Kaiser Permanente

The closure of a North Hollywood hospital and possible shutdown of a second medical center nearby will lengthen ambulance rides by at least three to five minutes for some patients and increase pressure on emergency rooms at other hospitals in the Valley, county emergency officials said Friday. The prediction comes a day after North Hollywood Medical Center announced it would shut its doors in August, closing an emergency room that currently handles about 450 ambulance patients every month.

One San Fernando Valley hospital will close, and the owners of another are considering shutting down, pushed by new earthquake repair laws and continued changes in the health-care system. North Hollywood Medical Center--which employs 250 people and runs a full-time emergency room--will close, its for-profit owner, Tenet HealthSystem, announced Thursday.

Reflecting a deepening split among health insurers, Kaiser Permanente, the nation's largest HMO, said Friday that it won't pay for the male impotence drug Viagra because its unprecedented popularity would make the coverage too expensive. Kaiser also said it will cancel its existing coverage of other, less widely used therapies for treating erectile dysfunction.

Citing a surge in membership, Kaiser Permanente said Thursday that it will open part of a Baldwin Park hospital that has stood empty since it was built in 1994 as a showcase for the HMO. The decision to open the hospital this fall reverses a 1996 announcement that Kaiser would turn over the facility to a Catholic-owned hospital chain, San Francisco-based Catholic Healthcare West. A Kaiser spokesman said the group voluntarily withdrew from the project.

Citing its own miscues and continued distress in the managed-care industry, Kaiser Permanente on Friday reported a startling $270-million loss for 1997, the first time that the pioneering HMO has lost money in its half-century history. Kaiser said it will have to raise premiums for next year and take other steps to remedy its financial condition. While a Kaiser loss had been expected, the magnitude was more than five times the firm's own projections and caught industry watchers off guard.

Kaiser Permanente Group, the nation's largest health-maintenance organization, cut its chief executive's compensation after the company reported its first loss. CEO David Lawrence said he won't receive a bonus this year because his Oakland-based nonprofit HMO lost $270 million in 1997 as it failed to raise premiums in sync with rising costs. He declined to say how much his pay was cut. In 1996, Lawrence earned $1.22 million, according to state regulatory filings.

In a strongly worded rebuke, the California Public Employees' Retirement System on Tuesday called Kaiser Permanente's demand for a 12.6% rate hike "outrageous." At the same time, CalPERS, the nation's second-largest purchaser of health benefits after the federal government, said it approved an average 5% increase in medical premiums with nine other health maintenance organizations for 1999.

Signaling a sharp acceleration of health care costs across the industry, Kaiser Permanente, the nation's biggest HMO, confirmed Tuesday that it plans to seek double-digit increases in health insurance rates in California. Kaiser said some small businesses will see their rates rise 11% this year. An industry group quickly warned that a big rise in medical premiums would force some small businesses to drop health coverage for workers and their families.

A California program that provides health insurance for small businesses has granted Kaiser Permanente--the state's biggest HMO--a rate hike of up to 14% next year while negotiating more modest increases with many other health plans. Employers statewide are bracing for the largest medical premium hikes since about 1993. The increases will be felt throughout the economy, experts said, and the rate hikes for small businesses could result in some employers dropping coverage for their workers.

Kaiser Permanente, the No. 1 U.S. health maintenance organization, gave its chief executive a 16% pay raise last year as the Oakland-based HMO posted a $266-million loss, its first ever. CEO David Lawrence received total compensation of $1.4 million in 1997, up from $1.2 million the previous year, according to the nonprofit organization's annual federal regulatory filing, which the HMO released this week.