-
The
Kaiser
Health
Plan
pays
the
Medical
Group
a
certain
amount,
and
the
Medical
Group
pays
the
doctors.
A
summary
of
these
steps
is
provided
below.
-
Each
year
at
Kaiser
Permanente
parent
corporation,
the
Health
Plan
and
the
Medical
Group
in
each
region
enter
negotiations
to
determine
the
total
amount
of
money
that
to
the
physician
group,
using
the
cost
of
the
prior
year
as a
guide.
This
amount
includes
administrative
and
other
expenses
associated
with
operating
the
Medical
Group.
-
The
Medical
Group
calculates
the
amount
of
money
(the
"capitation")
that
the
Health
Plan
pays
to
the
Medical
Group
for
each
member.
-
If
at
the
end
of
the
year
the
actual
cost
of
the
medical
care
is
less
than
the
initial
contractual
amount,
the
Medical
Group
physicians
share
in
the
surplus.
It
is
the
total
costs
resulting
from
the
physician
group
upon
which
the
capitation
bonus
is
paid
at
the
end
of
every
year,
in
addition
to
each
physician's
salary.
-
The
Health
Plan
reimburses
the
Medical
Group
physicians
for
several
medical
costs
such
as
organ
transplant
that
are
exceptional
occurrences.
- Salary is the primary compensation paid to the physicians in the Medical Groups (which is augmented by any profit at the end of the year).
The Bright Spot at Kaiser
The Kaiser group places great emphasis on promoting a healthy life style. That in a lower need for expensive treatment, which improves the end-of-year profit received by the Medical Group physicians. For younger and healthy members, that works fine. And often the cost to be a member is less than an admitted for-profit medical plan.
The Reverse, or Deadly Side
For older members of Kaiser, including those developing cancer, including those that have been members for 40 or more years, the captivated payment arrangement results in less end-of-year additional income for the physicians. Their need for periodic CT or PET scans to detect cancer or other medical conditions, and the costly cancer drugs, are an incentive for denying tests, denying surgery to cancer patients, and encouraging cancer or other patients to do nothing until the advancing cancer produces intolerable pain.
Incentive for Denying Costly Tests and Treatment
Obviously, the "capitation payments" that results in increase compensation for the physicians when they withhold costly treatment, to the members, such as the high cost of many cancer drugs, carry an incentive for many physicians to withhold expensive tests such as CT scans and treatment, especially costly cancer treatment. It is the senior member that would be most effected by this self-serving withholding of care.