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The much bigger story today is that George Halvorson is once again proving that he has destroyed accountability at Kaiser Permanente: instead of paying a $25,000 fine for an egregious medication error that led to the death of a baby, he’s ignoring the fine. Read the story over at Kaiser Thrive. I’ll have more on medication errors and HealthConnect shortly, though.

A source inside IBM confirmed to me that a comment on this morning’s HIStalk is accurate: Kaiser Permanente is moving rapidly towards outsourcing a significant portion of its information technology operations. I haven’t had a chance to really sit down and think through all the implications of the (fairly monumental) shift in strategy, but here are a few first thoughts:

• IBM is obviously back in KP’s good graces. KP and IBM had a very close partnership on KP-CIS. But, after George Halvorson nixed the KP-CIS project in 2002, IBM and KP largely went their separate ways. Aside from legacy Big Iron, Tivoli, and Lotus Notes, KP went from being a huge IBM account to a pretty insignificant one. IBM Services, especially, was pretty much persona non grata in Oakland (and Pleasanton).
• Something like a quarter of IBM’s services workforce is in India. Which means lower costs for IBM and its clients. Lowering costs to help delay a financial meltdown at KP has been a critical mandate for the new leadership at KP-IT. A key component of Phil Fasano’s “plan” has been to outsource to lower costs, and an obvious opportunity to offshore work seems even more financially advantageous, if questionable for a non-profit.
• It’s no secret inside KP that the regions outside California are being undermined by the ridiculous amount of financial waste at KP-IT. (Remember Cynthia Finter?) In the near term, the arrangement with IBM could finally return the regions outside California to a reasonable level of operating financial health.
• Carol Rizzo, in particular, is playing a central role in the IBM relationship. You saw that one coming, right? I’m not clear yet on exactly what Diane Comer’s responsibilities have become, but I imagine she might have something to do with the (re)new(ed) IBM relationship. You saw that one coming, too, right?
• George Halvorson may not have been fond of KP-CIS, but it was nothing if not scalable. That was IBM’s big contribution. Going off with a vendor whose largest integrated install was less than a tenth of KP’s size might have been novel and good publicity for a while, but now IBM has to come in and clean up the mess.
• I don’t doubt their abilities, but IBM knows as well as anyone that KP’s a very bizarre client. For example, insisting on a single data centre for almost all its userbase was a very foolish move on KP’s part, and we knew better. I wonder if IBM might have guaranteed itself broad latitude to make decisions on KP’s behalf, perhaps with even some limited power to overrule the occasional KP ridiculousness?
• No matter the benefits for KP and IBM, this is most significantly a win for Epic. (Yes, I meant to write that.) HealthConnect’s failures aren’t as much the doing of Epic as they were the doing of poor planning and implementation on the part of KP. (Dr. Wiesenthal and Dr. Liang, still want to take credit for that?) IBM can get uptime up to par and help restore a bit of luster to HealthConnect, and a bit of glean to Epic. Plus, it can’t hurt Epic to have the likes of IBM familiarizing itself intimately with their products. Is that a clearing in the clouds over Madison, I see?

Lastly, the murmurs of a first round of layoffs in Pleasanton, at KP-IT headquarters, are not primarily the result of the growing IBM relationship. As HIStalk noted, these were cost cutting measures by sheer job elimination, not cost savings measures by outsourcing (or offshoring). Moving forward, though, I think a big question is whether a primarily California non-profit ought to be shipping hundreds (and eventually thousands) of jobs overseas. (I say no, but KP has been spending millions on offshoring for years, anyway, and nobody’s spoken up yet…)

Stay tuned.

This story was originally posted at justendeal.com.

A year ago this week, Kaiser Permanente was called to task for its practice of rescission, the retroactive termination of health insurance coverage. In many cases, coincidentally, Kaiser Permanente and other insurers will initiate a rescission investigation when someone has just been diagnosed with a serious illness, perhaps a serious and expensive illness.

Now that it’s easy to see why strategic rescission could easily save for-profit health plans millions of dollars, you have to ask yourself: Why would Kaiser Permanente, a not-for-profit plan, have been the first health plan ever ordered to reinstate coverage to a former member for its abhorrent practice of rescission? Better yet, why should a not-for-profit plan ever have been practicing rescission, to begin with, anyway?

Finally, this week, the Department of Managed Health Care and the California Department of Insurance have announced that they will introduce new regulations to try and stop health plans, like Kaiser Permanente, from dumping patients:

The Department of Managed Health Care, which governs health plans known as HMOs, and the Department of Insurance, which supervises insurance companies, said they would propose rules that reinforced existing laws forbidding rescissions except when they could show a policyholder was at fault. It marked the first time the two agencies had acted in concert on any regulations.

Unfortunately, many are saying the new regulations, alone, may not be enough to keep Kaiser Permanente and other health plans in check:

The Foundation for Taxpayer and Consumer Rights had petitioned the agencies for rules against rescissions and said the first draft was disappointing. Spokesman Jerry Flanagan said that to protect consumers, regulators must step in and require that insurers prove policyholder misconduct before allowing a company to carry out a cancellation. “They’ve restated the law here fairly well, but that’s not the point,” Flanagan said. “They are supposed to establish a process for making sure that the cancellations are fair and patients are protected.”

You can read the Foundation’s full response to the proposed regulations here.

Rescission shouldn’t even be a topic of discussion when it comes to Kaiser Permanente. But, George Halvorson has worked to transform Kaiser Permanente into a profit-generating machine, a machine that is not accountable to its physicians or its members. “Kaiser Permanente [has] been hit with [record] six-figure fines for revoking policies,” isn’t a headline a not-for-profit organization should be generating, but sure enough you could have read just that earlier this year in USA Today.

How disappointing.

This story was originally posted at justendeal.com.

In 2003, when Christine Cassel joined the Kaiser Foundation Health Plan Board of Directors, she was also selected to chair the Board’s Quality and Health Improvement Committee. Since she took over, there has been a continuous stream of serious lapses in the quality of clinical care at Kaiser Permanente. Despite significant concerns raised in the media regarding the seriously declining quality of care delivered to Kaiser Permanente members, Dr. Cassel has not publicly announced any sort of investigation into the issues, she has not released any report or plan for improvement, and she has yet to even issue a single public statement regarding any of the reported breakdowns in clinical care.

Earlier this year, we found out that Kaiser Permanente board members are making, on average, at least $124,000 for about 40 hours per year of work. Perhaps Dr. Cassel feels she just doesn’t get paid enough to bother dealing with the concerns of the nearly nine million Kaiser Permanente members she is supposed to be representing?

Dr. Cassel failed to hold Cliff Dodd accountable for questions regarding financial transactions with an outside company which he was also directing. Dr. Cassel failed to hold George Halvorson accountable for issues surrounding his fleecing of a not-for-profit healthcare organization in Minnesota. Dr. Cassel failed on each of these counts. At least she could do something about clinical quality, the one area for which she should care about, the one area which for she is undeniably responsible.

It’s time Dr. Cassel lived up to the responsibilities of her position, instead of just collecting her pay check and leaving Kaiser Permanente members holding the bag. Please consider emailing Dr. Cassel at ccassel@abim.org, or you can call her office directly at 215 446-3528.

This story was originally posted at justendeal.com.

In his latest weekly update, George Halvorson insists Kaiser Permanente has no “glass ceiling.” Mr. Halvorson’s spin couldn’t be further from the truth, sadly. WellPoint and Blue Shield of California both have many more women among their senior executive ranks than Kaiser Permanente. How disappointing that, instead of using his energy to close this gap, George Halvorson is “celebrating” it.

Mr. Halvorson focussed on the fact that two of his top “operations” executives reflect the diversity of Kaiser Permanente. One is a woman. One is an African American man. Sadly, when you zoom out and look at the top twenty-two executives at Kaiser Permanente, the picture isn’t nearly as diverse: that one African American man is the only black officer of Kaiser Permanente. That one woman is joined by only four others, with women making up barely 22% of the top executives at KP, compared to 40% at WellPoint (Blue Cross of California) and 36% at Blue Shield of California.

One more time, that’s an absolutely embarrassing 22% for Kaiser Permanente, versus 40% at WellPoint and 36% at Blue Shield. This is something George Halvorson thinks is worthy of celebration?

Looking elsewhere in the broader insurance industry, Aflac has three talented, successful African American women among its top executive ranks. Kaiser Permanente? Not one.

Kaiser Permanente has a single Latino executive among its senior ranks (and there are even serious ethical concerns surrounding his alleged involvement in political corruption). For an organization with tens of thousands of talented Latino and Latina caregivers, physicians, and managers, how can that be? (See this comment from 2006 for more disappointing information on Latino and Latina diversity at Kaiser Permanente.)

Only one member of senior management at Kaiser Foundation Health Plan is Asian Pacific American.

Sadly, to understand just how seriously George Halvorson considers diversity at Kaiser Permanente, you need only count the number of typographical errors in his latest update. If diversity was truly an issue he took seriously, perhaps he could bother sending out professional, truthful messages.

This isn’t a record to be “celebrating” and spinning. This is a record to be ashamed of. It’s inexcusable, and it’s just one more example of how out of touch George Halvorson is with the employees of Kaiser Permanente.

This story was originally posted at justendeal.com.