KAISER GOES HI-TECH

Joyce Bonner has relied on Kaiser Permanente for her health care the past 40 years. Except for the birth of her third son, at the Morse Avenue hospital 36 years ago, most of her doctor's visits have been routine - the kind of preventive maintenance for which the health care giant is best known. In the view of Bonner and other Sacramento-area members, that image of Kaiser is evolving, growing wider with the addition of the kind of high-tech medical care typically associated with university teaching hospitals and speciality medical groups. Bonner, 64, was among the first in the region to benefit from one of those sophisticated medical advances: a cochlear implant to restore her hearing.

Other highly specialized services also are finding a home at Kaiser centers in the Sacramento area. With the recent addition of two radiation oncology centers in Roseville and Rancho Cordova, cancer patients can now stay inside the Kaiser system for radiation therapy. And patients who need complex vascular surgeries are no longer sent to Stanford. Autistic children will have a special center for their care in Rancho Cordova beginning in June. And starting next month, infertile couples can opt for in vitro fertilization at Kaiser's Point West offices.

While patients have to pay out of pocket for some of the new offerings, many are part of the overall benefits packages. Driving the change over the past few years are membership growth, increased demand for broader services and a shift in the way Kaiser has positioned itself in the health care marketplace. "There has been an explicit effort to focus on the quality of care, becoming more of a quality leader rather than the low-cost leader," said Jill Yegian, director of health insurance at the California Healthcare Foundation, a health policy group. "Kaiser is trying to adjust to the fact that managed care as we knew it has undergone significant setbacks," said Walter Zelman, director of the California Policy Institute at the University of Southern California who worked on the Clinton health care reform proposal in the early 1990s. "People are concerned about quality, about having choice."

But that can be more costly. Jerry Fleming, a Kaiser senior vice president and health plan manager, acknowledged that Kaiser premiums on average have jumped about 10 percent per year the past two years, emphasizing that actual increases vary depending on the buyer's use of services. "We are in a competitive marketplace, so we have to bring in a premium that allows us to be effective," he said. Regardless, local Kaiser leaders say they are in a good position to offer increasingly specialized medical services.

Kaiser Permanente's market share has grown steadily in the Sacramento region; with nearly 647,000 members, it owns 34 percent of the market, up from 26 percent a decade ago. Kaiser's is a unique system in which its Permanente Medical Group works under contract with the Kaiser Foundation Health Plan, but the doctors are responsible for all medical decisions and drive the direction of care. "Our focus here is to do the right thing," said Dr. Richard Isaacs, an ear, nose and throat specialist and physician-in-chief at Kaiser's South Sacramento and Elk Grove facilities. "That's one of the powers of the system. There is no administrator telling me what to do." Mostly, Kaiser doctors are paid an annual salary that does not depend on the number of patients they see or on the cost of the procedures they do.

While many perceive Kaiser's approach as miserly, the doctors' lack of financial incentive pleases Bonner, who is glad her $50,000 cochlear implant surgery was done only after careful medical evaluation. Kaiser covered the entire cost of the procedure, which involves implantation of the device into the skull. The retired state analyst had been losing her hearing for decades because of otosclerosis, a condition that produces abnormal bone growth in the middle ear. Completely deaf in one ear and with just 10 percent of her hearing left in the other, doctors two years ago deemed her eligible for the implant, which processes sounds from the environment into electrical signals then sends them into electrodes implanted in the patient's cochlea.

Beyond the surgical risks, Bonner was initially reluctant to take the plunge because she would have had to make numerous four-hour trips to Oakland from her home in Volcano, in Amador County. She changed her mind last October, when doctors at Kaiser's South Sacramento facility began offering the surgery. Although the sounds she hears are different from how she remembers them, every one has been thrilling: "I can hear so many sounds I hadn't heard in years and years, like birds chirping, the car keys dropping, the water running," she said.

Kaiser patients unable to get pregnant will also have additional options soon. Dr. Jack Rosanz, Kaiser's physician in chief in Sacramento, said the new in-vitro fertilization program addresses demand, and physician recruitment problems. He said the medical group lost two top-notch reproductive endocrinologists because it lacked an IVF program. Dr. Kenneth Vu, a reproductive endocrinologist from the University of Hawaii, will run the program for couples who have exhausted other infertility treatments. "This is the next step for treatment," he said. "We have to do something to meet these women halfway. When we have to go outside the system, the sense is that the system failed." He said about 150 to 180 women have sought IVF treatment outside of Kaiser over the past couple of years. Kaiser has invested about $2.8 million to develop the program. Patients will pay out of pocket an estimated $8,000 fee for services, which includes the medications.

In some cases, Kaiser has looked very attractive to highly specialized doctors, who see opportunity in bringing their expertise into the large system with strong support systems in place. Kaiser now boasts the largest neurosurgery department in the Sacramento region, for example, with nine surgeons and two interventional neuroradiologists. Dr. Edie Zusman, director of adult neurosurgery at Sutter Neuroscience Institute, who began her career at Kaiser, has noticed the growth since her departure. "The emphasis in Kaiser at the time was on generalized neurosurgery rather than specialty programs," she said. "(Now) they are making important steps to meeting their members' needs."

It was a factor that attracted Dr. Victor Rodriguez, a highly sought after vascular surgeon specially trained to repair massive and complex aneurysms. "I've had offers elsewhere, but I like this place," he said. "I like the freedom to expand and grow. If you have the training, you want to be able to do these things."

Kaiser still has its limitations. It sends its heart surgery patients to Mercy hospitals. Some of the most complex neurosurgeries are done at UC Davis. And patients needing organ transplants are sent to the Bay Area. Still, there are more expansion plans on tap. Highest on the list: a move to establish the Sacramento area's fourth trauma center.

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USELESS BRITISH HEALTH BOSS REWARDED WITH A PEERAGE

The head of the NHS was forced out of his job yesterday after secret government forecasts revealed that hospital deficits were likely to spiral to œ900 million this year. Sir Nigel Crisp was given a peerage to ease his early departure after Tony Blair was said to have become anxious that the NHS had "taken its foot off the pedal". Sir Nigel had survived a reshuffle of senior executives in January after forecasts that hospitals were heading for debts of 623 million pounds. But days later he is understood to have learnt that pre-dicted deficits were running at more than 800 million pounds and he realised that he could not carry on.

One source said that pressure from Downing Street had been "intense" over the past six months after Sir Nigel was told that Mr Blair wanted to see results by April 2007 from all the effort and extra funding put into reform. Senior departmental officials were left in no doubt that success in transforming the NHS was a key part of Mr Blair's plans to leave a lasting legacy in transforming the public services. The source said: "The PM accepts it will be tricky financially but wants to see something to show for it at the end of that period [2006-07]." Downing Street said that Mr Blair had ten peerages to give out during the Parliament. Mr Blair's spokesman said: "The esteem in which the Prime Minister held Sir Nigel was illustrated by the fact he had recommended him for a life peerage."

Sir Nigel told The Times that he had walked, not been pushed. But he acknowledged that he had planned to stay for at least another year, and would have preferred to go when the service was "on the up". He denied any breakdown in relations with Patricia Hewitt, the Health Secretary, but there had been whispers for some time that ministers had lost confidence in him. More significant was a growing feeling in the senior echelons of the NHS that Sir Nigel, 54, could not pull it round. With many strategic health authority chief executives due to lose their jobs in the latest merger plans, loyalty to him ceased to have much value.

Insiders linked the fresh urgency from Downing Street to the appointment in December of Professor Paul Corrigan as Mr Blair's health adviser. Professor Corrigan is said to have believed that a shake-up of executives at the very top was necessary. Sir Nigel is to be replaced by two older men: Sir Ian Carruthers, 55, will become acting chief executive of the NHS, and Hugh Taylor, also 55, will become acting permanent secretary, two jobs combined by Sir Nigel.

The Conservatives said that Sir Nigel was the scapegoat for ministers' errors. Andrew Lansley, the Shadow Health Secretary, said: "Sir Nigel's rushed departure is a clear admission that the NHS centrally is in a crisis. Ministers can try to blame Sir Nigel but they are responsible. The NHS is plunging into the red because ministers raised costs and pushed targets without regard to the overall impact on services."

Since Sir Nigel took office in 2000, he has been responsible for spending more than 30 billion pounds in extra funding from the Chancellor. Yet he will leave office at the end of the month with the NHS facing its largest deficit since 1999. He said yesterday: "The deficits are clearly going to be too big, and I'm sorry we are going through a bad patch. There are three reasons for it. In some areas there are structural problems, which are getting worse. "The changes being made in the primary care trusts meant that there was less psychological pressure on managers to get the finances right. And we now have more transparency - financial problems that were disguised are now revealed."

Sir Nigel's fate was sealed after a panicky memo sent to the heads of strategic health authorities in February ordered them to stop within 72 hours all discretionary spending that did not affect clinical priorities. NHS finances had failed to show signs of recovery between December 2005 and January 2006, a time of year when deficits traditionally shrink. This year they grew, indicating a loss of control.This also came as a shock to Sir Nigel and made him question whether the SHAs were reporting accurately to him any longer. No 10 denied that Sir Nigel was "carrying the can" for the cash problems, saying taking responsibility was part of leadership. Traditionally ministers, not civil servants, carry the can

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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