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Kaiser Permanente Main Offices in Oakland, California
To the left is a photograph of the Kaiser Center of Power in Oakland, California.  This is where George Halvorson and Jay Crosson share an office floor.  They claim that they operate the two corporations at an arms length distance.  They claim that to the press and they claim that to the I.R.S.  Nothing could really be further from the truth.
 
This is the Pathway to Understanding the Permanente Profits.

Focus on the 15th to the 28th floor of the Kaiser Building to your left.  
Both Dr. Crosson and Mr. Halvorson have offices on the 28th floor.  On the 20th floor - is found Retirement funding; the 16th floor  is the Care Management Institute; the 15th floor -is where the Tax center is located.  We don't know what is on the 29th floor in case you are curious about that.   All Kaiser and Permanente facilities in this country are controlled out of this building.  

Profit comes from doing as little as possible for patients. The expected 2007 profit may hit $2 billion, an all time high.  Half goes to the physicians.  An equal 50/50 split.
 
The 50% Split of Profits At Kaiser Permanente

This is a summary of the development of the sixty year profit split at Kaiser Permanente whereby the physicians get 50% of every dollar that is collected from patients and government and not spent.  This is really the split of “profits” though Kaiser uses every possible word to cover-up the use of such a word – net revenue, operating margin, etc.  Even the bond companies paid by Kaiser to rate KP bonds have joined in to cloud the obvious presence of huge profits as well as the split with the MD partners.  The creation of profits for the physicians is the single most import principle at the mammoth HMO and guides every decision.  (CP)

1.       The idea of splitting profits 50:50 was presented to Henry J. Kaiser as Warren (“Dad”) Bechtel successfully invited  the former from a competitor to a partner within the San Francisco Exchange – both having been handy at tool work and new tool design but with little formal education; they went on to build projects like dams and highways all over the world (some useful and some useless). [Source – for “Dad” Bechtel’s formula for Kaiser was the book - “Henry J. Kaiser - Western Colossus.”]                          
 
2.       One Internet source said that Mr. Henry Kaiser was mostly a public and noisy stand in – Daddy Warbucks style - for the much more secretive Bechtel family (with their internal stock transactions and CIA level secrecy);  in the same way the Kaiser Plan has lots of press releases whereas  - quite to the opposite - the physicians’ Permanente Federation takes every advantage of being completely private with entirely internal stock transactions;  [thus penetrating the Permanente profit system is not easy though every physician on partnership track cannot wait until “vesting” [read as partaking in increasing profits].
 
3.       Sidney R. Garfield, MD “The Founder” of Permanente - made $250,000 profit during four years of the Depression in the early 1930s by taking in more money than he chose to spend on the care of those 5000 men and women building the California Aqueduct bringing water to Los Angeles;  he preferred to amass apartment buildings in Los Angles as he also told his nurses he was near to broke.  [Source for the $250,000 figure – page 18 in Chapter One – “The Desert Song – 1933-1938” in the Book – Can Physicians Manage the Quality and Costs of Health Care?” or hereafter called Book Source #1 – a book available for $3 on Kaiser’s current Website]  
 
4.       Henry Kaiser and Dr. Sydney Garfield joined together in 1938 on the Grand Coulee Dam in eastern Washington linked previous through Mr. Kaiser’s first employee – Mr. A. B. Ordway;  all three understood the importance of making a profit of projects related to the government [note that the key Kaiser high rise is called the “Ordway Building” at One Kaiser Plaza in Oakland];
 

5.       That concept of making a profit from doing government contracts has never changed – see the book “Henry Kaiser – The Rise of a Governmental Entrepreneur.”; the favorite government contracts for both Kaiser and Bechtel are those which – like some in Medicare – guarantee a profit over costs, which is not capitalism risk but rather straight profiteering at taxpayer risk.
 
6.       Mr. Henry Kaiser and Dr. Sydney Garfield married sisters in Lafayette, California; decisions about building new hospitals – like that in Walnut Creek, California – were probably made sitting out having cocktails on the porch in the evening; the other physicians were angry they were not consulted about this particular venture.   [Book Source 1]
 
7.       The Kaiser Organization/ Permanente Health Plan and [Dr.] Sydney Garfield and Associates, Inc. were both for profit entities when they reorganized for tax purposes in 1945 – the year they associate as their official [really tax] beginning; the lawyers wanted to make sure that at least two of the organizations looked benevolent so as to be quasi-charities or public trusts;  [Source -  Book Source #1 –page 77.] 
 
8.       Henry Kaiser then “bought out” Dr. Garfield; then “upon the advice of George Link, Kaiser’s tax attorney, Garfield withdrew completely from The Permanente Medical Group.” [Book Source #1 – page 77.]                             
 
9.       This was only for tax purposes because Dr. Garfield “was remaining on not only as executive director of the Health Plan but also as the De facto executive director of The Permanente Medical Group”;  and pretenses about being separate have since only been for tax posturing (now going on some 60 years), the IRS being a willing co-enabler of the profit-ladened HMO for most of its carrier. [Quote from Book Source #1 – page 80.]
 
10.   “… the  Permanente Health Plan, a non-profit trust, was established to take the program into the postwar era.  This new nonprofit organization was chosen instead of a corporation in order to avoid the charge of the corporate practice of medicine, which was at the time an unthinkable alternative.”  [Source Book 1 – page 62 – the corporate practice of medicine by Permanente groups is equally wrong AND ILLEGAL but alive and kicking at this time.]
 
11.   Henry Kaiser was so rich that he was able to leave $500 million as an endowment for the Kaiser Family Foundation (KFF) to permit yearly spending of some 10%; in Oakland alone he owned over 70 of his hundred plus for profit companies. [The Kaiser Family Foundation is so afraid of being tainted to the profit trail, they have no history on their Website; it is a little like the benign Nobel prizes being an offshoot of the profits of dynamite. ]
 
12.   The original organizational papers for the first Permanente Group – The Permanente Medical Group, Inc. – were clearly set up “for profit” in 1950 [original incorporation filing papers available]; there was never a doubt about that except that the Kaiser ads try to emphasize just simple physicians with only a salary base and tiny incentives;  
 
13.   The real problem came when the physicians wanted Dr. Garfield’s same cut of the action – the 50% in profits;  this was realized after a huge debate at Henry Kaiser’s Fleur de Lac home and the “Working Group” negotiations that followed, the conclusion being called the “Tahoe Agreement”;   [Source – two whole chapters on the Tahoe Agreement  in Source Book #1];               
 
14.   The agreement is in the Bancroft Library in Berkeley with original signatures and has been reproduced in the Kaiser book – “Appendix VII – Tahoe Agreement – July 14, 1955 – Decisions of the Working Council” by Raymond M. Kay, MD 1979; note that in IV section (2) “Any excess of revenue over the aggregate of these base needs would be shared in the Medical Groups and the Hospitals on some negotiated percentage basis.”  (page 171) [Source - Dr. Kay’s book – Historical Review of the Southern California Permanente Medical Group – 1979];
 
15.   The original document referred to above is in the faded copy to be found on the Berkeley Campus in the Kaiser Collection – copied for review within the KaiserPapers.org.; the signatures are hard to read but are typed in the above book by Dr. Kay on page 167 and include Henry J. Kaiser, Edgar J. Kaiser, Sydney R. Garfield, etc. all as trustees and Medical Group Representatives Cecil C. Cutting, MD, Raymond  M. Kay, MD, etc. [Outside of this book Kaiser has made no effort to copy this document since.]
 
16.   While many new organizations find all this  too risky to print, the material becomes crystal clear within Kaiser’s own favorite book – Source 1 – page 158 – details of the six point Tahoe Agreement included  “Fifthly, financial arrangements were established and agreed upon in which both the Hospitals and the Permanente Medical Groups would be supported in their basic needs.  Excess revenue would be equally distributed …”  [Kaiser spends $45,000,000 a year to try to hide the profit motive; only enough people believe them to keep their membership flat, never again to get above 9 million unless government makes them the “private” solution to the uninsured .]
 
17.   The profit split is also reflected in the Medical Services Agreement (MSA) in Article K (the sample showing up in Johnson County, Kansas court papers) whereby an angry Permanente partner sued the suddenly imploding  Permanente group; [Source – 100 plus pages of court records obtained directly by Dr. Phillips from the courthouse when he arrived in person. ]  {Note that in the case Timmis v. Kaiser, Kaiser turned over a sample MSA but left out Article K – Dr. Phillips then knew finding this Article would be useful to understanding how KP works.}
 
18.   All of Article K is on the KaiserPapers.org run by Vickie Travis.  A sampling includes the following:  “Article K – At Risk Compensation … K-2 Calculation … (c) If there is any Net Program Revenue, Planned At Risk compensation will be increased by an amount equal to 50% of Net Program Revenue …” 
 
19.   [The Article K limit is 10% of all “Medical Services Cost” so that the larger the portion of the organization that Permanente watches over (all outpatient operations) the less likely that the profit split will ever have a real limit; keeping hospital budgets low also achieves this as well; and in tax year 2003, for example, all hospital costs were below $6 billion while the payments to the physician groups went above that amount.
 
20.   The percentage of split achieved after calming Henry Kaiser down – probably annoyed since he had bought out the accumulated business value of the physician group from Dr. Garfield – “The Health Plan agreed to pay the Medical Group 50 percent of the net Health Plan revenue, if any.”  [Kaiser has never denied this – they simply will not comment on it (total silence like the Bechtel family where even bankers leave their briefcases outside the meeting room door).]
 
21.   Internally it is referred to as one of the MOUs – “memorandums of understanding” – private documents often; this understanding was repeated in; this Plan was explained with a photo opportunity picture in the Permanente Journal.  [Source -  see online article “A New Moment in the History of Kaiser Permanente” by Francis J. Crosson – Fall 1997 – the Permanente Journal – “The National Partnership Agreement” section with Figure 3 picture – Dr. Crosson and Dr. Lawrence front row center – now linked as the co-chair of KP – signing date February 5, 1997]
 
22.   Dr. Garfield – “the Founder” – relieved of direct license risk as he rose to administrative-only (after selling out to Mr. Kaiser) went on to transform the Kaiser organization into a business machine with patients often as the “worried well” [Source Book 1 – page 211] and physicians who needed to see themselves a coaches of healthy life styles but also as “profit centers” [Same book – page 176];
 
23.   the patients became the “external customers” – ravaged by their own imperfect life choices that salmon and broccoli could have avoided - and the nurses “internal customers” in the race for profits; [Source One Book.]; the nurses’ union was  later – like other labor groups, e.g. SEIU – pulled into the profit dividend enough that both are silence (employees feel they have no one speaking up now); [Another source for “External Customers” was “Service Behavior Expectations” booklet cover – Kaiser Fresno – 1998]
 
24.   In the 1971 interaction with CEO Edgar Kaiser - through Mr. Erlichman was clear about profiteering – “the less care they give them the more they make” (also recently reflected in the movie “Sicko”) [Source material – see” KaiserPapers.org” link to the University of Virginia library were the presidential tapes are kept]
 
25.   [President Nixon’s speech the next day suggested that HMOs were often costing 70% of fee for service; Medicare now has calculated that HMOs on the average have cost 108% of the cost of what they replaced - fee for service.]
 
26.   Kaiser helped draft the “HMO Act of 1973” which all but required physicians to be put at profit-loss risk for patient care; and all HMOs soon set physicians up for “full risk” contracts as being the most profitable. 
 
27.   Congress envisioned the risk to be kept among physicians and hospitals, but both groups have become expert at shifting the risk of illness back to patients; it now part of the insurance game to under test and under treat so as to not spend money on the full burden of disease, hence profits.
 
28.   In 1984 all physician Medicare payments were frozen for 15 months –“Deficit Reduction Act of 1984” - while compensation was studied; Kaiser wrote up its compensation for Medicare and it was published including the planned profit of each year;  [Source – Medicare Book – Payment for Physician Services – Strategies for Medicare – February 1986 – NTIS order #PB86-182011 – Library of Congress # 85-600641 – Box 7-B on gray paper – “Payment to Physicians in Northern California Kaiser Permanente Medical Care Program” – abstracted from Dr. M. Collen’s report to Medicare.]
 
29.   “The incentive payment was not considered to be a ‘surplus’ or an ‘excess’ of earnings, but a planned feature of the Medical Group’s physician compensation program.”   And in the same materials plans that are risk sharing (TERFA) “may realize the same profit rate on its Medicare enrollees as on its commercial enrollees, without limits on the profit the plan may earn.” (page 184)                                                                                    
 
30.   The only puzzle has been how big is the profit as Medicare was told it was only 5%; but that was – if true at all - 5% of the TOTAL Permanente budget, since Permanente takes on at risk all of the outpatient expenses (over half of the whole HMO budget) including all pharmacists, outpatient nurses, clinic overhead, etc.;  [Sources  – include the pay stubs of one former Kaiser nurse – Virginia Davies - from Oregon;  she has been fighting for years  for her fair retirement around employment records lost by Kaiser.]
 
31.   The “Prime Minister of the Empire” was Mr. Eugene Trefethen who carefully worked out the 50:50 split; the physician groups never like the word profit but had a better word for it: “The sharing of profits had always been an integral part of the physicians’ compensation – referred to as a ‘participation.’   The degree of ‘participation’ was based on longevity with the group …” [Source – page 91 of Dr. Kay’s book – “Historical Review of the Southern California Permanente Medical Group” – usually clear material in this early (1979) book by a key player – the Southern California unit existing in Dr. Kay’s “shadow” as the first Medical Director.]
 
32.   Thus the individual physician can within this system experience the division of a profit share – mostly delayed income – that doubles the total income for any hour; the key is that the income must not track directly from any one patient’s misery of care withheld. [One Arbitration judge suggested to Dr. Phillips that one would have to actually see the money moving as the particular patient suffered; he also commented “of course, they’re for profit.”]
 
33.   The physicians track the profits carefully and called the loss of profit in 1996-1997 one of the      three “near death” experiences in the history of the HMO; the head physician published an article in 2007 stating that the physicians must as taught by the Founder – Dr. Garfield – aka The Father - always keep “your hands on your purses”   [Source – The Permanente Journal – Summer 2007 – Volume II No. 3 “Purpose, Partnership, and The Permanente Federation’s Tenth Anniversary” page 61-62 by (pediatrician) – the Executive Director for The Permanente Federation (and also the co-chair with Mr. Halvorson of the top executive committee of KP called the Kaiser National Partnership Group (KNPG) and now Kaiser Permanente Program Group (KPPG)).]
 
34.      Most organizations think carefully before changing their various titles for internal clarity; Kaiser changes names of committees all the time as a method of confusing those watching from the outside;
 
35.   As to one of many views of the near death experience, Managed Care magazine in September of 2000 reported (“’New  Aetna and Kaiser Face Future”) that “On the other hand, it doesn’t pay to be too warm and fuzzy, as Kaiser Permanente found out. The company lost $881 million in 1997 and 1998.”; internally on an ER break room wall Kaiser pictured itself as a “mean machine” in 1998. [Dr. Phillips worked there and kept a copy.]
 
36.   Reporter Chris Rauber in a separate article in Modern Healthcare in May of 1999 – “First-quarter turn around for Kaiser” – reported “Even so, Kaiser’s operating losses in 1997 and 1998 totaled $881 million and its net losses over the same period topped $550 million.”  [The timing of the article was related to the Bond Market where Kaiser has $3 billion in bonds to build hospitals – JP Morgan and Citigroup as Underwriters; California helps to keep these bonds tax free – treating this profit system as a charity.] 
 
37.   Francis J. Crosson, MD, in his article “Permanente Medicine: The Path to a Sustainable Future” – in the Permanente Journal Winter 1999 characterized the profit of Permanente at about $600 million to $800 million a year in the “mid-1990s” to the loss of $270 million in 1997 and perhaps about as much expected for 1998; then in 2007 he referred to this time as one of the “near death” experiences in the same journal.
 
38.   The way out was the “Path to a Sustainable Future” [read Sustainable Future as retirement gold for the individual doctor] was his leadership as head of the Permanente Federation; that is now in 2007 a ten year leadership and he would like to be voted in for another 5 by trying to look as valuable as The Founder.
 
39.   Dr. Crosson’s goal is that KP achieve a 5% “margin goal” [read as profit goal] each year on a budget now approaching $40 billion – which would be $2 billion (perhaps to be achieved in 2007).  [Note Kansas City legal suit page 131 including minutes of a Permanente meeting in which Dr. Crosson was present by phone.] {He also recommending lower costs to the “lower one third of the market” [read as the poor].}
 
40.   The father of the HMO movement – Paul Ellwood who invented the term - in 2000 reported in the Globe Staff newspaper that a “A Kaiser official told me the other day, ‘Until better quality attracts more patients, I don’t care about it any more.’”; Mr. Ellwood suggested more power to the people.
 
41.   The IRS has only given out tax breaks as Dr. Crosson and Mr. Halvorson keep an “arm’s length” relationship between the Plan and the physician Federation; the IRS is not paying attention to  these two with the same 27th (second to top) floor of the Ordway Building;
 
42.   Further proof the physicians are more than salaried comes from an ad placed in a journal meant to attract Canadian orthopedists –the Kaiser orthopedist explained “Physicians are both employees and shareholder/owners.”    [Source – www.infinityheart.com/ontario-california.html  or http://www.aaos.org/wordhtml/mngdcare/empfrndy.htm];                     
 
43.   Most of the physician profit never leaves the Kaiser Plan as it funds the “unfunded” retirement plan; the Permanente partners retire with $15,000 a month AND their IRAs and Roth Accounts [Source - bankruptcy papers for Kaiser orthopedist Dr. Max R Moses – forever available in court records in LA and San Francisco transferred Online to the KaiserPapers.org Website; Dr. Moses and his wife pleaded guilty to misdemeanor tax evasion and had suspended jail sentences - 1991.];  {Dr. Moses had accumulated $260,372.00 in KEOH funds which had clearly come from Permanente group profits on top of his $26,000 a month salary and separate from the main retirement fund.}
 
44.   In the end “Kaiser Permanente” is the business plan by which the KP retirement fund (a real and registered business) is funded;  this is the whole point by which there is a need for a “Our Sustainable Future” [see the Permanente Medicine Map designed by Kaiser in 2001];  KP otherwise stands for the business plan called “the Kaiser Permanente Medical Care Plan” ;
 
45.   Kaiser Permanente is the most sophisticated method of withholding care ever developed on this earth; and the development of such junk science (“best practices”) within the sixteen floor of the Ordway Building at the Care Management Institute is actually deducted as if a public service, though the documents remain secret to patients.
 
46.   The real group thriving is the physician partners headed by Dr. Crosson (Jay) and Dr. Pearl (Bob), the later head of the largest group in Northern California – The Permanente Medical Group, Inc. or TPMG;  Dr. Crosson’s Federation and its business unit PermCo (think venture investments) are registered in Delaware for more tax avoidance;
 
47.   And while the Kaiser website states things like “non-profit” and “Permanente physicians devote their full attention to providing quality care to Kaiser Permanente members,” each physician partner doubles as an accountant watching over the other physicians nearby; and all Kaiser units are set in business competition with each other;
 
48.   New physicians coming to Kaiser get to go to a retreat with their wives to hear the financial possibilities – “Post program survey confirmed that the benefits and retirement presentation was highly valued and had high correlation with perceived value of staying with the medical group.”  [Source – Group Practice Journal – “Partnership Is a State of Mind – Not a Piece of Paper – Enculturation at Kaiser Permanente Orange County” by Richard Pitts, D.O. - March 2003 Volume 52 Number 3 -  also talks about DNA insertion of the new physicians.]
 
49.   Although Kaiser used the ad tagline “In the hands of doctors” for a number of years (like 1999), a judge ruled in Olsen/Victa v. Permanente that it simply was not true; Kaiser went on to buy out the plaintiff side so the full settlement around deaths from aortic aneurysms could be forever buried;
 
50.   Note in this lawsuit the accusation: “In order to effectuate these policies” [withholding care] “Kaiser implemented, among other things, physician bonus pay and leadership compensation explicitly keyed to profit targets to encourage such providers to reduce the amount and extent of healthcare services provided to plaintiffs and members of the Class.” [Class action – Case No. 301998 – First Amended Complaint – Superior Court – San Francisco – 1999]
 
51.   Rather Kaiser “distributes talking points quickly” when there is any hint of bad news, e.g. a physician pediatric abuser;  and they understand that Letters to the Editor are the best read parts of a newspaper [Source – of “talking points” – The Permanente Journal Winter 1999 – “Kaiser Permanente’s Public Images: Impact & Response” – the Talking Points being particularly useful near Washington, DC – one of the “most important .. media markets …”]
 
52.   The Permanente Journal [also online] is supposed to be used (in the same article as above) to “promote Permanente Medicine” (as distinct from the HMO) and to “market the KP organization.” [This is why the Permanente Journal has never been viewed as a real academic journal of any worth; their best article ever was on Hemochromatosis but only at a time when they were looking for patients for paid research.]
 
53.   Incidentally, as Charles C. Harwood, Jr. gave his online executive biography for Covance Inc. within Hoover’s Online he mentioned that he was the “director of the Mid-Atlantic Permanente Medical Group, the for-profit physician group serving the Mid-Atlantic region of the Kaiser Permanente health plan.”  [Source – March 14, 2001.]
 
54.   Each Permanente partner is forced to remain silent about all of these topics since the $2 million value retirement package can be removed back to Permanente by the “committee” without proof or contract.   [Source – materials from Dr. Moores  papers on the corruption of recommended bad physicians as the leave – papers shared with KaiserPapers.org – including received from a Physician currently with SCPMG - 
The “ Retirement Plan for Physicians Serving Members of Kaiser Foundation Health Plan … A Participant is subject to Disqualification for an Improper Activity if at any time during his or her Service or Retirement  (a) … engages in any activity, the principal purpose of which is to damage or discredit the Health Plan …”]       
                       

 
55.   Also notice in Dr. Phillips copy of the it is clear that cooperation is expected even after leaving temporary (fire “at will”) hourly employment:  “Professional Liability … Physicians agree to cooperate fully with TPMG and KFHP in the defense of said claims.  If a physician is no longer employed by TPMG, he/she will cooperate as necessary with the defense of any case.  In this latter circumstance, the physician will be compensated at a rate equivalent to the current unit rate for that specialty.”  So had Dr. Phillips been called back to testify, he would have been paid over $100 an hour to “cooperate.”  [As this would be paid after the legal event was over, it would be up to Kaiser Plan attorneys to decide if the testimony was useful to the cause of protecting the HMO.]
 
56.   Meanwhile the physician would be protected from malpractice “if the physicians act in a manner reasonably believed to be in the best interest of TPMG …” [thus again the attorneys can work free or charge the physician as they choose to interpret what occurred].   
 
57.   Physicians in Permanente that do try to blow the whistle are retaliated against, e.g. see jury award of $200,000 to ; unknown to the jury, Dr. Woods was terminated as a Permanente partner as the jury deliberated [retirement would also disappear with loss of partnership, the money reverting to the partnership].
 
58.   Physicians are expected to be Permanente partners for life – they agree to never work elsewhere without permission, the retire and work hourly after 65, they must use Kaiser as their Medicare “Senior Advantage” Plan, they must never criticize any part of the HMO, they must – if asked - defend the HMO against critics, they must keep the profit systems secret, etc.; otherwise a committee can vote to have their millions in retirement monies revert back to the partners (whether or not incorporated).
 
59.   Note in the legal papers of Dr. Moses’ bankruptcy there is the accepted fact that “A similar forfeiture and redistribution also would occur if after retirement, a physician were to render professional services for any hospital or health plan other than one operated by Kaiser.”   [Source – http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=use&vol=410&invol=441 page 3 of 22]
 
60.   Those who leave for other than medical reasons generally need to be licensed wounded on the way out through a sham peer review in which their care is suddenly called deficient with a plethora of witnesses easily assembled; since every professional in Kaiser practices just beyond the edge of competence, finding error is a target rich environment;
 
61.   One such physician told Dr. Phillips that he had achieved $1 million of his planned retirement vestings “so far” in fighting Permanente (Kaiser Plan attorneys) but was after the rest (probably well over another million dollars);  one way to achieve any such win is not to talk about any of this but perhaps to threaten too for leverage;
 
62.   The major myths of advertising then are as follows: the pretense that Kaiser Permanente is “non-profit”; the pretense that the physicians are simply salaried; and the pretense that their treatment guidelines are tied to science not greed;  [Source – Kaiser Website; note that Medicare believes correctly that Websites are advertising sites.]
 
63.   In the Spring of each year Kaiser bonds are for sale and there are brief releases about “net income,” like “Kaiser earnings are up 30%” in the San Francisco Chronicle February 16, 2007; that article even had a comparison of 2004 (5% “margin” or $1.8 billion) vs. 2005 at $1 billion vs. 2006 at $1.3 billion, but the words “profit” never appear.  [Profit in 2007 might go over $2 billion.]
 
64.   Most newspapers report the profit and then print the not-for-profit paragraph that accompanies the Kaiser news release; luckily more of them are recognizing that the Kaiser false ad tagline does not belong in an honest article.
 
65.   Knowing that their taxes are public, the various Kaiser Plans will try to spin profit into more money for their computer systems; any accountant knows that such expenses would have already been taken out before the net profit is calculated. 
 
66.   Colorado example - “Integrated communication minutes for Jan. 14 - … 4. Financials.  Discussion about messaging when we announce our 2003 profit margin (at one time estimated at $100 million, but now more like $85 million… Focus of message should be on talking about our investments in new facilities and equipment such as KP HealthConnect.  We need to reacquaint staff with where our profits go, so they can better explain to members.  Need to further explain to staff the relation between profits and their salaries/bonuses… ACTION: Sean Miller to do talking points, which can then be used for news release, staff and physician communication, customer service talking points, broker and purchaser communication and member communications.”  [Source – internal Kaiser Colorado documents show the spin the best; that is the most profitable unit with 5% of the KP patients producing 10% of the profit.]  {Kaiser first tried to accuse someone of hacking into the Colorado website but later agreed that the electronic window had simply been left open.}
 
67.   In the end Permanente runs the organization for profit using the illegal construct that the final goal is the” Permanente patient relationship”; the corporate practice of medicine is illegal in every state because it is without soul or oath.  [Source – see “corporate practice of medicine” condemned by the Medical Board of California.]  
 
68.   The retirement monies [Kaiser Permanente Master Trust – 94-6389453 and employer ID 94-1240523] are organized from the Safe Haven in the Caymen Islands (345-949-3181), a transition away from Deutschebank; the local outlet for the Caymen fund  is through Boston “State Street Bank and Trust” 225 Franklin Street, Boston, MA 02110 (1-617-786-3000). [Phone numbers for retirees to check on their benefits go to the 20th floor – room 2001 – of the Ordway Building – 510—271-994 – Oakland, CA – seven floors below Mr. Halvorson/Dr. Crosson.] 
 
69.   The movement of the worldwide funds is as mysterious as possible: “In Australia, Bankers Trust was acquired by Westpac from Principal Group, who had purchased it three years earlier from Deutsche Bank.  This organization now uses the name BT Financial Group.  The Trust and Custody business that Deutsche Bank acquired from Bankers Trust was sold to State Street two years later.”
 
70.   Such profits are built upon the blood, sweat, and tears of patients, those who thought they were joining some benevolent organization ; the profits come from care withheld.  This is the Grand Canyon between the supposed “sixty years of trust” and the reality of sixty years of compromised care.
 
 

 

                             Primary author – former Permanente (Kaiser) Physician
                                     – Charles Phillips, MD, FACEP


 

      

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