Kaiser Permanente. The Writer Explores

¶ … Kaiser Permanente. The writer explores a successful management decision of the company and explains why it was successful. For many years the American health care system has been under fire for its high prices and its refusal to accommodate the working poor. Every day there are news stories broadcast about someone who needs medical treatment and is unable to obtain it due to lack of funds and lack of insurance.

It is something that political candidates hang their hats on regarding forums and promises yet when all is said and done not much has changed over the years. Kaiser Permanente, one of the nation's first and largest Health Maintenance Organizations (Ranking, 2005), has come under fire for years with regards to the way it operates its facilities.

People who belong to the HMO receive care at one of its many centers however, for those who do not belong the organization gives the appearance of being a large wealthy conglomerate designed to ignore the poor. Several years ago the organization made a management decision that paid off in several ways, when it dedicated $100 million to providing health care to children who were underprivileged in its surrounding communities.

The decision was a significant success because it boosted the public image of the HMO, provided a much needed community service to the community, and allowed for public relations opportunities which in turn encouraged the support and joining of many who were impressed by the gesture and could afford insurance. WHAT IS KAISER? Kaiser is a Health Maintenance Organization. In simple terms it is a health care plan that is the opposite of a pay as you go operation.

Those who belong to Kaiser, either through individual plans or company health plans pay a single monthly premium and that premiums covers the cost of any and all health care needs the patient may have, up to and including surgeries or stays in intensive care. The basic premise for such health maintenance organizations is that the premiums from those who remain healthy more than pay for the health care costs of those who need them.

For example if one person needs gallbladder surgery, the costs of that surgery are offset by the 1,000 other members who pay premiums each month for years without ever needing any medical treatment or costly procedures. Through the years Kaiser along with other HMO's have been accused of limiting the care its patients receives, providing financial incentives to its on staff doctors for reducing the number of testing ordered and other implications which would translate to poor medical care.

Combating this image has been a management priority for many years in the Kaiser organization and several years ago it made a $100 million management decision that boosted its public image significantly. WHAT WAS IT? Kaiser made the decision in 1997 to commit $100 million to the health care of children who otherwise might not have had access to that care (Cheers, 1997). The decisions sent accolades throughout the nation as word spread of the generous and expensive decision made by the top management team of the HMO.

It was a five-year plan and promised health care to 50,000 children. Then president Bill Clinton made public speeches praising the efforts of Kaiser in alleviating a portion of the nation's health care reform issues with its decision. That provided much needed positive publicity for the HMO (Cheers, 1997). Clinton praised the proposal from Kaiser-Permanente announced as part of his trip to fund a five-year $100 million program to offer health care insurance for 50,000 underprivileged children.

Too many parents face the agonizing and impossible choice between buying medicine for sick children or food for their family," Clinton said. "We must do better and we can. I hope this will encourage other health providers to do the same. Fifty thousand here, 50,000 there and pretty soon you have a lot of Americans with healthy families (Cheers, 1997)." The plan was designed to work with schools and other child-based entities to locate and offer children health care that would otherwise not receive it.

In addition it offered those services to children who were eligible to receive or were already receiving state paid Medicare services. WHY WAS IT A SMART Management MOVE? There are several reasons that this commitment and plan provided a smart management move on the part of the organization. One of the first things the HMO did once the plan was announced was to begin challenging other health care foundations and organizations to provide similar services to their communities.

Kaiser is large enough that it can provide a $100 million plan to the public however, many of its competitors cannot which provided the opportunity for Kaiser to appear to be more generous and community minded than its competitors as they failed to meet the challenge (Announced, 1997). The HMO was able to parlay the move into a public relations gold mine with many speeches and announcements surrounding the announcement to move forward with the plan.

California needs a healthy, productive, well-educated workforce for the 21st century, but millions of children and youth are at a disadvantage because they aren't getting proper health care," said Dr. Lawrence. "President Clinton has called for action on the issue, and as the state's largest not-for-profit health care organization, Kaiser Permanente is stepping up to make the first move," he said (Announced, 1997).

" The above statement provided an understanding to the public that Kaiser is willing to do its part to protect the future leaders of the nation by providing health care to the children of today for the future of tomorrow. The second benefit to Kaiser through this management decision is the ripple effect it had. During the campaign, recruitment and outreach to sign children to the plan there was a lot of publicity in the schools, the streets and other areas of common societal interest.

This meant that people who had not been exposed to Kaiser or had only heard negative things about the HMO were given the opportunity through assisting in the outreach efforts to become familiar with the program and its offerings to its patients.

In the long run the program most likely created a new base of paying customers as well because those who helped with the outreach or were impressed with the efforts made by Kaiser checked the program out from a paying standpoint and Kaiser signed on more paying customers during that time as well. The commitment by Kaiser to commit $100 million over a five-year period.