Mark Zemelman: Working at Kaiser Permanente, a Place with a Social Mission https://medium.com/@davidovich/mark-zemelman-working-at-kaiser-permanente-a-place-with-a-social-mission-eea9fef9af07 (via Instapaper)
Mark Zemelman: At Kaiser Permanente, a Place with a Social Mission davidovich Dec 10 · 12 min read This is part II of our profile of Mark Zemelman. Part I: Mark Zemelman: A Mission-Driven Career — covers Mark’s education at UC Santa Cruz and his early efforts as a lawyer working for social justice, civil rights and environmental protection. Mark’s initial experience working for Kaiser Permanente was as outside counsel. Then, he says, “In 1991, when I decided to go in-house, I had a number of clients that I could have called, but I only called Kaiser Permanente.” In a sense, he was returning to a place he already knew. Mark’s father had been an early Kaiser Permanente doctor; Mark was even born in a Kaiser Permanente hospital. He says, “It was a place that I knew well, respected, and it felt to me that it had a purpose. I was looking for a long-term career with a place that had a social mission.” Mark Zemelman, Senior Vice President and General Counsel, Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals. Used with the permission of Kaiser Permanente Heritage Resources. There was no open legal job at Kaiser Permanente, but, Mark explains: “I called them up and said to the general counsel, ‘You know, it will be a lot cheaper if you bring me in than to pay me on the outside,’ and literally a week later, they created a job.” It certainly wasn’t for the money, he explains: “I took a pay cut of 30% to go to Kaiser Permanente. There’s no question I could have made a lot more money working elsewhere.” But it was a choice for the long term, a choice that was true to his ambition to make a difference, inspired and nurtured during his time at UC Santa Cruz. Mark says, “When I was at UC Santa Cruz, what I loved about it was that it was packed to the brim with people who wanted to make the world a better place. And it really didn’t matter which field you were in. Whether it was chemistry, or environmental, or history — whatever — it was simply this ethos, that we were all here to make the world a better place.” “When I was at UC Santa Cruz, what I loved about it was that it was packed to the brim with people who wanted to make the world a better place.” He reflects on those years: “The joy of UC Santa Cruz was that it really was a ‘City on a Hill,’ an opportunity to stand back and figure out what was important. You would stand at the top of the hill at Crown College, and the fog would roll in and you couldn’t see the town of Santa Cruz, and you literally seemed to be in a little city above the clouds — it was magical. It was remarkable to have a few years to be able to think about, ‘How do we make the world a better place?’ And to have a group of professors who were interested in that, and a whole lot of students who were interested in that.” Crown College, UC Santa Cruz. Photo by sspfeifer. It’s a powerful testimony to the ethics and values that flourish at UC Santa Cruz to this day. Now employed at Kaiser Permanente, Zemelman had one last adjustment to make in his career development. “I came in as an environmental lawyer and then realized that in a hospital system — in a health care system — being the environmental lawyer is being the guy ‘behind the elephant,’” he chuckles. “It’s necessary work, but it’s nothing that anybody wants to talk about. They just want you to take care of it.” “In a health care system, being the environmental lawyer is being the guy ‘behind the elephant.’ It’s necessary work, but it’s nothing that anybody wants to talk about. They just want you to take care of it.” Mark nonetheless applied himself to his environmental work and established his credibility; then, “After a couple of years, I said to the general counsel, ‘Would you mind if I became a healthcare lawyer?’ He allowed me to hire someone else to come in and handle the environmental work, and I began doing healthcare transactions.” With that last shift, once again Mark’s humanities training at UC Santa Cruz came to the fore and helped unite his diverse social and political interests into a focused new role: “Having studied history is helpful when you are a lawyer,” he asserts. “It’s particularly helpful when you are a part of an organization that has a mission. That mission is built into old historical IRS (Internal Revenue Service) documents that are as valid today as they were when they were written.” ““Having studied history is helpful when you are a lawyer. It’s particularly helpful when you are a part of an organization that has a mission. That mission is built into old historical IRS documents that are as valid today as they were when they were written.” We then settle in for Mark’s fascinating and well-rehearsed narrative on the history of this immense and influential organization — which provides health care to more than 12 million people — from the point of view not only of a lawyer, but a trained historian. The True Origins of Prepaid, Group Practice Medical Care in America He begins by setting the record straight on the origins of the organization, which have been lost somewhat in legend. He says, “When I came into Kaiser Permanente, the mythology was that Sidney R. Garfield, M.D., and Henry J. Kaiser invented the concept of ‘prepaid, group practice medicine’; that is, the health maintenance organization, or HMO. That Dr. Garfield’s hospital in the California desert, providing medical care to workers on the Colorado River aqueduct, was successful in innovative ways.” It really didn’t happen that way; rather, “The truth is that Kaiser Permanente was part of a movement that arose out of a social need: the fact that most people could not afford decent healthcare.” Now, Zemelman brings all the aspects and experiences of his studies and his career together in a unified summary: “We here at Kaiser Permanente are part of a movement, very similar to the civil rights movement. It’s a movement that started in the 1800s, when few people could afford healthcare, and groups of people — many different groups of people — began trying to figure out how to make healthcare affordable.” “We here at Kaiser Permanente are part of a movement, very similar to the civil rights movement. It’s a movement that started in the 1800s, when … many different groups of people began trying to figure out how to make healthcare affordable.” A Comprehensive Plan for Medical Care … From 1932 To set the context, Zemelman takes us back to the late nineteenth century, before healthcare insurance companies had been formed, and most people found it difficult to afford physician and hospital care. “The groups tackling this problem realized that, first: if you just pay doctors on a fee-for-service basis, most people won’t be able to afford care at the time they need the care. You need to set up some form of prepayment. Immigrant groups, and some large companies, began to put physicians on salary to provide care for all of their members or employees. In this way, salary is a form of prepayment. “If you just pay doctors on a fee-for-service basis, most people won’t be able to afford care at the time they need the care. You need to set up some form of prepayment.” “Second, some physicians realized that high-quality medical practice doesn’t happen when doctors work alone; they work much better in groups. So you get group practices developing — on one side with the Mayo Clinic and the Cleveland Clinic, and on the other side with the Grange, cooperatives, and immigrant communities developing systems such as the French Hospital system in San Francisco, where they created a prepaid financing and hospitalization plan.” He adds that Kaiser Permanente bought French Hospital in the 1990s, and grandfathered the members of that plan into Kaiser Permanente. Zemelman expands his story of this often misunderstood legacy, and continues his narrative: “The conceptual model for the HMO comes from the 1920s, when providing adequate and affordable health care became a major concern for economists and business leaders — so much so that a national commission was formed to perform a lengthy study of the U.S. medical industry.” The commission, known as the Committee on the Costs of Medical Care, was chaired by Dr. Ray Lyman Wilbur, the president of Stanford University, founder of the Stanford School of Business and former president of the American Medical Association (AMA), who together with a team of the top four dozen health experts in the country explored ways to make American health care better and more affordable. Over five years, they issued a series of reports that deeply examined many aspects of medical care in the U.S. Ray Lyman Wilbur, President of Stanford University, former president of the American Medical Association (AMA), and chairman of the commission that created the series of reports on Medical Care for the American People. In 1932, the commission issued a final report, called Medical Care for the American People. Mark reaches back, points behind him and says, “I’m the only person I know who has a copy — on that shelf over there. It took me ages to find it.” And he explains, “That report explained that everything about our health care system is wrong! It all has to be changed. The health care system needs to move away from individual physician offices to group practice, it needs to move away from fee-for-service to pre-payment, it needs to emphasize preventive care, and it needs to move to coordination among facilities.’” “That report explained that everything about our health care system is wrong! It all has to be changed.” The consequences of the study won’t come as a shock to anyone who is familiar with our current heath care challenges. Mark says, “The [President Franklin D.] Roosevelt administration attempted to incorporate the concepts of that report into a health care program for the United States as part of the new Social Security system.” Oregon Governor Charles Sprague, Henry J. Kaiser, Edgar F. Kaiser (son), and President Franklin D. Roosevelt at the Kaiser Oregon shipyard, St. Johns, Oregon, September 23, 1942, for the launching of the Liberty-class S.S. Joseph N. Teal — a ship built in only 10 days. Used with the permission of Kaiser Permanente Heritage Resources. But the efforts were opposed by the American Medical Association, the most powerful medical lobby in the country at the time, which advocated for single (or small group) physician practice, and “fee-for-service” (such that patients pay for each instance of treatment.) And that rejection contributed to the decades-long delay in creating a healthcare system that: is designed to keep people healthy, instead of just providing care when people are sick; and comprehensive in its coverage, high-quality, and affordable. Mark says, “So, by the time Dr. Garfield goes into practice, the Costs of Medical Care Committee’s Report already is out, and the basic concepts of prepaid group practice medicine are in active discussion at a national level. In fact, the first secular prepaid group practice model akin to Kaiser Permanente had started in Los Angeles in 1929: The Ross-Loos system, which served the Los Angeles Department of Water and Power. It wasn’t located that far from where Dr. Garfield was working on the aqueduct.” Mark then further expands on the story with rich historical detail — which he recites without notes (much like Prof. William Hitchcock lecturing on the Greeks and Romans at Crown College in the 1970s). He continues, “The other point is that, in terms of experiencing prepaid group practice, Sid didn’t start at the aqueduct; the experience really began with a group of physicians coming together in their residencies at Los Angeles County General Hospital. When Dr. Garfield came out of school, he went to L.A. General to do his internship and residency. In those days, L.A. General was a progressive experiment. At the time, it was a new, 800-bed building and highly subsidized by the County of Los Angeles, so that everyday people could get hospital care. So, here is a group of young doctors, and they are on salary. They don’t have to be paid by the patients at the time they are providing treatment. In effect, these young doctors are engaged in prepaid group practice medicine. It’s after that that Sid goes out to the aqueduct; he had already experienced the model.” So the prepaid group practice model was already established conceptually and practically; it worked for the patients, and it was satisfying to these young physicians. At the Grand Coulee dam construction site, and then in World War II at Kaiser’s shipyards, Dr. Garfield — financed by Kaiser — brought his friends from L.A. General into an industrial form of prepaid group practice. Mark summarizes, “The conceptualization of it had already been done by the President of Stanford; the experience of working as a group of salaried physicians had already occurred. Ross-Loos was already in existence. But prepaid group practice medicine hadn’t been done on a massive, industrial scale. When Henry J. Kaiser gets the Liberty Ship contract, now you are bringing in 200,000 people to work in the shipyards. Suddenly, you have the largest prepaid, group practice system in the country.” “When Henry J. Kaiser gets the Liberty Ship contract, now you are bringing in 200,000 people to work in the shipyards. Suddenly, you have the largest prepaid, group practice system in the country.” With that, Zemelman sits back to let the story — the real story — and its significance, sink in. It wasn’t just one innovative doctor and an industrialist who invented the HMO. It was a movement that had been developed by immigrants, academics, local governments, idealistic physicians, and progressive business leaders. They had conceptualized it through years of study and tried it on a smaller scale, so when they needed to expand it to cover hundreds of thousands of workers, they knew it would work. Then, in 1945, at the request of workers now scattering to post-war industries along the West Coast, Kaiser Permanente opened as a public plan. In addition to overcoming direct attacks by the traditional medical industry on the new plan, Kaiser Permanente was a leader in the broader national struggle for affordable, high-quality care. The Ongoing Struggle for Affordable, Quality Medical Care Mark continues, “In the 1960s, Congress created Medicare and Medicaid — the Kaiser Permanente founders were deeply involved in that. Then there was the passage of the Health Maintenance Organization Act of 1973. The HMO Act was written on a desk that looks like this one,” Mark raps on his desk with his knuckle, “that is upstairs on the 27th floor of this building. My predecessor, Scott Fleming, went to Washington to help develop the HMO Act. And then you get to the Affordable Care Act of 2010, which Kaiser Permanente has actively defended.” “The HMO Act was written on a desk that looks like this one,” Mark raps on his desk with his knuckle, “that is upstairs on the 27th floor of this building.” These are the primary achievements in health legislation in the United States over the past 75 years. Nonetheless, the need for Kaiser Permanente’s leadership is greater than ever. Mark explains, “This year, the total cost of a standard, employer-based, comprehensive health care plan in the United States for a family of four exceeded $28,000. The median family income in the United States is $60,000. And medical inflation is running 5% per year. The system is not affordable or sustainable. Fee-for-service is still the dominant form of payment of providers in the nation. The current healthcare system continues to be fractured, not coordinated like Kaiser Permanente.” ““This year, the total cost of a standard, employer-based, comprehensive health care plan in the United States for a family of four exceeded $28,000. The median family income in the United States is $60,000. And medical inflation is running 5% per year. The system is not affordable or sustainable.” It’s a grim reality, but understanding how we got here, and why, is essential if we are to find a comprehensive and meaningful path forward. Zemelman’s contribution has been not only his legal expertise, but a historian’s perspective on the past, which has allowed him to open up and explore the entire story, to help us fully understand and evaluate where we have come from, and then decide where we want to go. It’s time for us to leave, so Cari and I thank Zemelman for his time and remarkable narrative. We walk towards the elevators, once again passing the extraordinary photographs on the wall — reminders of a time when urgent necessity, combined with insight, determination and lessons learned over time, brought together a remarkable group of medical practitioners and business people who created something new and promising, and which is with us still today, and continues to serve as America’s largest nonprofit health system. This profile is the sixth in our series Beyond the Forest, which examines the lives and careers of UC Santa Cruz grads who have found their unique career paths using the humanities as their foundation. 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