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CIty of Redwood City 4 I KAISER PERMANENTE TODAY We have grown from our roots as a 12-bed hospital in the middle of the Mojave Desert to become the largest private health care program in the world. The 12 community-based plans, called Regions, that form the program serve 7.4 million members in 17 states and the District of Columbia. Each of our established Regions is a Federally qualified Health Maintenance Organization (HMO). Almost all decisions concerning the day-to-day management of health care services and facilities are made at the Regional level. In each Region, an independent Permanente Medical Group contracts exclusively with the Kaiser Foundation Health Plan to provide physician services. This organizational structure represents a cooperative approach by the professions of medicine and management, and assures physicians and managers an opportunity to present their views on all major policy decisions. Our structure and size make us both a local and a national health care resource. The term managed care describes a continuum of services ranging from group practice HMOs, network HMOs, and IPA HMOs, to point of service plans, PPOs, and indemnity insurance plans with utilization review features. Within this continuum, our prepaid group practice HMO model encompasses, and is responsible for, managing more components of the health care delivery system than any other carrier. As a result, our model is generally accepted as providing a benchmark for other managed care plans. We have earned the designation as a bench mark as a result of integrating, over half a century, the following features into our delivery system: 1. Group Practice. Multi-specialty group practice provides a formal structure for managing medical practice with an emphasis on quality. This is achieved through: a) the selection and credentialing of qualified physicians dedicated to caring for health plan members, b) ensuring ongoing evaluation of physician performance through formal and informal peer review, c) providing an organized quality assurance program. In addition, group practice facilitates consultation with, and appropriate referral to, specialists and enhances continuity of care. Due to the manner in which individual physicians are compensated, there is no incentive to provide unneeded or unnecessary services. Kaiser Permanente's unique compensation system encourages physicians to provide the most appropriate care based on the patient's condition and needs. 2. Joint physician-management responsibility. As a joint endeavor, physicians and managers share responsibility for program effectiveness including joint responsibility for significant policy, planning, and resource allocation decisions. 3. Organized facilities and services. Having a known membership provides a sound base for planning, financing, hospital building and/or contracting, and organizing medical office facilities and supportive services to foster the efficient delivery of health care in a manner convenient for the membership. ,.- ".",-'--'" '.'-r