and other expenses that may be difficult to forecast, such as transplants and contingent expenditures. The total is called the "basic contractual payment."

In the event that the total of all payments, as adjusted throughout the year, is insufficient to provide the needed care, Kaiser Permanente dips into its reserves for shortfalls. Then, during the following year, dues may be raised and reserves replenished. If the basic contractual payments, including the capitated payments, are greater than the actual cost of the necessary medical care, then the Medical Group, as a whole, is permitted to share in some of the surplus.

The remainder is retained by the Health Plans to fund reserves, build hospitals and/or other medical facilities, keep dues lower than they otherwise would be, and the like. Some of the regional Health Plans also reward a Permanente Medical Group for improvements in member satisfaction and/or improvements in preventive medicine or other quality standards.

Medical Group pays the doctor

After the Health Plan pays the Medical Group, the Medical Group uses that money to pay its doctors and other personnel, and to meet its other expenses.

The primary compensation method used by all of the Medical Groups is salary. Salary generally varies with medical specialty and tenure. Smaller amounts of additional compensation may be paid for, among other things:

  • board certification
  • achievement of specified clinical quality measures
  • achievement of member satisfaction levels
  • productivity
  • continuing medical education
  • managerial work
  • work performed in excess of normal work time, etc.

In addition, in some Medical Groups, the excess money that the Medical Group retains, if the basic contractual payments exceed the actual cost of care on a regional basis, also may be used to pay additional compensation to doctors and other personnel.

As of 2006, approximately 95 percent of physician compensation was paid in salary.

This is a summary of the arrangements between each of the regional Health Plans and Medical Groups and each of the Medical Groups and their respective doctors. These arrangements vary by region.

Some people believe that capitation payments carry an incentive for preventive medicine to keep patients healthy. Other people believe that capitation payments provide physicians an incentive to withhold treatment.

We believe that our compensation process does not create an incentive for our physicians to make patient care decisions based upon factors other than the medical needs of the patient because:

  • Kaiser Permanente's form of capitation is based upon collective performance, rather than the individual performance of a physician, and
  • Permanente physicians are compensated primarily by salary.

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Medical care and prescriptions

Q. I've heard that HMO administrators pressure physicians to discharge their patients from hospitals, including women who have undergone mastectomies. What does Kaiser Permanente do?

A. At Kaiser Permanente, clinical decisions are made by physicians working with their patients. The decision of how long a mastectomy patient stays in the hospital, or whether a hospital stay is recommended, is based on what is medically and psychologically appropriate for each individual patient.

Outpatient mastectomies (in which the patient goes home the same day of surgery) are becoming more common, and many women choose to recover in the comfort of their homes, with appropriate support, instead of in the hospital.

Kaiser Permanente does not require mastectomies to be performed on an outpatient basis, and there are no restrictions on coverage for overnight hospitalization, if this is what the physician recommends. If, after surgery, a patient's medical or emotional state indicates the need for an overnight stay, this care is provided. Our highest priorities are the successful outcomes of surgeries, and the emotional well-being of our patients.

Q. I've heard that HMO administrators pressure physicians to discharge their patients from hospitals, including new mothers and their babies. What does Kaiser Permanente do?

A. At Kaiser Permanente, clinical decisions are made by physicians working with their patients. The decision of how long a mother and her newborn baby stay in the hospital is made by the physician in consultation with the mother, based on what is medically appropriate for the mother and child. If there is a medical reason to extend the stay, our physicians decide with patients when discharge is appropriate.

Each year, Kaiser Permanente is responsible for nearly 80,000 births. We have the experience and the data to demonstrate that having a baby at our hospitals and medical centers is a safe and satisfying event. Kaiser Permanente focuses on promoting good health and regular care throughout a woman's pregnancy—including quality prenatal and postnatal care.

Many mothers and newborns can leave the hospital within 24 hours from birth. Many women prefer the comfort of home, away from the noise and disruptions of the hospital, for recovery.

Q. Recently I've heard a great deal about HMO drug formularies that restrict patients' access to necessary pharmaceuticals. Does Kaiser Permanente use a formulary, and who decides which drugs are included?

A. Kaiser Permanente has developed prescription drug formularies—lists of drugs that have been approved by review boards of Kaiser Permanente physicians and pharmacists—to ensure that appropriate medications are available for our members, while also providing these drugs cost effectively. Kaiser Permanente's formularies are doctor-driven and quality-based.

As an integrated delivery system, Kaiser Permanente seeks input from the entire range of health care specialties in developing our formularies. In doing so, we evaluate each medication for:

  • safety
  • effectiveness
  • patient convenience
  • patient compliance
  • effect on the number of calls and visits to physicians, emergency rooms, and hospitals
  • quality of care
  • number of side effects, and
  • cost

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Quality of care

Q. I've heard that the quality of care provided by HMOs is inferior to that provided under traditional, fee-for-service coverage. How does Kaiser Permanente ensure quality?

A. At Kaiser Permanente, one of our top priorities is to continually improve the quality of health care we provide. By coordinating patient care and working closely with their fellow physicians, the Permanente Medical Group physicians lead the way in improving clinical practice, conducting medical research, and improving overall health care quality for our members and our communities.

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Access to care

Q. I've heard that HMOs deny patients access to care in order to please Wall Street investors and ensure their profitability. Is this true for Kaiser Permanente?

A. Because we are a nonprofit health plan, Kaiser Permanente is not publicly traded. We do not have shareholders and, therefore, can invest our resources in providing affordable, quality health care for our members and the communities we serve.

Learn more about who we are and the structure of Kaiser Permanente.

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Other concerns

Q. I've heard that HMOs don't provide coverage for the poor and the uninsured, and don't participate in medical research. How does Kaiser Permanente address these important social goals?

A. We contribute to a wide range of community programs and activities across the nation. These efforts include:

  • providing health coverage through our dues subsidy programs to those who otherwise could not afford it
  • providing subsidies to help individuals and small employer groups afford health coverage
  • contributing to medical knowledge and to the improvement of clinical care nationally through our clinical and health services research projects
  • offering education and training programs for physicians, nurses, and other health professionals
  • partnering with local governments to meet community needs
  • providing grants, equipment, expertise, and volunteer hours to community organizations

Kaiser Permanente has established a national program for uninsured children. We devote a minimum of $30 million annually to subsidize health care coverage for uninsured and underinsured children, with a goal of helping 70,000 children each year.

Advancing medical knowledge through clinical and health services research is a key part of helping to improve the health of communities. Our community investments support research for important medical and social needs such as:

  • preventing violence
  • preventing infectious disease
  • improving health care for adolescents
  • improving health care for underserved populations

For nearly 50 years, Kaiser Permanente researchers have turned modest grants into major discoveries that have served our communities, influenced national policy, and affected medical practices throughout the nation and the world.

Learn more about our community involvement.

Q. I've heard about an HMO consumer bill of rights and other HMO reform legislation. What is Kaiser Permanente doing to address consumer concerns?

A. Kaiser Permanente has joined with the American Association of Retired People, Families USA, HIP Health Insurance Plan, and Group Health Cooperative of Puget Sound in proposing consumer protection principles.

Kaiser Permanente, with the American College of Emergency Physicians, also supports national legislation that would assure appropriate access to emergency medical services. We believe that a single national standard should be developed so that the costs of conflicting or duplicate federal and state enforcement measures are reduced.

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