blog.fixkp.org

Chuck Prince, chief executive of Citigroup since 2003, has resigned. Prince is being temporarily replaced as Citi chairman by Bob Rubin, who was Treasury Secretary for most of the Clinton years. Win Bischoff also will serve as interim chief executive.

The country club of bad former chief executive officers is growing. Now that Chuck Prince and Stan O’Neal are out, I’m thinking there are still a few men left to join the ex-CEO party…

That’s: Jim Cayne (Bear Stearns), Angelo Mozilo (Countrywide), Todd Farha (WellCare), and George Halvorson (Kaiser Permanente).

Good luck, gentlemen.

This story was originally posted at justendeal.com.

I’m going to get to George Halvorson being one of the eight seven chief executives “honored” by a so-called “Diversity Best Practices” company in just a minute. Before I do, you should know that Kaiser Permanente is expected to report its third quarter financial results this week, and the picture is not looking good. Apparently Mr. Halvorson is beginning to run out of ways to prop up the organization’s ailing finances, and my understanding is that the Kaiser Foundation Health Plan Board of Directors is becoming more and more restless. Is the reality that their individual reputations are at stake beginning to set in and prod them into having some level of fiduciary loyalty and responsibility to Kaiser Permanente? We shall see, soon…

Back to the “news” that Kaiser Permanente is desperately trying to get any news outlet (anyone, anywhere?) to pick up: George Halvorson was one of eight seven chief executive officers “honored” as a “leader” for “diversity” by a for-profit company called “Diversity Best Practices”. You might be surprised to learn that “Diversity Best Practices” is owned by a company managed by eight white men. Go figure.

The more interesting news is that Kaiser Permanente was promoting Mr. Halvorson as one of “eight” chief executives to be honored right up to Friday. Apparently, the memo was delivered late to Oakland: at the last minute, the eighth chief executive’s “award” was revoked, leaving only seven remaining. (Here’s the corrected press release.)

That’s because that eighth chief executive, Stan O’Neal of Merrill Lynch, was fired last week for incompetence, and amid growing accusations of corruption.

Great company Mr. Halvorson keeps, no?

If that isn’t enough to make you question the integrity of this so-called “prestigious” award, this better be: the chief executives to be “honored” are “selected…based on an extensive application completed by each company.” That’s it. If Mr. Halvorson says Kaiser Permanente is promoting diversity, and is convincing enough with a bit of spun statistics, he gets honored. That, oh, and he has to “become a member” and write a big, big check from Kaiser Permanente’s bank account payable to “Diversity Best Practice”…

If George Halvorson actually shared some legitimate commitment to diversity, perhaps this “honor” would be a bit more “honorable.” But, the fact is, George Halvorson has a horrible track record on promoting diversity among the executive ranks at Kaiser Permanente.

So, let’s compare that eighth chief executive, Stan O’Neal, (the no longer “honored” one) and Mr. Halvorson, shall we?

Dishonoring Diversity: Halvorson and O’Neal

To understand just how laughable this award is, you need just go back a few months to a quote given by one of Stan O’Neal’s top lieutenants: “We’re not where I want us to be [on diversity], we’re not where Stan wants us to be or where Merrill Lynch wants to be.” I see. Perhaps “Diversity Best Practices,” the for-profit company that gives out the “award,” perhaps they decided that admitting the problem is the first step to fixing the problem? So, by extension, perhaps George Halvorson talking so much about diversity (but doing very little to actually promote it within his own organization) actually counts for a lot? Who knows.

So here’s to Mr. Halvorson and his band of eight seven brothers (yes, all seven are men, and six of them are white). Congratulations on your much deserved “honor.”

This story was originally posted at justendeal.com.

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.