Kaiser Permanente Arbitration Cases Show ‘Systemic Problems,’ Critics Say

Nine cases since 1995 in which arbitrators have found Kaiser Permanente liable for patient injuries or deaths "illustrate the same dangers identified by state officials 'who have levied a $1.1 million fine against the HMO:' not enough staff and overcrowded facilities," critics of the insurer say. According to summaries of the nine arbitration cases, obtained by the Los Angeles Times, Kaiser has been ordered to pay more than $3.5 million for "lapses in emergency or urgent care" since 1995. "Dissatisfied" Kaiser patients who seek damages must go through arbitration, because the HMO "requires enrollees to waive their right to sue," the Times reports. Attorneys for patients say that problems at Kaiser are "more extensive" than the public record suggests, because "only a fraction of what Kaiser has paid out in cases that were settled and sealed from the view of both the public and HMO regulators" is in the public record. Records show that Kaiser has settled nearly half of its recent arbitration cases, the Times reports. Bruce Levenson, a lawyer in one of the arbitration cases, said, "There's systemic problems with everything they do. I think they give you as little care as they possibly can. ... They cut corners" (Ornstein, Los Angeles Times, 1/2). The Department of Managed Health Care levied a $1 million fine against Kaiser in May 2000 for "systemic problems" in its emergency care system and increased the fine by $100,000 last year after adding two patients to the original complaint (California Healthline, 11/29).

Kaiser "denies that it has systemic problems," the Times reports. Given that millions of patients receive care through Kaiser, the HMO said the arbitration cases should not be considered a pattern. Kaiser spokesperson Jim Anderson said that the health plan is more likely than other insurers to be "targeted by arbitration complaints" because it owns its hospitals and works "primarily" with one medical group, which leads patients to "associate quality of care with the HMO itself." He said, "These cases are obviously things that everybody wants to pay attention to. But to suggest anything other than that they represent [nine] individual medical malpractice cases is stretching a long way" (Los Angeles Times, 1/2).