Project Themes—The Managed Care Crisis of the 1990s

By the mid-1970s, Kaiser Permanente was the largest pre-paid, group practice health care delivery system in the United States. Given the growth and apparent success of this delivery model, the federal government passed the Health Maintenance Organization Act in 1973. The goal of this act was to support the expansion HMOs into new regions and states. Although it took many years for this expansion to take place, HMOs had become a popular alternative to conventional fee-for-service medicine and indemnity health insurance by the 1980s. On the one hand, this expansion proved the viability of Kaiser Permanente’s model; on the other hand, the increase meant competition from newer, more flexible HMOs. By the 1990s, HMOs—and, more broadly, “managed care” programs—had expanded broadly but they were also beginning to experience massive growing pains. Many for-profit plans, facing pressure from their stockholders, started to ration care; many plan members, fearful of the rationing of health care, started to criticize these plans, sometimes fleeing them for other options. Managed care was in a crisis. Although much different than many of the large, for-profit managed care organizations, Kaiser Permanente found itself swept up the managed care crisis of the 1990s. Many interviews in this project explore the difficulties experienced by Kaiser Permanente in the 1990s and their efforts to overcome those problems by the end of the decade.

Related Interviews

Richard Barnaby
Francis Jay Crosson
Oliver Goldsmith
David Lawrence
Robert Ridgley
Bruce Sams
Jim Vohs
Al Weiland (interview I)