What A Deal!

There are weeks when I spend most of my time on the beach (my way of saying being retired) being a grandfather. The past week was one such week.

Instead of thinking deep thoughts about our purportedly wayward healthcare situation and putting the resultant thoughts into writing, I spent more time than usual with my grandchildren.  In many ways, that time spent is more satisfying than the years I spent as a healthcare system CEO.

Still, a few things caught my eye that are worthy of comment.  Kaiser Permanente, whose top management specializes in virtue seeking while spending other people’s money, received criticism this week for sponsoring “Thrive City” at the new home of the Golden State Warriors opening this September in San Francisco. I commented about this two weeks ago in “How Not To Spend Money”.  Normally, when Kaiser does these kinds of things, they escape criticism.  Not this time. About time someone in journalism woke up.

On Sunday the San Francisco Chronicle ran an article based upon some research they did on the amount of money Kaiser was committing to this virtuous project.  Kaiser had been steadfastly ignoring requests for the dollar amount.  According to the Chronicle, it may amount to as much as $295 million over a twenty-year period.  That’s a lot of virtue devoted to a fabulously rich basketball team by a nonprofit health plan. I want some.  Any.

Earlier this year, Kaiser committed to another virtuous project to the tune of $200 million to help with the homeless problem in areas where they have facilities.  The homeless problem is real but is this commitment of resources what the purchasers of Kaiser health insurance want to pay for?  I doubt it.

Keeping on the Kaiser theme, the June 17 issue of “Modern Healthcare” contained a brief item regarding Kaiser’s displeasure with a healthcare system in Honolulu which was planning to bill directly Kaiser patients who used its emergency service now that its contract with Kaiser has expired. The nerve!

The thrivers at Kaiser were upset because, well, just because. Kaiser wants to pay the healthcare system what Kaiser considers an “usual and customary rate” for its members and does not want its members directly billed.  Put another way, Kaiser wants to determine what it should pay when another healthcare system helps it thrive.  Kind of like going into a grocery store and telling them what price you will pay for a loaf of bread.

Sound familiar?  I wrote about a similar situation in California in “Chumps” in February.  I related how NorthBay Healthcare had won a legal judgement against Blue Shield in a similar situation and how NorthBay and other providers in California were proceeding in similar fashion against Kaiser.  Everyone deserves to thrive.

So, let’s sum up the situation. So far this year Kaiser has committed almost half a billion dollars for virtuous actions unrelated to the direct provision of healthcare, sticking that bill to the public and private employers who buy health insurance from them.  At the same time, they expect other providers to subsidize these wonderful endeavors by gratefully accepting what Kaiser wishes to pay for services provided to their members.

What a deal!  This is why being a grandfather makes more sense sometimes than being in healthcare.

P.S.:  The thrivers also announced last week plans to build a new $900 million headquarters in Oakland.  It’s good to be the king or at least a virtuous thriver. That makes almost $1.5 billion dollars in non-healthcare  spending so far this year.  Hope those paying health insurance premiums take note.