Suit charges Kaiser with false advertising practices

Wednesday, March 17, 1999

By Rachael Kagan

Kaiser Permanente used false and misleading information in its television advertisements to recruit new members, a class-action lawsuit filed Tuesday alleges.

In its ads, the health maintenance organization states that only doctors, not insurance administrators, make decisions about patient care at Kaiser.

“That is an emphatic statement that can be easily refuted,” said Jamie Court, advocacy director of the Foundation for Taxpayers and Consumers Rights, which filed the suit. “Anyone who joins was subject to the representations in those ads.”

From 1996 to 1998, nearly 500,000 members were duped into joining the health plan on the strength of the spurious ads, which cost Kaiser $60 million per year, Court alleges.

Kaiser officials said Tuesday its doctors were enraged by the allegations.

“Medical care at Kaiser Permanente rests in the hands of doctors,” said Dr. Sharon Levine, associate executive director of the Permanente Medical Group of Northern California. “It’s the thing of which we’re most proud. No health plan administrator has anything to do with any decision made in the exam room.”

The suit names Kaiser’s health plan and hospitals and the Permanente Medical Group as co-defendants. It says doctors’ influence has been slipping at Kaiser over the last four years as administrative and fiscal concerns have undercut medical resources.

Health plan policies that reduce the number of patients hospitalized, shorten the length of hospital stays, shift certain duties from doctors to less-trained medical staff, limit access to prescriptions and cut the medical budget, all erode the decision making power of doctors, Court said.

The suit, filed in State Superior Court in San Francisco on behalf of Kaiser patients, covers both television and print ads launched by the nonprofit health plan. The most recent series uses the slogan, “In the hands of doctors,” and cost $8.4 million last year, Kaiser officials said.

In addition to seeking damages for patients supposedly deprived of medical care, the action seeks to have Kaiser’s ads yanked from the airwaves.