Kaiser Permanente seems to be in hot water in California.
According to the Los Angeles Times, the HMO-style health care provider has angered some of its largest corporate users with a series of premium increases that, the companies say, are undermining Kaiser's own competitive advantage.
Kaiser told the Times it believes it isn't premium increases that employers are complaining about but transparency issues that have to do with the way Kaiser reports medical procedure data.
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Businesses and the state of California are "trying to force us to report information in the same fashion as every other health plan, which basically breaks us apart at the seams," said Teresa Stark, Kaiser's director of government affairs. "It is undoing everything about Kaiser Permanente that does make us special. The message is Kaiser, you are doing it all wrong."
Some employer groups have, in fact, lobbied the state legislature to create laws that would force Kaiser to change the way it justifies premium increases.
The employers say that other healthcare providers are reporting cost information with much greater transparency than Kaiser. And there's no doubt that Kaiser's rates have jumped.
Employer frustration has flared up as officials in the city of Los Angeles, San Francisco and at the California Public Employees' Retirement System bristled at Kaiser's latest rate hikes, the Times reported.
At CalPERS, the nation's third-largest healthcare buyer, Kaiser's premiums have shot up 65 percent since 2007. In comparison, Blue Shield of California's HMO rates have risen 50 percent and premiums for an Anthem Blue Cross preferred-provider plan have increased 43 percent for the same period.
In response, lawmakers introduced a bill that would require the company to disclose more details on how it calculates rates and spends money. Some powerful interests are supporting the bill, including AARP, big labor unions and the Safeway grocery chain, while other health insurers and business groups have joined Kaiser in opposition, the Times reported.
With major players in the benefits field facing off over the bill, the outcome of SB 746 may well have major implications for other healthcare organizations in California and perhaps other states when it comes to justifying premium increases.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
