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Dated, a charge will be made for services rendered. Such charge shall in no event exceed two-thirds the charge above specified for obstetrical care. Removal of ton-sils and adenoids

Physicians and surgeons
Hospital care

Drugs and medicines while hospitalized
All services provided at a total charge of $35.
Emergency care for accidental injury outside service area

Necessary hospital care including all hospital services
Drugs and medicines while hospitalized
X-ray and laboratory work
Doctor's care

Necessary ambulance service when authorized When a member is accidentally injured, at a point more than 30 miles from the nearest authorized medical office or hospital, up to $250 will be allowed for services necessary before his medical condition permits travel to nearest medical office or hospital where Health Plan service is available. Such allowance will be on the basis of rates recommended by the California Medical Association for use by the Industrial Accident Commission of the State of California. Polio care

Treatment and rehabilitation of poiio cases following the contagious and acute stage will be provided up to a maximum period of 1 year or a maximum value of $2,500 at the California Rehabilitation Center at Vallejo or Santa Monica, Calif.


1. Applications for membership may be secured at the offices or hospitals listed, or by phoning the Kaiser Foundation Health Plan office.

2. Application and medical review forms should be mailed to the Kaiser Foundation Health Plan. Applications will not be accepted without the required registration and medical review fees.

3. Applications for individual membership are subject to medical review before acceptance. A qualifying physical examination is usually required. A registration and medical review fee of $5 for an individual applicant, or $7.50 for applicant and family, is payable in advance. Of these amounts, the registration fees will be refunded if aplicants are not accepted for membership.

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4. Applications for individual membership will not be accepted from persons over 60 years of age. The Permanente Health Plan accepts applicants over 60 only through group membership.

5. After acceptance into the plan, new members are required to pay 3 months' dues in advance before their membership is in force. Thereafter, dues may be paid monthly or quarterly.

Monthly membership fees
Subscriber only --
Subscriber and 1 family dependent.-
Subscriber and 2 or more family dependents.

$4. 70
8. 00

39087-54-pt. 6—5




Doctors' offices :

Hospitals-Continued Oakland

Richmond Richmond

Vallejo Vallejo

San Francisco Walnut Creek

South San Francisco Pittsburg

Other locations: Concord

Los Angeles Napa

San Pedro San Leandro

Fontana San Francisco

Portland, Oreg. South San Francisco

Vancouver, Wash. Redwood City

Main office: Kaiser Foundation Health Hospitals:

Plan, 280 West MacArthur Blvd., Oakland

Oakland, Calif.


(Sidney R. Garfield, M. D.)? In September 1942, a group of men, high up in an office building overlooking San Francisco Bay, had just finished outlining a plan to meet the serious dearth of facilities and medical services in the bay area created by the mass dislocation of people into wartime shipbuilding. They chose "Permanente" as the name of that plan. It is a Spanish word meaning firmly established-lasting-stable, and the name of an ever-flowing stream in the San Jose hills of California.

It was not by chance that these trustees could formulate and put into action the complicated mechanisms involved in creating a medical and hospital service practically overnight. For a decade preceding this event (1932-42) they had struggled and worked with the problem of bringing the best possible medical and hospital care to average workers at a cost they could afford. By study. ing the work and mistakes of others, by trial and error on several projects in divergent areas of the country, they had evolved a set of principles that worked.

The first widespread application of this plan came about in this fashion. The result was an extermely impressive demonstration of its effectiveness, and probably the most outstanding wartime medical service outside of the armed services.

At the end of war in 1945, shipbuilding was discontinued and the shipworkers dispersed throughout the country. From the relatively few remaining, however, arose an insistent demand sufficient to warrant continuation of the health plan on a community basis. Today, 6 years later, Permanente serves 250.000 members in California, Oregon, and Washington, as well as countless numbers of others in these areas. The steady growth (after end of war) of the Permanente Health Plan has been gratifying, and certainly indicates public acceptance. In fact, more rapid growth is limited only by ability to secure facili. ties and physicians fast enough to keep up with public demand. It is important to realize this growth was accomplished mainly of its own impetus, since active solicitation was carefully avoided.

In addition to the membership shown on the graph for the bay area, there are at present approximately 50,000 members in southern California, and 25.000 in the Portland-Vancouver area. It is anticipated that the new medical centers being constructed will enable the membership to be increased from an overall figure of 250,000 to 400,000.


The effectiveness of the Permanente plan is relatively simple to understand. Early in the developmental decade (1932–13), it became increasingly evident that much of the high cost of medical care was due to waste resulting from poorly planned facilities, insufficient coordination between physicians and institutions in which they worked, and between physician and physician. The simple solution was to bring the physicians into coordinated group practice, operating in medical centers and hospitals geared to serve them efficiently. This improved quality as well as produced economy. The solution to the problem of ability to pay is a prepayment plan (insurance principle), and the elimination of waste permits the

1 Medical director, the Permanente Foundation, Oakland, Calif.

prepaid dollar to do the necessary, comprehensive medical job. Finally, it is necessary to have these prepaid funds go directly to the physicians and hospitals, abolishing fee for service. This results in a reversal of the usual economics of medicine. The well person becomes an asset to the hospital and doctor--the sick person a liability, thus heralding the preventive medicine of the future.


















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1947 1948 1949 1950 1951 1952

Years Wanuary and July) GRAPB 1.—Total Membership, Bay Area Permanente Health Plan, January 1943 Through

January 1952. In spring 1945, the Richmond shipyards began to close. In the next 10 months 53,000 health-plan members were discharged from shipyard employment. As a result, the healthplan membership reached its lowest point (14,500) in October 1945. At this time the plan was extended to other bay area residents. By December 1946 there were no longer any shipyard plan members. Present bay area membership includes the San Francisco, Oakland, Richmond, and Vallejo areas.

The Permanente concept of a medical care program includes all of the elements comprising medical care today--physicians, nurses and auxiliary help, hospitals and medical centers. It includes teaching and training of nurses and doctors, and also provides for research and charity. In this completeness and integration, it stands alone among the health plans in this country, being the only one providing all these services.

ORGANIZATIONAL FORM Simply stated, the Permanente system is composed of four separate but coordiDated organizations :

1. Permanente Foundation 2. Permanente Health Plan

3. Permanente Hospitals

4. Permanente Medical Group 1. Permanente Foundation is a charitable trust which provides facilities and funds for teaching, training, research, and charity.

2. Permanente Health Plan is a nonprofit trust. Its function is to enroll members, collect funds, and keep records of eligibility. The funds collected by Permanente Health Plan are divided proportionately between the hospitals and medical groups, less the necessary administrative expense of Permanente Health Plan,

3. Permanente Hospitals is a nonprofit corporation which operates the hospitals and medical centers in the same fashion as any hospital is operated. It secures its income from two sources, a substantial portion from Permanente Health Plan's prepaid dues and a variable amount from private patents of Permanente doctors and other physicians in the area.

4. Permanente Medical Groups. These are independent groups of physicians organized as partnerships, each group covering a regional service area. These partnerships are as ideal as possible in their interphysician relationships, aims and incentives—eligibility for partnership being 3 years of service with the organization. The incomes of doctors compare favorably with those of privately practicing physicians in the same area.


The achievements of Permanente in this field are very striking. Beginning in October of 1942 with a modest little hospital of 80 beds in Oakland costing $300,000, there has been a rapid growth of unit after unit, till today Permanente has 6 hospitals (medical centers) in operation with a total bed capacity of 1,090 "general” beds. Three more are in construction, adding 520 beds to this number, and there are on the architects' board 4 more small ones that will add 200 more beds. In addition to these 1,810 beds in medical centers, the Permanente organization includes 2 rehabilitation institutions with 275 "rehabilitation" beds, as well as a hospital and clinic developed for several industrial plants in Utah.

The growth of facilities made possible achievement in another field—that of hospital and medical center designs. The Kaiser Permanente Hospitals now under construction in Los Angeles and San Francisco present many new ideas in hospital construction. Each unit has approximataely 225 beds, and the 2 hospitals together will cost $6 million.

By routing the public through outside corridors, an entirely new concept of hospital service is made possible. Rather than using the usual central corridor, which creates a traffic problem, the public enters the patients' rooms through sliding glass doors from the outer corridors running along 2 sides of each floor. Both walls of the outside corridors are glass from floor to ceiling, affording an "outdoor” environment. Drapes operated by electric motor from the patient's bedside afford complete privacy during visiting hours.

2 Note: This is the ultimate organizational form of all permanente Medical groups. all of them have reached this form and there are some experimental variations.


TABLE 1.-Permanente hospitals, clinics, and rehabilitation centers

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The usual public central corridor on each floor will be restricted to physicians, nurses, and employees. It will include decentralized nurses' stations and utility rooms. Drugs, medications, X-rays, treatment materials, instruments, linens, charts, etc., for each patient will be kept at stations just outside the patient's room. Each station will be devoted to eight beds, decreasing nurses' walking to one-seventh that required under conventional floor plans. Eliminating the public from this area and decentralizing nurses' stations provides more efficient service, allows closer observation of the patient, and permits the attending physician to determine at a glance the patient's condition and treatment.

There will be a control station on each floor for a supervisor, who has direct vision of all personnel on the floor. These stations will control and route visitors down the outside corridors. The supervisor also will handle incoming and outgoing requisitions via conveyors and mail chutes, which are so planned as to serve each point for transportation of material-storeroom, pharmacy, laboratory, record room, business offices, and central supply. Requested materials are delivered automatically. The control station will be connected with each nursing unit by intercommunication systems.

The obstetrical floor will have a built-in sound-proofed nursery behind each bed with a bassinet that is pulled through the wall separating the nursery and the mother's bed. When the bassinet is pushed back into the nursery, an automatic signal light notifies the nurse. A viewing window in the mother's room permits visitors to observe the baby in the nursery without danger to the infant. This plan caters to the principle of having the mother and baby together as much as possible for practical and psychological reasons.

The two top floors of the hospital are planned for hotel type service for convalescent patients. As soon as patients become ambulatory, they will move to the hotel rooms where, in pleasant surroundings, they will finish out their stay. Such patients may eat in a buffet-style dining room, sleep late in the morning, participate in social recreation, watch television programs, and the like.

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