Critics blast Kaiser's dominance for blocking efforts to cut costs


Once considered the untouchable model of integrated care, skillfully managing both hospitals and health plans, Kaiser Permanente has earned its share of critics in the last few months, most recently over whether the insurer is an obstacle to lower healthcare costs.

Oakland, Calif.-based Kaiser is now the dominant insurer for employers, with more than 40 percent of the market throughout the state. Some say this control has led to Kaiser refusing to negotiate rates with companies or explain why it continues to increase premiums, reported the Los Angeles Times.

For example, Kaiser has raised premiums 34 percent in the last five years for the city of Los Angeles, charging employees with families $1,306 a month, which is 10 percent higher than the $1,176 Anthem Blue Cross charges for the same plan.

"We are held hostage to Kaiser," Miguel Santana, the top budget official and administrative officer for Los Angeles, told the LA Times. "Kaiser takes us for granted, and the frustrating thing is they are not willing to have a discussion about their increases."

As a result of these concerns, legislation making its way through the California legislature is receiving strong support. The bill, SB 746, would require insurers disclose more details about rate increases for large employers and how they spend money. It already passed the state Senate and is waiting further action in the Assembly next month.

Kaiser said it already provides employers with detailed medical cost information, and it can't be compared to competitors because of its unique operating model. Employers and lawmakers 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," Teresa Stark, Kaiser's director of government affairs, told the LA Times.

Critics also have recently voiced concern about whether Kaiser intentionally priced its premiums high to prevent expensive consumers from applying.

To learn more:
- read the Los Angeles Times article

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