Kaiser to reveal incentives for physicians

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Kaiser Permanente will make public financial incentives it offers physicians and will not resume a program that offered call-center clerks bonuses to limit patient appointments with doctors.

The agreement, announced Thursday, settles a lawsuit brought by several consumer groups that struck at the heart of the public’s misgivings about managed care: the fear patient care is influenced by financial incentives.

In agreeing to the settlement, the nation’s largest HMO becomes the first major insurer to make public details on how it structures the pay and bonuses of its physicians.

Kaiser, a non-profit organization, will also post on its Web site guidelines that it gives physicians on recommended treatments for many conditions. It would not say how soon the information would be available. The HMO has 8.4 million members in California, Oregon, Hawaii, Colorado, Maryland, Virginia, Georgia and Washington, D.C.

Kaiser has set a very high bar for public disclosure,” says Jamie Court of Consumers for Quality Care, one of the groups that brought the lawsuit. “The public has a right to know. Kaiser is setting an example for every other HMO.”

His group filed a lawsuit in 1999 alleging that the HMO misled customers in a TV ad campaign that said Kaiser administrators did not stand in the way of patient care. At the time, the public perception of the HMO industry was one in which accountants and consultants called the shots.

Kaiser‘s campaign attempted to set its HMO apart from others, saying its doctors were in control of medical decisions. But the lawsuit alleged that Kaiser misled members. The lawsuit, filed under California’s Unfair Competition law, alleged that Kaiser cut its medical budget while adding members, tied a portion of doctors’ pay to how well they limited certain medical services and developed treatment guidelines based partly on advice from cost-conscious consultants.

In a statement issued jointly with the consumer group, Kaiser said it is continually improving the quality of its care. “It is particularly gratifying to turn conflict into a productive collaboration with these important consumer groups,” said Bernard Tyson, a senior vice president.

Kaiser would not comment on the allegations made in the lawsuit.

During the litigation, unionized nurses from the California Nurses Association complained to state officials and the consumer groups that bonuses were being paid to reward call-center workers who excelled at booking fewer appointments and transferring fewer calls to advice nurses.

Clerks in three of Kaiser‘s Northern California call centers could earn a bonus of up to 10% of their salary for meeting the guidelines, which included making appointments for 35% or fewer of the callers and transferring fewer than 50% of calls during the day — and 60% at night — to trained advice nurses.

Kaiser halted the “demand management” program in December 2001. Nurses were not part of the program.

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