The Rise and Fall of a Kaiser Permanente Expansion Region

December 2003 | Daniel P. Gitterman, Bryan J. Weiner, Marisa Elena Domino, Aaron N. McKethan, Alain C. Enthoven

Prepaid group practice (PGP), once viewed as a cost-effective and efficient model for health care financing and delivery, has fared poorly over the past two decades. This article offers a brief history and analysis of a Kaiser Permanente (KP) regional expansion. It identifies the political, economic, and organizational factors that impeded KP’s establishment of a prepaid group practice. Using participant interviews and available enrollment and financial data, the article examines the key events in KP’s entry and start-up, performance and growth over time, and final divestiture. It concludes that KP’s failed North Carolina expansion resulted not from an inherent flaw in the PGP model but from the interdependence of political, economic, and organizational forces. Finally, the article offers some policy recommendations for PGPs’ future reform efforts.

Author(s): Daniel P. Gitterman; Bryan J. Weiner; Marisa Elena Domino; Aaron N. McKethan; Alain C. Enthoven

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Volume 81, Issue 4 (pages 567–601)
DOI: 10.1046/j.0887-378X.2003.00295.x
Published in 2003