KAISER PERMANENTE: TO CONSOLIDATE CALIFORNIA OPERATIONS
"Kaiser Permanente, the nation's largest" HMO, "said itThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
plans 'to more fully capitalize on its size'" by merging its two
large Northern and Southern California regions into a single
statewide unit. "This will allow us to present a single face, so
that we appear to be one health plan with one set of benefits and
policies," a Kaiser spokesperson said (Rundle, WALL STREET
JOURNAL, 1/15). SAN FRANCISCO BUSINESS TIMES reports that the
move is designed to cut costs through the consolidation of the
two divisions' "administrative, marketing and support"
operations. "Numerous administrative and support jobs" and
departments are expected to be eliminated as part of the
consolidation. In addition, one or both of the two divisions'
chief executives -- Hugh Jones, who heads the Southern California
region, and David Pockell, head of the Northern California region
-- may lose their jobs, according to insiders.
BENEFITS: In addition to the savings generated by the
elimination of duplicate departments, Kaiser will be able to deal
with large employers as a single entity, "rather than two
relatively autonomous units with different styles and personnel."
Businesses with employees statewide, as well as purchasing
groups, will likely be pleased with the organizational changes,
said Glenn Smith, a health care consultant with Watson Wyatt
Worldwide. Right now, he said, "it's like dealing with two
entirely separate HMOs, with slightly different administrative
and premium requirements."
SIZE MATTERS: Kaiser's Northern California unit "has nearly
33,000 employees overall and operates 16 medical centers in the
region," BUSINESS TIMES reports. The Southern California region
has nearly 28,000 non-physician employees and operates 10
hospitals (Rauber, 1/13).