Kaiser Permanente gets OK to build $285 million Tanasbourne hospital

New medical center would be first in the region in nearly 30 years

A rendering shows the proposed 380,000-square-foot Kaiser Permanente hospital that will be constructed in the Tanasbourne area.

Oregon’s Department of Human Services gave the green light Wednesday to Kaiser Permanente’s plan for a $285 million, 138-bed hospital in the Tanasbourne area.

The state agency approved Kaiser’s application to construct the 380,000-square-foot medical center, which will be the first new Portland-area hospital in nearly three decades.

“We are happy that Oregon officials agree with us about the need for more hospital beds in Washington County,” said Larry Wheeler, vice president of communications and external affairs for Kaiser Permanente’s Northwest Region. “Our membership there has grown by more than 60 percent in the last decade. We look forward to serving our growing membership, and to providing emergency care to all people in the community.”

In addition to the patient rooms, the facility will house surgical suites, an intensive care unit, an emergency department, a labor and delivery unit, imaging and laboratory services and a pharmacy.

The hospital is scheduled to open in 2011, along with an adjacent specialty care medical office and outpatient surgery center.

Wheeler said that Kaiser Permanente was committed to continuing charity care and providing health coverage for the uninsured in Washington County.

“We plan to continue our support of agencies serving the poor and vulnerable, such as the Essential Health Clinic, Virginia Garcia Memorial Health Center, Community Action and others,” he said.

Representatives from many of the organizations publicly supported the new medical center, as have county business and government leaders.

“We welcome this decision and look forward to offering better access and more local health care choices for the workers and residents of Hillsboro and the neighboring communities,” said Jonathan Schlueter, executive director of the Westside Economic Alliance.

Schlueter was one of a half-dozen people who testified in favor of the project at a public hearing in early December.

In Oregon, any organization that wants to build a new hospital must submit a certificate of need application to the state Department of Human Services. Kaiser Permanente submitted its application in 2005 and received approval Wednesday.

Kaiser Permanente’s only other Portland-area hospital is the Kaiser Sunnyside Medical Center in Clackamas. That facility has 196 beds and is adding a 200,000-square-foot patient care wing.

More than 485,000 people in Oregon and Southwest Washington receive their health care from Kaiser Permanente.

Health Insurance Markets

These are the notes I used for my remarks on health care reform at the forum I attended last week:

Health Insurance Markets, by Mark Thoma: In the ten minutes that I have, I’d like to talk about insurance markets. In general, insurance gives us financial protection from unexpected events -- a tree falls on our house, we have a car accident, we become unemployed, we become sick and need health care, and so on. In some cases, the insurance is provided by the private sector, though it’s usually with government oversight, but in other cases the government itself provides the insurance. When the government provides the insurance, we call it social insurance. Social insurance provides individuals or households protection against certain events such as unemployment, poverty during old age, health expenses, and disability. It is distinguished from other insurance by the fact that it is “undertaken, facilitated, or enforced by government as a social policy.”

We might leave all of our insurance needs to the private sector, but unfortunately insurance markets do not always function in a way that provides adequate levels of insurance at the lowest possible price. Economists use the term market failure to describe such instances and there are many reasons markets might fail. For insurance markets, the main problems are called moral hazard and adverse selection. Moral hazard is the tendency for people to engage in riskier behavior when they know they are covered by insurance – when the downside is covered there's no reason to take precautionary behavior. This causes too much risk to be taken raising costs. Fortunately, this class of problems can be addressed, though not completely eliminated, through deductibles, co-payments, and other cost sharing arrangements that cause the insured to pay a penalty when there is a need to use the insurance. But so long as the insurance company pays some share of the costs, some degree of moral hazard is likely to be present.

While moral hazard can be reduced, adverse selection is not as easily overcome. The specific form of adverse selection at work in these markets is asymmetric information. Individuals have much better information about their health histories and likely health outcomes than insurance companies. Because premiums are set based upon the average member of group, some members of the group will need more health care than they pay in premiums and other members will need less. Those who expect to use less health services than it costs based upon knowledge of their likely health outcomes will not get insurance – it doesn’t pay to do so – while those who expect to have higher costs will stay in the market. Then, as the lower expected health care cost people drop out of the market and higher cost people make sure to enter, average costs rise, premiums increase, and this then motivates more people to drop out leading to market failure.

The solutions here are to require people to disclose known conditions at the time they purchase insurance and to fully disclose their health histories to insurance companies, or to mandate that everyone must have coverage thereby preventing anyone from dropping out. This leads to concerns, however. The first is privacy. How much should people be required to tell insurance companies about their personal health histories? How much testing should insurance companies be allowed to do before signing you up? For example, is genetic testing and subsequent exclusion form coverage okay? That brings up the second problem, whether we want to discriminate in terms of the cost of health insurance based upon conditions people are born with, their genetics, or is that a risk that is properly shared across the population since an individual can do nothing to affect the genes they are born with?

There is another problem in these markets that also causes people to drop out and forego coverage. When people believe they will end up in the same general condition whether or not they have insurance, there is no need to purchase protection. If the unemployed believe society will take care of them when they are unemployed if they don’t have insurance, there is no need to purchase private unemployment insurance. If a person believes their retirement will be the same whether or not they save - that the government will not let them live in squalor and will provide the same basic standard of living they would have otherwise, or nearly so, if health care can be obtained whether or not the individual is insured, then there is no incentive to purchase insurance and these markets will fail.

This is one reason social insurance or regulations mandating everyone have insurance can be useful. By forcing everyone to be pooled together and share risks that are out of their personal control and by preventing people from dropping out of the market, the adverse selection problem is reduced and risks are shared broadly, but note that this requires government intervention through regulation, tax incentives, and other policies, or the government provision of insurance, and a societal judgment that these risks ought to be broadly shared.

In recent history, one way we have addressed the adverse selection problem is by purchasing health insurance through our employers. The bigger the group, the lower the costs from reduced administrative costs and other savings. Employer provided health insurance has been encouraged and facilitated by tax-subsidies which have also helped to hold the market together and to convince people who might not buy insurance on the individual market to purchase it through their employer.

Employer-provided health insurance is not a perfect solution to adverse selection – and it is especially imperfect for small employers – but it has presumably helped. More generally, regulation and subsidies can help with the adverse selection problem but, in the real world, they will never completely eliminate the adverse selection problem and will not, therefore, result in universal coverage. The only way to do this is to force people to buy health insurance, which is the approach that Massachusetts is attempting right now.

All markets fail to one degree or another. But that doesn’t automatically imply that the government should step in and try to correct the problem. Government is inefficient. Thus, when government gets involved, it is costly in terms of wasted resources and other problems. But market failures are costly too. These costs need to be balanced – doing nothing brings about the cost of the market failure and stepping in and doing something has the cost of government inefficiency plus whatever residual part of the problem remains after the intervention. Therefore, the government should get involved only if the costs it imposes are smaller than the costs of allowing the market to operate without any intervention. Often this test is not met – markets are not perfect but government interference would be worse – but that is not always the case and there are certainly instances where government intervention can improve the economic outcome.

In general, we can think of two types of solutions to the market failure problem in insurance markets. The first is based in the private sector and it involves the government creating laws and regulations that get the incentives right in these markets, and then letting the markets themselves provide the insurance. In general, given that intervention can be justified due to the presence of a substantial market failure, economists believe in the ability of markets to efficiently allocate resources and when market based solutions are available, they are generally preferred to more heavy handed regulatory structures. But it is not always possible to solve the problems in the private markets through regulation and other policies to create the right incentives, and in these cases the second type of solution, the government provision of the good, is the most efficient way to provide the good or service.

Do health markets suffer from substantial market failure? My assessment of these markets says the answer is yes and, in particular, the most difficult problem to solve, adverse selection, is the most serious problem plaguing these markets. My preferred solution is a universal coverage single-payer system, but there is room for disagreement on this. In any case, solving these problems will require us to choose between two courses of action, solutions such as Health Savings Accounts which reside in the private sector but are guided by a regulatory structure that attempts to create incentives for both providers and consumers of health care to behave optimally, and solutions such as expanding Medicare nationally into a single-payer system. For me the choice is not ideological, it is not Democrats versus Republicans or free marketeers versus advocates of the welfare sate, but rather it is a matter of economics. It comes down to which type of solution is likely to produce the most desirable outcome from a social policy perspective.

To summarize, let me emphasize the difficult tradeoffs we face. In the context of health insurance, there is no perfect solution that will solve all of the problems in these markets. We will have to make choices and there will always be trade-offs. If we have a private sector based system with wide and generous insurance coverage with small out of pocket expenses, there will always be moral hazard and the higher insurance costs that come with it. If we have a single payer system, there will always be problems arising from the government setting prices different from their optimal values leading to misdirected resources and other inefficiencies. If you don't want the government involved at all, you will have to accept that some segments of the population will go uninsured. There is no way to have it all. Instead, the question is which type of system is likely to produce the outcome most consistent with our social policy objectives.

Free Insurance Leads Can Cost you a Bundle

Back in the 1970s when I first got into the insurance business, the natural order of things was to get your insurance license and go to work for a general agent. The GA's job, in exchange for a cut of your commissions, was to give you products, a selling system, motivation, and free insurance leads.

Today the model is different. You get your license and automatically become a general agent earning full street-level commissions. You then partner with an insurance marketing organization for product representation, selling systems, and (the number one reason agents choose a particular marketing organization) free insurance leads.

But if a handful of free insurance leads is all your new partner has to offer, how much are they really costing you?

If you are a career conscious agent, you will look beyond the immediate gratification and false hopes of free insurance leads. You will understand the gimmick of a prize inside the Cracker Jack box. You will focus on the greater need for effective, ongoing prospecting systems, progressive selling systems, motivational and educational coaching, and cutting-edge products, long after your free insurance leads have evaporated.

Here are the five most important questions to ask an insurance marketing organization before hitching your career to their carriers:

1. How long have you been in business?

Many newcomers to the FMO, IMO, NMO arena lack seasoning. Many hope to test their leads and selling systems on inexperienced agents. A track record of 10 to 20 years is good, 30 to 40 years even better.

2. Which carriers do you represent and how do they rate with the rest of the industry?

A marketing organization with a dozen or more carriers usually indicates a lack of focus. Three or four of the industry's top carriers is an ideal mix.

3. Why should I believe your free insurance leads are any good?

Ask what criteria they use in selecting the leads. Do they fit the profile of people who already own the insurance product you are selling? They should.

4. What kind of support do you have to help me grow my business and stay competitive?

The best marketing organizations will give you your own insurance coach for help with case design, product training and marketing support. Expect online systems for checking new business, commissions and existing policy status, and for downloading current forms, sales scripts and marketing materials. Invariably, just having your own coach can make a huge difference in your success.

5. What prospecting and selling systems do you have and how do I get them?

Most marketing organizations have the usual direct mail lead systems. Many require you to pay costs up front then seek reimbursement through your production. The best direct mail lead program is one that replenishes your lead supply at no cost to you, with each sale you make, giving you a never-ending stream of qualified prospects.

Most marketing organizations have standard selling systems ranging from flip charts to client approved CD-ROMs. Unfortunately, few organizations understand how important the "M" is in FMO, IMO or NMO, and have not sprouted a new marketing idea in decades. Meanwhile the prospect pool grows wary of the same old ploys.

But imagine an insurance marketing organization that will:

(A) Ghostwrite newspaper articles for you to publish as expert author in your hometown newspapers. You include your bio, photo and contact information for lead generation and referral.

(B) Produce your own half-hour radio talk show with you being interviewed as guest expert in your insurance field, for airing on your local radio stations. You position yourself as the expert, you pre-sell the concept, and you offer your phone number for listeners to call for additional information or your free offer.

(C) Produce your own half-hour cable TV infomercial in an interview format with you as the guest expert for airing on your local cable TV channels. You position yourself as the local expert, you break the ice by showing prospects the real you in the comfort of their own living room, you pre-sell your insurance concept, and give out your phone number for viewers to call for additional help or your free offer.

(D) Give you an original, fully scripted, turn-key seminar system complete with ongoing coaching, handouts, PowerPoint slides and multi-media, and a proven formula for setting appointments with 70% to 80% of the room. The multi-media content alone has produced over $1.3 billion in sales and is still going strong.

A marketing organization that will do all of the above for you, absolutely free of charge based on production, can catapult your career to the next level. The organizations that offer free insurance leads, with little else down the road, can end up costing you a bundle in lost opportunity. Please call me for more details.

Earthquake Insurance in the Northwest

Here in the Northwest Earthquake Insurance is one of the most important types of Insurance to add to your Homeowner’s Policy...and yet it is also the most forgotten about. Thinking about Earthquake Insurance requires preparing for the worst, and yet as humans we tend to hold the mind set, “Oh that would never happen to me!” However, looking at where we are located here in Washington state we have to be aware that it very well could happen to us. The question we really need to ask ourselves is, “if it happened could I afford to replace my home?” Most of us would have to answer “No.” In light of this it is extremely important to have Earthquake Insurance.

Earthquake Insurance can be added as an endorsement to your existing policies, or it can be purchased as a stand-alone policy. There are certain underwriting guidelines when purchasing one of these policies. These guidelines are:

* What year was home built?
* Type of foundation?
* Type of construction; frame or masonry?
* Approximate distance to water?
* Is the home located on a steep bank?

Many insurance companies in the State of Washington no longer offer Earthquake Insurance. Consumers may not even be aware that their insurance company is no longer offering this coverage. It is important to call your current insurance company and specifically ask them if they carry Earthquake Insurance.

At Eagle Harbor Insurance we have several different markets that provide Earthquake Insurance, and we will work with you to find the type of coverage you need.

Homeowner insurance rates to rise by 25 percent on N.C. coast

RALEIGH, N.C. - Homeowner insurance premiums will rise by 25 percent along the coast this year as a result of the rising cost of homes, higher repair costs and a recent history of severe damage from storms, state Insurance Commissioner Jim Long said.

The new rates, which take effect May 1, are the result of a settlement between the insurance industry and the state Department of Insurance.

The average premium increase on home insurance statewide is 5.4 percent, far below the 21.9 percent jump sought by insurers. Rates are set by region, based on the number and type of claims and repair costs in each area.

Those who rent out their beach houses will have to cover the higher insurance costs, said Alan Holden, who owns a property management company and RE/MAX at the Beach in Holden Beach.

"The owners are going to pass it on," he said. "I'm in shock by such an increase. Having just gone through a recent increase, it makes you wonder where it is going to stop."

The last rate increase was in 2005, when rates along the coast jumped 15 percent.

The last storm to hit the coast was Hurricane Ophelia in 2005, which caused more than $40 million dollars in damage.

Parents pay for kids' insurance claims

Teenagers who wear the latest designer fads or listen to brand new MP3 players are proving a financial headache for their parents as they are forced to shell out on expensive insurance claims.

A study by Cornhill Insurance discovered that three in ten teenagers are regularly the victims of theft or lose their valuable gadgets.

Teenagers are, on average, walking the streets wearing goods up to the value of £768, with at least £300 represented by highly prized items such as flash watches and iPods.

And according to Mark Bishop, spokesman for Cornhill Direct, it is for this reason that parents are facing such hefty insurance claims.

He said: "Young teenagers travelling alone are particularly vulnerable to thieves and muggers."

He added: "Leaving the house wearing expensive jewellery and using an MP3 player might attract attention but not necessarily the sort a teenager is looking for in the shape of thieves and muggers."

However, the survey revealed that parents are not the only ones footing the bill as half of teenagers are saving up for their expensive gadgets out of their own money.

Price Shop for Your Health Insurance

What Options Do You Have for Buying Health Insurance on Your Own?

Question: What options do I have for buying health insurance on my own?

Answer: Because health insurance is administered differently in each state, a good starting place to find more information is the health or insurance department for the state where you live. Some states offer programs to the uninsured, such as the Family Health Plus program in New York state, allowing individuals or families with limited income to purchase their own plan. Alternatively, individual or family plans are offered at market rates through a number of national and regional carriers.

Those looking for individual and family plans can also start their research at Web sites such as www.healthdecisions.org and http://www.healthinsuranceinfo.net/.

Those who buy health insurance on their own tend to be relatively price sensitive since they absorb the entire cost of the plan themselves. Premiums vary by state and risk profile. A 2004 survey by the trade group America's Health Insurance Plans shows that individual annual premiums ranged from $1,885 in California to $6,048 in New Jersey. Ninety-four percent of the individual policies sold were on average less than $3,000. Nationwide, the survey showed annual premiums on average were $2,268 for individuals and $4,424 for families.

One New York-based nonprofit, the Freelancers Union, addresses a growing need for plans not sponsored by a company and has plans to expand its services to members outside New York. Members around the country can buy disability and life insurance, but only those in New York can buy health insurance. In the coming months, Freelancers Union plans to begin offering options to buy health insurance in the states with the greatest demand.

The nonprofit's largest membership can be found in New Jersey, California, Connecticut, Pennsylvania, Florida, Massachusetts, Texas, Ohio, Illinois and Maryland.

Other organizations that offer health insurance options include AllFreelance.com, the National Association for the Self-Employed, the National Writers Union and others.

Change is coming that may affect how not only freelance workers, but full-time employees, buy health insurance.

Freelancers Union founder Sara Horowitz said the rising cost of health insurance is contributing to the decline of the employer-sponsored system for health care. She predicts that a growing number of individuals will begin buying their own plans, leading to a "quintessential David and Goliath" problem where consumers have no buying power and no ombudsman to help them navigate their medical claims.

That, Horowitz said, will lead to a reinvention of how we buy health insurance, with people grouping themselves together to increase their negotiating power and fund health advocates who help negotiate the claims process.

"I think we're going to see a rise in these services over time," she said.

Business Insurance Online

What do you know about business insurance? What you should know about business insurance are two things that are important when you are out to get business insurance for yourself. There are many factors that you will need to take into consideration. But the most important of them are:

Price: You need to know you are getting the best quote available. The only ways to ensure that is by getting quotes from at least five different insurance companies and compare them. When you do that, check all the pros and cons so you get the complete picture. hen you do that, check all the pros and cons so you get the complete picture. Some insurance agencies charge a very small fee upfront but has a lot of other fees such as processing fees, inspection fees, documentation fees, etc which will take the price through the roof.

Another smart way is to get a quote from insurance brokers like http://www.oneshopinsurance.com. They can surely help you decide which insurance company is best for your insurance needs.

Kaiser Permanente Insurance

Kaiser Permanente is an integrated managed care organization, based in Oakland, California, founded in 1945 by industrialist Henry J. Kaiser and physician Sidney R. Garfield. Kaiser Permanente is a consortium of three distinct groups of entities: the Kaiser Foundation Health Plan, Inc. and its regional operating organizations, Kaiser Foundation Hospitals, and the Permanente Medical Groups.

As of 2006, Kaiser Permanente operates in nine states and Washington, D.C., and is the largest not-for-profit managed care organization in the United States. Kaiser Permanente has 8.5 million health plan members, 148,884 employees, 12,879 physicians, 37 medical centers, 400 medical offices, and $31.1 billion in annual operating revenues. The Health Plan and Hospitals operate under state and federal not-for-profit tax status, while the Medical Groups operate as for-profit partnerships or professional corporations in their respective regions.


Kaiser Permanente provides care throughout eight regions in the United States. Each of these regions comprise two or three (and, in one case, four) separate but interdependent legal entities. This structure has endured since Kaiser Permanente physicians and leaders agreed to this framework, known as the Tahoe Agreement, in 1955.

[edit] National structure

The two types of organizations which make up each regional entity are:

* Kaiser Foundation Health Plans work with employers, employees, and individual members to offer prepaid health plans. The health plans are not-for-profit and provide infrastructure for and invest in Kaiser Foundation Hospitals and for-profit medical groups.
* Permanente Medical Groups are partnerships of physicians, which provide and arrange for medical care for Kaiser Foundation Health Plan members in each respective region. The medical groups are for-profit partnerships or professional corporations and receive funding from Kaiser Foundation Health Plans. The first medical group, The Permanente Medical Group, formed in 1948 in Northern California.

In addition, Kaiser Foundation Hospitals operates medical centers in California, Oregon, and Hawaii, and outpatient facilities throughout the Kaiser Permanente regions. The hospital foundations are not-for-profit and primarily rely on the Kaiser Foundation Health Plans for funding. They also provide infrastructure and facilities that benefit for-profit medical groups.

[edit] Regional entities

For more information on the regional entities and management of Kaiser Permanente, see Kaiser Permanente entities.

Kaiser Permanente is administered through eight regions, including one parent and five subordinate health plan entities, one hospital entity, and nine separate, affiliated medical groups:

* Northern California
o Kaiser Foundation Health Plan, Inc. (KFHP)
o Kaiser Foundation Hospitals (KFH)
o The Permanente Medical Group, Inc. (TPMG)
* Southern California
o Kaiser Foundation Health Plan, Inc. (KFHP)
o Kaiser Foundation Hospitals (KFH)
o Southern California Permanente Medical Group (SCPMG)
* Colorado
o Kaiser Foundation Health Plan of Colorado (KFHPCO)
o Colorado Permanente Medical Group, P.C. (CPMG)
* Georgia
o Kaiser Foundation Health Plan of Georgia, Inc. (KFHPGA)
o The Southeast Permanente Medical Group, Inc. (TSPMG)
* Hawaii
o Kaiser Foundation Health Plan, Inc. (KFHP)
o Kaiser Foundation Hospitals (KFH)
o Hawaii Permanente Medical Group, Inc. (HPMG)
* Mid-Atlantic (vicinity of Washington, D.C., including Maryland and Virginia)
o Kaiser Foundation Health Plan of the Mid-Atlantic States Inc. (KFHPMA)
o Mid-Atlantic Permanente Medical Group, P.C. (MAPMG)
* Northwest (Northwest Oregon and Southwest Washington)
o Kaiser Foundation Health Plan of the Northwest (KFHPNW)
o Northwest Permanente, P.C. Physicians and Surgeons (NWP)
o Group Health Permanente, P.C. (GHP)
* Ohio
o Kaiser Foundation Health Plan of Ohio (KFHPOH)
o Ohio Permanente Medical Group, Inc. (OPMG)

In addition to the regional entities, in 1996, the then-twelve Permanente Medical Groups created The Permanente Federation, a separate and subordinate entity, which focuses on standardizing patient care and performance under one name and system of policies. The Federation oversees The Permanente Company, which provides a central governance structure for corporate activities.[2]

[edit] National management and governance

The separate entities of Kaiser Permanente each have separate management and governance structures, which, to some degree, are interdependent and cooperative. For example, George C. Halvorson is commonly referred to as the chief executive officer and chairman of Kaiser Permanente, although he is not an officer or director of any of the Permanente Medical Groups. Francis J. Crosson, who serves as executive director for The Permanente Federation, is sometimes referred to as the executive director for Kaiser Permanente as a whole.

Further, Jeffrey A. Weisz, the medical director of the Southern California Permanente Medical Group, is commonly referred to as the medical director for Kaiser Permanente Southern California. However, there are exceptions to the rule, due to the varied structures employed by the separate Medical Groups. For example, Dr. Weisz's Northern California counterpart, Robert M. Pearl, serves as executive director and chief executive officer of The Permanente Medical Group (of Northern California). Simply calling Dr. Pearl the chief executive officer of Kaiser Permanente Northern California would conflict with Mr. Halvorson's title, while calling him the executive director would conflict with Dr. Crosson's title.

[edit] Health Plan

The officers and directors of Kaiser Foundation Health Plan, Inc. directly manage and oversee, respectively, the operations of Health Plan for the Northern California, Southern California, and Hawaii regions. These same officers and directors concurrently serve as officers of Kaiser Foundation Hospitals, a legally separate entity.

The regions outside of California typically have subordinate management teams which report to the "national" management team (which, technically, manages only California, but, which, in practice, appoints and, thusly, manages the other regions, as well). Similarly, the regions outside of California typically have separate Boards of Directors, made up in whole or in part of the California directors or their appointees.

[edit] Officers

The management team of Kaiser Foundation Health Plan and Hospitals consists of:

* George C. Halvorson, chairman and chief executive officer
* Raymond J. Baxter, senior vice president for community benefit
* Robert M. Crane, senior vice president for research and policy development
* J. Clifford Dodd, senior vice president, chief information officer, and chief administrative officer
* Jerry C. Fleming, senior vice president and National Health Plan Manager
* Daniel P. Garcia, senior vice president and chief compliance officer
* Kathy Lancaster, senior vice president and chief financial officer
* Louise Liang, senior vice president for quality and clinical systems support
* Diane Gage Lofgren, senior vice president for brand strategy, communications, and public relations
* Laurence G. O'Neil, senior vice president for human resources
* Arthur M. Southam, senior vice president for product and market management
* Bernard J. Tyson, senior vice president for Health Plan and Hospital operations
* Steven R. Zatkin, senior vice president, general counsel, and secretary
* Thomas R. Meier, vice president and treasurer
* Deborah Stokes, vice president and controller
* Victoria B. Zatkin, assistant secretary, senior counsel, and director for board and corporate governance services

Mr. Dodd resigned as chief information officer in November 2006, although it is not yet clear whether he still serves as an officer of Health Plan and Hospitals. Mr. Crane also serves as the director of the Kaiser Permanente Institute for Health Policy.

[edit] Directors

The Board of Directors, the ultimate governing body of Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals, currently has fourteen authorized designated, ex officio, or appointed seats. The directors serve three year terms, and may be reappointed. The bylaws of Kaiser Foundation Health Plan provide that, when there is a vacancy, the remaining members of the Board, in whole or in part, will select and appoint a new director to fill that vacant seat. Thusly, the Board is considered a self-appointing, self-selected, unelected Board.

The current ex officio and designated directors (who likely will serve until replaced by the Board):

* George C. Halvorson, chairman and chief executive officer, and an ex officio director
* Daniel P. Garcia, senior vice president and chief compliance officer, and a designated director

With terms expiring at the first regular Board meeting in 2007:

* William R. Graber, former senior vice president and chief financial officer, McKesson Corporation
* Kim J. Kaiser, pilot, Alaska Airlines
* Sandra P. Thompkins, executive director of human resources for Delphi Packard Electric Systems

With terms expiring at the first regular Board meeting in 2008:

* Christine K. Cassel, executive head of the American Board of Internal Medicine
* Judith A. Johansen, former president and chief executive officer of PacifiCorp
* Edward Pei, executive vice president of First Hawaiian Bank
* Cynthia A. Telles, director of the Spanish-Speaking Psychosocial Clinic at the UCLA School of Medicine

With terms expiring at the first regular Board meeting in 2007:

* Thomas W. Chapman, president and chief executive officer, The HSC Foundation
* J. Eugene Grigsby, II, president and chief executive officer, National Health Foundation
* Philip A. Marineau, president and chief executive officer, Levi Strauss & Co.
* J. Neal Purcell, retired vice chairman, KPMG International

There is currently one vacancy on the Board, which will likely be filled at the first regular Board meeting in 2007.

[edit] Federation

The Permanente Federation is a national, but subordinate entity representing the regional Permanente Medical Groups.

[edit] Management

The management of The Permanente Federation is made up of:

* Francis J. Crosson, executive director
* Simon Cohn, associate executive director and director, health information policy
* Steve Cole (businessman), director, public policy and government relations
* Robert Formanek, medical director, quality review
* Pauline Fox, general counsel and compliance liaison
* Glen Hentges, chief financial officer
* Rand Holt, associate executive director, business information support
* Michael Mustille, associate executive director, external relations
* Jill Steinbrugge, associate executive director, physician development
* Paul Wallace, medical director, health and productivity management programs
* Jed Weissberg, associate executive director, quality and performance improvement
* Andrew Wiesenthal, associate executive director, clinical information support
* Winston Wong (physician), clinical director, community benefit

The management of The Permanente Company is made up of:

* Francis J. Crosson, president and chief executive officer
* Chris Grant (businessman), vice president, national venture development
* Edwina Zeppieri, controller

[edit] Governance

The Permanente Federation is accountable to an Executive Committee, and is made up of four of the nine regional Permanente Medical Group chiefs. The chief executive officer and executive director for The Permanente Medical Group and the medical director for the Southern California Permanente Medical Group have permanent seats on the committee. The remaining seven regional Permanente Medical Groups select two additional committee members from among their own chiefs. In addition, once the Executive Committee appoints an executive director for The Permanente Federation, that executive director serves as an ex officio member of the Executive Committee, bringing the committee to five total seats. The current Executive Committee is:

* Francis J. Crosson, executive director of The Permanente Federation
* Robert M. Pearl, executive director and chief executive officer, TPMG
* Jeffrey A. Weisz, medical director and chairman, SCPMG
* Bruce Perry (physician), medical director and chairman, TSPMG
* Ronald Copeland, president and medical director, OPMG, currently chairman of The Permanente Federation

[edit] Regional governance

For more information on the regional entities and management of Kaiser Permanente, see Kaiser Permanente entities.

Each regional entity of Kaiser Permanente typically has a president, appointed by the chief executive officer and chairman of Kaiser Foundation Health Plan, Inc. Each regional president has autonomy to manage the operations of each region, to some degree, and typically works closely with the Permanente Medical Group chief for their region in setting and executing strategy that is in harmony with national strategy, planning, policies, and expectations.

[edit] History

[edit] Early years

Though it has since become the largest organization of its kind, Kaiser was not the first HMO.[3] In its modern form, the HMO combines a large group practice, contracts with employers to care for a group of workers, and a prepayment plan for both hospitals and group practices. The first "contract doctor" system in the West was orchestrated by Dr. Raymond G. Taylor, who created a temporary healthcare system from 1908 to 1912 on behalf of the Los Angeles Board of Public Works to care for the 10,000 workers on the Los Angeles Aqueduct project.[3] The first group prepayment plans appeared in 1929 in response to the onset of the Great Depression.[3] That year, Baylor University started a hospital prepayment plan, the first of several which would ultimately join together to become the Blue Cross insurance network.[3] In Oklahoma, Dr. Michael Shadid recruited local farmers around Elk City, Oklahoma into a small consumer healthcare cooperative.[3] And in Los Angeles, Dr. Donald Ross and Dr. H. Clifford Loos founded the Ross-Loos Clinic to care for City of Los Angeles public utilities workers.[3]

As for Kaiser Permanente, its history dates back to the year 1933 and a tiny hospital in a little town called Desert Center, California.[3] At that time, Kaiser and several other large construction contractors had formed an insurance consortium called Industrial Indemnity to meet their workers' compensation obligations.[3] Garfield had just finished his residency at Los Angeles County-USC Medical Center at a time when jobs were scarce; fortunately, he was able to secure a contract with Industrial Indemnity to care for 5,000 construction workers building the Colorado River Aqueduct in the Mojave Desert.[3] Soon enough, Garfield's new hospital was in a precarious financial state (with mounting debt and the staff of three going unpaid), due in part to Garfield's desire to treat all patients regardless of ability to pay, as well as his insistence on equipping the hospital adequately so that critically injured patients could be stabilized for the long journey to full-service hospitals in Los Angeles.[3]

However, Garfield's dedication and competence won over two Industrial Indemnity executives, Harold Hatch and Alonzo B. Ordway.[3] It was Hatch who proposed to Garfield the specific solution that would lead to the creation of Kaiser Permanente: Industrial Indemnity would prepay 17.5% of premiums, or $1.50 per worker per month, to cover work-related injuries, while the workers would each contribute five cents per day to cover non-work-related injuries.[3] Later, Garfield also credited Ordway with coming up with the general idea of prepayment for industrial healthcare.[3] Garfield also later explained that he did not know much at the time about other similar health plans except for Ross-Loos.[3]

Hatch's solution enabled Garfield to bring his budget back into the positive, and to experiment with providing a broader range of services to the workers besides pure emergency care. By the time work on the aqueduct concluded and the project was wrapped up, Garfield had paid off all his debts, was supervising ten physicians at three hospitals, and controlled a healthy financial reserve of $150,000.[3]

Garfield returned to Los Angeles for further study at County-USC with the intent of entering private practice.[3] However, in March 1938, Consolidated Industries (a consortium led by the Kaiser Company) initiated work on a contract for the upper half of the Grand Coulee Dam in Washington state, and took over responsibility for the thousands of workers who had worked for a different construction consortium on the first half of the dam.[3] Edgar Kaiser, Henry's son, was in charge of the project.[3] To smooth over relations with the workers (who had been badly treated by their earlier employer), Hatch and Ordway persuaded Edgar to meet with Garfield, and in turn Edgar persuaded Garfield to tour the Grand Coulee site.[3] Garfield subsequently agreed to reproduce at Grand Coulee Dam what he had done on the Colorado River Aqueduct project.[3] He immediately spent $100,000 on renovating the decrepit Mason City Hospital and hired seven physicians.[3]

Unlike the workers on Garfield's first project, many workers at Grand Coulee Dam had brought dependents with them. The unions soon forced the Kaiser Company to expand its plan to cover dependents, which resulted in a dramatic shift from industrial medicine into family practice and enabled Garfield to formulate some of the basic principles of Kaiser Permanente.[3] It was also during this time that Henry Kaiser personally became acquainted with Garfield and forged a friendship which lasted until Kaiser's death.[3]

In 1939, the Kaiser Company began working on several huge shipbuilding contracts in Oakland, and by the end of 1941 would control four major shipyards on the West Coast.[3] During 1940, the expansion of the American defense-industrial complex in preparation for entrance into World War II resulted in a massive increase in the number of employees at the Richmond shipyard.[3] In January of 1941, Henry Kaiser asked Garfield to set up an insurance plan for the Richmond workers (this was merely contract negotiation with insurance companies), and a year later Kaiser asked Garfield to duplicate at Richmond what he had done at Desert Center and Mason City.[3] Unlike the two other projects, the resulting entity lived on after the construction project that gave birth to it, and it is the direct ancestor of today's Kaiser Permanente.[3]

On March 1, 1942, Sidney R. Garfield & Associates opened its offices in Oakland to provide care to 20,000 workers, followed by the opening of the Permanente Health Plan on June 1.[3] From the beginning, Kaiser Permanente strongly supported preventive medicine and attempted to educate its members about maintaining their own health.[3]

In July the Permanente Foundation was formed to operate Northern California hospitals that would be linked to the outpatient health plans, followed shortly thereafter by the creation of Northern Permanente Foundation for Oregon and Washington and Southern Permanente Foundation for Southern California.[3] The name Permanente came from Permanente Creek, which ran by Henry Kaiser's first cement plant; Kaiser's first wife, Bess Fosburgh, liked the name.[3] The first Permanente Hospital opened in Oakland on August 1.[3] Three weeks later, the Richmond Field Hospital opened, and the Northern Permanente Hospital opened two weeks later to serve workers at the Kaiser shipyard in Vancouver, Washington.[3] In 1944 Kaiser decided to continue the program after the war and to open it up to the general public.[3]

Meanwhile, during the war years, the American Medical Association (which opposed managed care organizations from their very beginning) tried to defuse demand for managed care by promoting the rapid expansion of the Blue Cross and Blue Shield preferred provider organization networks.[3]

[edit] Postwar growth

The end of World War II brought about a huge plunge in Kaiser Permanente membership; for example, 50,000 workers had left the Northern California yards by July 1945.[3] Membership bottomed out at 17,000 for the entire system but then surged back to 26,000 within six months as Garfield aggressively marketed his plan to the public.[3] Sidney Garfield & Associates had been a sole proprietorship, but in 1948, it was reorganized into a partnership, Permanente Medical Group.[3]

During this period, a substantial amount of growth came from union members; the unions saw Kaiser Permanente care as more affordable and comprehensive than what was available at the time from private physicians under the fee-for-service system.[3] For example, Fortune magazine had reported in 1944 that 90% of the U.S. population could not afford fee-for-service healthcare.[3] Kaiser Permanente membership soared to 154,000 in 1950, 283,000 in 1952, 470,000 in 1954, 556,000 in 1956, and 618,000 in 1958.[3]

From 1944 onward, both Kaiser Permanente and Garfield fought off numerous attacks from the AMA and various state and local medical societies.[3] Fortunately, Henry Kaiser came to the defense of both Garfield and the health plans he had created.[3]

In 1951 the organization acquired its current name when Henry Kaiser unilaterally directed the trustees of the health plans, hospital foundations, and medical groups to add his name before Permanente.[3] However, the physicians in the Permanente Medical Group deeply resented the implication that they were directly controlled by Kaiser, and successfully forced him to back off with respect to their part of the organization.[3] That same year, Kaiser Permanente also began experiments with large-scale multiphasic screening to identify unknown conditions and to facilitate treatment of known ones.[3] Simultaneously, although no one questioned his medical competence, Garfield's deficiencies as an executive were becoming apparent as the organization expanded far beyond his ability to manage it properly.[3]

Even worse, Henry Kaiser became fascinated with the healthcare system created for him by Garfield and began to directly micromanage Kaiser Permanente and Garfield.[3] This resulted in a financial disaster when Kaiser splurged on the new Walnut Creek hospital; his constant intermeddling led to significant friction at every level of the organization.[3] The situation was not helped by Kaiser's marriage to Garfield's head administrative nurse (who had helped care for Kaiser's first wife on her deathbed), convincing Garfield to marry the sister of that nurse, and then having Garfield move in next door to him.[3] Clifford Keene (who would eventually serve as president of Kaiser Permanente) later recalled that this arrangement resulted in a rather dysfunctional and combative family in charge of Kaiser Permanente.[3]

Keene was an experienced Permanente physician whom Garfield had personally hired in 1946.[3] During 1953 he had been trying to get a job at U.S. Steel, but on the morning of December 5, 1953, with internal tensions worsening day by day, Garfield met with Keene at the Mark Hopkins Hotel in San Francisco and asked him to turn around the organization.[3] It took Keene 15 years to realize that Kaiser had forced Garfield to ask Keene to become his replacement.[3] Due to the chaos on the board, Keene at first took control with the vague title of Executive Associate, but it soon became clear to everyone that he was actually in charge and Garfield was to become a lobbyist and "ambassador" for the HMO concept.[3]

However, even with Garfield relieved of day-to-day management duties, the underlying problem of Henry Kaiser's authoritarian management style continued to persist.[3] After several tense confrontations between Kaiser and Permanente Medical Group physicians, the doctors met with Kaiser's top adviser, Eugene Trefethen, at Kaiser's personal estate near Lake Tahoe on July 12, 1955.[3] Trefethen came up with the idea of a contract between the medical groups and the health plans and hospital foundations which would set out roles, responsibilities, and financial distribution.[3]

While Keene and Trefethen struggled to fix the damage from Kaiser's micromanagement and Garfield's ineffectual management, Henry Kaiser moved to Oahu in 1956 and then insisted on expanding Kaiser Permanente into Hawaii in 1958.[3] He promptly ruined what should have been a simple project, and only a last-minute intervention by Keene and Trefethen in August 1960 prevented the total disintegration of the Hawaii organization.[3] By that year, Kaiser membership had grown to 808,000.[3]

[edit] Managed care era

Having overseen Kaiser Permanente's successful transformation from Henry Kaiser's healthcare experiment into a large-scale self-sustaining enterprise, Keene retired in 1975.[3] By 1976, membership reached three million. In 1977, all six of Kaiser Permanente's regions had become federally qualified health maintenance organizations. Some believe then-President Richard Nixon specifically had Kaiser Permanente in mind when he signed the Health Maintenance Organization Act of 1973, as the organization was mentioned in an Oval Office discussion of the Act.[4] In 1980, Kaiser acquired a non-profit group practice to create its Mid-Atlantic region, encompassing the District of Columbia, Maryland, and Virginia. In 1985, Kaiser Permanente expanded to Georgia.

[edit] Regional evolution

By 1990, Kaiser Permanente provided coverage for about a third of the population of the cities of San Francisco and Oakland; total Northern California membership was over 2.4 million.[3]

Elsewhere, Kaiser Permanente did not do as well, and its geographic footprint changed significantly in the 1990s. The organization spun off or closed outposts in Texas, North Carolina, and the Northeast. In 1998, Kaiser Permanente sold its Texas operations, where reported problems had become so severe that the organization directed its lawyers to attempt to block the release of a Texas Department of Insurance report. This prompted the state attorney general to threaten to revoke the organization's license. In North Carolina, the Industrial Union Department of the AFL-CIO issued a 1996 report critical of the quality of the care the organization provided[citation needed]. Kaiser Permanente closed health plans in Charlotte and Raleigh-Durham in North Carolina four years later. The organization also sold its unprofitable Northeast division in 2000.

In 1995, Kaiser Permanente celebrated its fiftieth anniversary as a public health plan. Two years later, national membership reached nine million. In 1997, the organization established an agreement with the AFL-CIO to explore a new approach to the relationship between management and labor, known as the Labor Management Partnership.

[edit] Marketing

During the 1990s, the organization hired public relations firm Bain and Associates to position their brand in Washington, D.C. The organization also hired Strategic Partnerships LLC to secure[citation needed] tax incentives and a special hearing for government grants.

In 1999, a number of groups successfully sued Kaiser Permanente in regard to its In the Hands of Doctors advertising campaign. The lawsuit revealed that doctors at the organization were not fully in control of decision-making and that there may have been persuasion to limit care with financial bonuses. In 2004, the organization retained Campbell-Ewald to develop a $40-million-dollar ad campaign called Thrive. The campaign, which focuses on the theme of preventative care, was the first since Kaiser Permanente's In the Hands of Doctors campaign. Allison Janney is the company's advertising spokesperson.

[edit] Quality of care

U.S. News and World Report, in its 2005 annual ranking of US commercial health plans, listed Kaiser Permanente Hawaii as 45th (out of 257 health plans), Kaiser Permanente Colorado as 55th, Kaiser Permanente Northern California as 58th, Kaiser Permanente Mid-Atlantic as 73rd, Kaiser Permanente Georgia as 81st, and Kaiser Permanente Southern California as 88th.[5]

A 2004 Consumer Reports survey of planholders ranked Kaiser Permanente overall as average or better. It showed below average ratings in the Colorado and Mid-Atlantic regions for two measures of quality of care: 'care from doctors', and the 'quality of their primary care physician'. The same survey ranked Kaiser Permanente's Northern California region as the best HMO overall among rated plans.[6]

In the 2006 California Healthcare Quality Report Card, Kaiser Permanente's Northern California and Southern California regions led the rankings, with each scoring six out of eight possible stars.[7]

[edit] International reputation

Early in the 21st century the NHS and UK department of health became impressed with some aspects of the Kaiser operation, and initiated a series of studies involving several healthcare organisations in England.[8][9] Visits occurred and suggestions of adopting some KP policies are currently active. The management of hospital bed-occupancy by KP, by means of integrated management in and out of hospital and monitoring progress against care pathways has been admired, and given rise to trials of similar techniques in eight areas of the UK.

In 2005 a controversial British Medical Journal editorial[10] reported a study by California-based academics which compared Kaiser to the British National Health Service.[11] The editorial in the BMJ suggested that KP managed comparable costs to the NHS, but this generated argument mainly that American costs were in fact higher than NHS, and it was generally accepted that the NHS was cheaper and more efficient whereas Kaiser may be more rapid.

[edit] Research

Kaiser doctors and others carry out research publishing in peer-reviewed journals and in the organization's own journal Permanente Journal.

Kaiser operates a Division of Research which in 2006 declared around 200 active studies in progress. Kaiser's bias toward prevention is reflected in the areas of interest - vaccine and genetic studies are prominent.

Measles vaccine project participation

Between June 1990 and October 1991, Kaiser, along with the Los Angeles County Department of Health, Johns Hopkins University and the CDC carried out a clinical trial of the Edmonton strain of Measles vaccine. The Los Angeles arm of the trial involved 1500 (900 receiving the study treatment) mostly black and Latino babies. Other arms ran in Haiti and several African countries. The aim was to induce immunity to Measles earlier, as cases in young children had been causing alarm. The trial was ended early when increased mortality appeared in other countries. Inadequate consent had been obtained, in that parents were not informed that the vaccine, licenced in other countries and registered with the FDA as a trial medication, was unlicensed in the U.S. This raised concerns over US government department ethics, and occasioned an apology by the CDC[12] who ascribed it to an administrative oversight.

[edit] Regulation

In California, the Department of Managed Health Care is the state regulatory agency which oversees managed care insurers and providers. In 2005, the Department of Managed Health Care ranked Kaiser Permanente near the top of the list of California managed care insurers[13], and rated the health plan as superior on preventive care.

Federal regulation of managed care

The organization is mentioned in an Oval Office discussion about the initiation[14] of the Health Maintenance Organization Act of 1973. By 1977, all six of Kaiser's regions had become federally qualified HMOs.

[edit] Concerns and violations

As the largest not-for-profit health plan in the United States, Kaiser Permanente is a target of both praise and criticism. In recent years, however, the organization has come under intensive scrutiny for a series of management, patient care, financial, and technology issues, primarily in its Northern and Southern California regions.

[edit] Mandatory arbitration

In order to contain costs, Kaiser requires agreement by planholders to submit patient malpractice claims to arbitration rather than litigating through the court system. This has triggered some discussion and dissent.[15] Some cases proceed to court and one argument is over whether the requirement to go through dispute resolution is enforceable[citation needed].

Kaiser established an Office of Independent Administrators (OIA) in 1999 to oversee the arbitration process. The degree to which this is independent has been questioned.[16]

Wilfredo Engalla is a notable case. In 1991, Engalla died of lung cancer nearly five months after submitting a written demand for arbitration. The California Supreme Court found[17] that Kaiser had a financial incentive to wait until after Engalla died; his spouse could recover $500,000 from Kaiser if the case was arbitrated while he was alive, but only $250,000 after he died. The Foundation for Taxpayer & Consumer Rights contends that Kaiser continues to oppose HMO arbitration reform[18]

Patients and consumer interest groups sporadically attempt to bring lawsuits against Kaiser. Recent lawsuits include Gary Rushford's attempt to use proof of a physician lie to overturn an Arbitration decision.

[edit] Homeless patient treatment

Kaiser has settled three cases for alleged patient dumping since 2002. During that same period, the Office of the Inspector General settled 102 cases against US Hospitals which resulted in a monetary payment to the agency. [19][20][21]

On November 16, 2006, Los Angeles city officials filed civil and criminal legal action against Kaiser Permanente for "patient dumping"--the delivery of homeless hospitalized patients to other agencies or organizations in order to avoid expensive medical care, as reported by National Public Radio's All Things Considered.

The legal filings are intended to punish hospitals for releasing homeless hospital patients (often via taxis) on the sidewalk near relief shelters instead of accepting responsibility for releasing hospital patients into the care of a relative, or of a recognized agency.

The city's decision to charge Kaiser Permanente reportedly was influenced by security camera footage, allegedly showing a 63-year-old patient, dressed in hospital gown and slippers, wandering toward a mission on Skid Row, as outlined in a 20-page complaint. City officials say that as many as 10 other area hospitals are under investigation for possible future action for this practice. [22]

[edit] Kidney transplant program

In 2004 Kaiser initiated an in-house program for kidney transplantation. Prior to opening the transplant center, Kaiser patients would generally receive transplants at medical centers associated with the University of California (UC San Francisco and UC Davis). Upon opening the transplant center, Kaiser required that members who are transplant candidates in Northern California obtain services through their transplant center.

On May 3, 2006, the Los Angeles Times published an investigative report which accused the transplant program of mismanagement which resulted in delays for patients awaiting kidneys.[23] According to the report, Kaiser performed 56 transplants in 2005 and twice that many patients died waiting for a kidney. At other California transplant centers, more than twice as many people received kidneys than died during the same period.

On May 13, 2006 and after less than two years of operation, Kaiser announced that it would discontinue the kidney transplant program. As before, Kaiser now pays for pre-transplant care and transplants at outside hospitals and this change affected approximately 2000 patients.[24][25]

Two patients have filed personal injury lawsuits against Kaiser and the widow of a patient who died has filed a wrongful death claim. According to the lawyer representing the three plaintiffs, more lawsuits are planned.[26]

21st Century Insurance Group Receives Notification of an Unsolicited Buyout Proposal from American International Group, Inc.

Special Committee of Independent Directors to Consider the Proposal

WOODLAND HILLS, Calif.-- 21st Century Insurance Group (NYSE:TW) announced today that American International Group, Inc. (“AIG”) has submitted an unsolicited proposal to the Board of Directors of 21st Century Insurance Group (“21st Board") to acquire the shares of 21st’s common stock that AIG and its subsidiaries do not already own for $19.75 per share in cash. AIG and its subsidiaries own approximately 61.9% of the outstanding shares of 21st. For more information about this proposal, please refer to the Schedule 13D filed yesterday by AIG with the Securities and Exchange Commission.

The 21st Board has formed a Special Committee comprised entirely of independent and outside directors for the purpose of considering a proposal from AIG. The Special Committee will review and evaluate AIG’s offer and make a recommendation to the 21st Board. No decisions whatsoever have been made by the Special Committee with respect to its response, if any, to the proposal. The Special Committee will proceed in an orderly and timely manner to consider the proposal and its implications, and there can be no assurance that the proposed transaction or any other transaction will be approved or completed.

The Special Committee has retained Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel and Lehman Brothers Inc. as its financial advisor to assist in its review and evaluation of the proposal.

NOTICE FOR 21ST CENTURY STOCKHOLDERS AND INTERESTED PARTIES

This press release is not a solicitation of a proxy, an offer to purchase or a solicitation of an offer to sell shares of 21st, and is not a substitute for any proxy statement, tender offer statement or other filing that may be required to be made with the Securities and Exchange Commission if the proposed transaction goes forward. 21st stockholders and other interested parties are urged to read any such documents that are filed with the Securities and Exchange Commission because those documents will contain important information. Stockholders will be able to receive such documents free of charge at the SEC’s web site, www.sec.gov, in the Investor Relations section of the Company’s website, www.21st.com, or by contacting Investor Relations at 21st at 6301 Owensmouth Avenue, Woodland Hills, California 91367.

About 21st: Drivers Just Like You

Founded in 1958, 21st Century Insurance Group is a direct-to-consumer provider of personal auto insurance. With $1.4 billion of revenue in 2005, the Company insures over 1.5 million vehicles in 17 states, including California, Florida, New Jersey, and Texas. The Company has successfully executed a multi-year geographic expansion strategy which increased the percentage of the U.S. private passenger automobile market in which 21st operates from approximately 18% in 2003 to approximately 60% at the end of 2006. 21st provides superior policy features and 24/7 customer service at a competitive price. Customers can purchase insurance, service their policy or report a claim at www.21st.com or on the phone with our licensed insurance professionals at 1-800-211-SAVE, 24 hours a day, 365 days a year. Service is offered in English and Spanish, both on the phone and on the web. 21st Century Insurance Company, 21st Century Casualty Company, and 21st Century Insurance Company of the Southwest are rated A+ by A. M. Best, Fitch Ratings and Standard & Poor’s.

21st Century Insurance Group is traded on the New York Stock Exchange under the trading symbol “TW” and is headquartered at 21st Century Plaza, 6301 Owensmouth Avenue, Woodland Hills, CA 91367.

The health care jiggle?

As some of y’all know, the Shrimp and Grits family grew in October. Now, the bills are starting to roll in. Health care bills, that is - bills from the hospital, where my wife gave birth. Bills from the doctors at the hospital. Bills from the anesthesiologist. Bills from the pediatrician. More bills from the hospital.

In short, never-ending medical bills - and none of them cheap.

So, when I heard that President Bush was going to address health care in his State of the Union address, I was interested. Health care costs in this country are ballooning.

Over the past few years, I’ve seen

* my premiums go up (and up, and up)
* my deductible go up along with my premiums
* my out-of-pocket maximums go up
* my copays go up, especially for prescription drugs. (To add insult to injury, almost every time I’ve gotten a medicine prescribed that wasn’t an antibiotic, I’ve had to go through trying to fill the prescription, having it denied by insurance, then having to get the doctor to call the insurance company and essentially beg them to cover the medicine.)

Any kind of meaningful health care reform is going to have to address a lot of things. We need to find ways to control costs, ways to reduce the "red tape" people go through to get care, ways to make sure that all Americans can get the care they need, ways to ensure that families won’t lose everything if a member gets a long-term illness, et cetera. That’s a tall order.

Here’s what Bush said:

A future of hope and opportunity requires that all our citizens have affordable and available health care. When it comes to health care, government has an obligation to care for the elderly, the disabled, and poor children. We will meet those responsibilities. For all other Americans, private health insurance is the best way to meet their needs. But many Americans cannot afford a health insurance policy.

On what basis does Bush assume that private health insurance is the best way to meet the needs of most Americans? I have private health insurance. It seems to be more a part of the problem than part of the solution. The private insurer takes my money, provides me with little or no care without me paying even more for it through deductibles and other out-of-pocket expenses, and hassles me when my doctor prescribes medicines that they think cost too much. Plus, they don’t pay one cent towards any preventative care.

Bush continues:

Tonight, I propose two new initiatives to help more Americans afford their own insurance. First, I propose a standard tax deduction for health insurance that will be like the standard tax deduction for dependents. Families with health insurance will pay no income or payroll taxes on $15,000 of their income. Single Americans with health insurance will pay no income or payroll taxes on $7,500 of their income. With this reform, more than 100 million men, women, and children who are now covered by employer-provided insurance will benefit from lower tax bills.

Say what? Bush’s proposal to fix the health care system in this country is … a tax cut???

(I’ve since seen that it’d be a tax increase or at best a wash for some - those who have decent employer-provided insurance.)

I need some help here. I’d like someone to explain to me how jiggling the tax code this way is going to stop the upward spiral of health care costs and get Americans hassle-free access to quality care. How does this proposal address the rising prices of prescription drugs? How does it cut through the massive piles of paperwork and bills that those who are lucky enough to have insurance deal with?

Assuming it gives a few people a temporary financial boost (which will probably correct itself within a few years), how is this not the equivalent to putting a Band-Aid over a severed arm?

Bush again:

At the same time, this reform will level the playing field for those who do not get health insurance through their job. For Americans who now purchase health insurance on their own, my proposal would mean a substantial tax savings - $4,500 for a family of four making $60,000 a year. And for the millions of other Americans who have no health insurance at all, this deduction would help put a basic private health insurance plan within their reach. Changing the tax code is a vital and necessary step to making health care affordable for more Americans.

So what’s "basic" health insurance? Extremely high deductibles and exremely limited coverage? ("Safe Auto" for health?) Wouldn’t this proposal simply lead to people buying this "basic" insurance to get the tax break, driving the prices of halfway decent insurance plans even higher?

My second proposal is to help the States that are coming up with innovative ways to cover the uninsured. States that make basic private health insurance available to all their citizens should receive Federal funds to help them provide this coverage to the poor and the sick. I have asked the Secretary of Health and Human Services to work with Congress to take existing Federal funds and use them to create "Affordable Choice" grants. These grants would give our Nation’s Governors more money and more flexibility to get private health insurance to those most in need.

Thinking back on this part of Bush’s speech, this thought struck me: Those most in need do not need private health insurance. What those most in need do need is health care.

There are many other ways that Congress can help. We need to expand Health Savings Accounts … help small businesses through Association Health Plans … reduce costs and medical errors with better information technology … encourage price transparency … and protect good doctors from junk lawsuits by passing medical liability reform. And in all we do, we must remember that the best health care decisions are made not by government and insurance companies, but by patients and their doctors.

I’m all for upgrading the archaic information technology systems in use in the medical field. On the patient side, the reams of paperwork are a major hassle. Every time I’ve seen a new doctor, I’ve had to fill out a brand new set of papers. I don’t imagine it’s any better for the doctors, who must be positively buried in paperwork. And these mountains of paper do lead to error. Not too long ago, my records at one doctor’s office got mixed together with someone else’s. Luckily, the doctor caught on - it wsa pretty obvious that I wasn’t being treated for a stroke. (I was being treated for hay fever.)

And I’m all for price transparency. Getting an itemized bill out of the local hospital is almost impossible (but it’s needed to get reimbursed by pre-tax plans like MoneyPlus). It’s pretty obvious, though, that the hospital simply doesn’t want to you know what you’re being charged for. (We’ve been double-billed several times.) Sigh. Only in America do you go into the hospital for one service, then get a two dozen bills for it afterwards.

Medical liability reform? I might be able to get behind that with some evidence that "junk" malpractice suits really are a major reason health care costs are so high today.

In summary, I’m pretty underwhelmed by Bush’s new health care tax jiggle. Maybe some of y’all can enlighten me on what good is supposed to come of this?

Property Insurance

How much your home property insurance coverage will cost is not the only thing to consider when you’re shopping for insurance.

You need to purchase the right type of home property insurance. You need to identify the proper level of protection your home property insurance can provide. You need to know if there are special provisions included in your home property insurance.

These special provisions will provide coverage for your valuables like jewelry, computer, and other personal belongings. In addition, you might also need additional coverage in your home property insurance against such catastrophes as earthquakes, floods, windstorms, fires, and the like.

Home Property Insurance and Mortgage

Most lending institutions require home property insurance before approving your mortgage application. Lenders will use this as a legal underwriting and guaranty.

Home property insurance has several basic policy types. Below are a few of these home property insurance policies.

HO-1 Home Property Insurance Policy

This type of home property insurance policy provides protection for homeowners. The coverage offered by an HO-1home property insurance policy includes the house and possessions against 11 different perils.

HO-2 Home Property Insurance Policy

HO-2 home property insurance policy is also known as broad homeowners’ policy. This type of home property insurance policy covers the house and its contents against 17 perils. HO-2 home property insurance policy has premium running about 5 per cent to 10 per cent more than an HO-1 policy.

HO-3 Home Property Insurance Policy

Also called special homeowners home property insurance policy, HO-3 home property insurance policy covers all perils except those that were specifically excluded in the contract. The cost for an HO-3 home property insurance policy is 10 per cent to 15 per cent more than an HO-1 policy.

HO-4 Home Property Insurance Policy

This type of home property insurance policy is specifically targeted to rental property owners. Covering 17 stated perils, HO-4 home property insurance policy includes liability coverage but does not insure the dwelling itself.

HO-5 Home Property Insurance Policy

This type of home property insurance policy covers practically all damages except those caused by earthquakes, wars, and floods. HO-5 home property insurance policy is also known as extensive homeowners’ policy.

HO-6 Home Property Insurance Policy

HO-6 home property insurance policy is for owners of co-ops or condominiums. This type of home property insurance policy provides coverage against perils state in the HO-1 policy. The only difference is that HO-6 home property policy only pays for repair costs or actual cash value. Replacement cost may be covered also but it will make the policy costly.

tags: property insurance,property insurance

5 Reasons Why You Really Need Many Auto Insurance Quotes

It is so common that people usually pay too much on car insurance these days. Actually, there are plenty of companies that are gladly to quote you their best car insurance price even they may not be the cheapest one. Therefore, you need to be proactive and try to find as many insurance quotes as possible and get the best deals if you do not want to be charged too much on auto insurance. It is the only way that you can compare different quotes and you need to have a deep auto insurance review. Or else, you can hardly get the best deal. But it is really worth in the long run when considering you can save a big amount on your car insurance premiums or rates.

Apart from that , when it comes to the renewal, you need to compare your current auto policy and coverage amount against the other quotes for making sure that you still have a best deal. In fact, if you have a lot of different quotes to use for an auto insurance comparison it is very important to pay attention on whether you can get the same benefits across different auto insurance companies. If they are not all the same, you can then hardly compare them on a reasonable basis.

Another tip to avoid trying too many companies is to get an insurance broker as they can keep in touch with a lot of different auto insurance providers for you and then give you the best quotes quickly. They can then earn some commission per sale but it should not be affection on the amount that you pay. The main reason behind is when you ask many brokers for a quote, you can then get several quotes from plenty of different insurance companies much faster and easier. You can just simply visit their website and add your details to get the instant quote.

At last, even you can easily get quotes from most of the insurance companies by having your own auto insurance broker, it is still a good idea to try out and do your own research on the cheaper companies directly as they may also have cheaper rates if you buy from them directly and they do need to pay a commission to an insurance broker. Hence, doing a auto insurance comparison is not that hard as you think and you can benefit alot by having the best auto insurance quote for your needs if you ask enough companies.

Buyer Beware: Know Your Title Insurance Regulations News

New York, NY: Low interest rates in the past few years have induced many home owners to refinance their home. Did you know that, when a consumer refinances their home in most states, they are entitled to get discounts on certain fees associated with their mortgage?

For example, when a home is refinanced in Pennsylvania, title insurers may only charge a specific, regulated rate for title insurance. In other words, when the consumer refinances their home in that state, the rate is supposed to be discounted. But many title insurance companies are not discounting their rate, therefore causing the consumer to be overcharged on title fees. This is a violation of the Pennsylvania Law.

Real estate scams abound and the land title industry is one of them.

Unfortunately, not all title agents are created equal. Some lack the professional skills and ethics to act in the best interest of consumers and lenders. Although licensing standards and title insurance is regulated, it still leaves room for fraud.

Chicago Title Insurance Company is alleged to overcharge title insurance, thereby violating state laws. A recent lawsuit claims that Chicago Title is supposed to give a 10-30% discount to people refinancing their home, but charges their full basic rate. The plaintiff is seeking a refund of the amount overcharged by Chicago Title.

Chicago Title is not the only company guilty of overcharging for title insurance. In September 2006, the Lorenzo family of Mill Creek and Catherine Blaylock and Jill Maccinnes of Bellevue filed suit in King County Superior Court against First American Title Insurance Co. and Pacific Northwest Title Co. of Washington.

The suit was filed two days after state Insurance Commissioner Mike Kreidler issued a report that said insurers regularly broke a state cap on inducements to real estate middlemen who could steer buyers their way, driving up policy costs.

(In October, Kreidler reported companies spending thousands of dollars courting real estate agents with food and drinks, tickets to sporting events and trips for golf, skiing and shopping. He said he decided not to seek penalties because of the pervasiveness of the problems and lack of resources in his office. Federal regulations ban title insurance companies from giving anything of value to reward referrals and bar real estate agents and others from receiving anything of value in return for referrals.)

In November 22, 2006, other lawsuits were filed against Commonwealth Land Title Insurance Co. and Chicago Title Insurance Co. and Transnation Title Insurance Co., alleging that the companies violated federal law.

What is Title Insurance?

The purpose of the land title registry is the following:
• To expertly examine titles and provide curative remedies for title issues
• To disclose all material facts (in writing) to interested parties.
• To actively promote fraud prevention in real estate transactions

Basically, title insurance provides protection against any problems that may arise from a property you purchase. Think of title insurance as the opposite of life insurance: it protects against things that have already happened, whereas life insurance protects you against something in the future.

Title Search

This is the process of examining all relevant records to confirm that the seller is in fact the legal owner of the property and that there are no liens or other claims outstanding out of the property. A search should discover any liens attached to the property such as taxes owed, unpaid construction costs and even missing heirs that could lay claim to the house. A search can also turn up easements that allow access to the property by utilities companies, such as power or water. And some searches will go back 50 years.

Usually title insurance is paid by the homeowner's association if you buy a condominium or apartment or co-op.

There are two types of title insurance:

1. Policies for lenders: protects the lender and is usually issued through a bank and required by any lender before issuing a loan.

2. Policies for owners: this policy protects the owner's investment.

If you have recently refinanced your home and title insurance was included as part of your loan, you may have been overcharged for title insurance.

Cheap auto insurance: Fact or fiction

Time and time again motorists in B.C. are regaled with horror stories of private auto insurance rate hikes and reassured they enjoy the lowest premiums thanks to the government run ICBC.

Unfortunately for the B.C. government no matter how many tales they tell a recent study separates fact from fiction about auto insurance in Canada. The report “Myths and Facts about Automobile Insurance in Canada” was prepared by former Canadian Taxpayers Federation (CTF) director Mark Milke for the Insurance Bureau of Canada.

Myth #1: Private sector auto insurance is more costly than government-provided insurance.

Milke’s research reveals that between 2000 and 2005, the average British Columbia premium ranged from the most expensive among the 10 provinces.

The same holds true for Manitoba where the government provides auto insurance.

In Alberta the private sector, not government is in the auto insurance business. And most anecdotal reports shore up the myth that private insurance is more expensive than government. But according to the data, B.C.’s premiums were higher than Alberta in every year between 2000 and 2005 except in 2003 when B.C.’s average premium was $2 less than Alberta’s.

Myth #2: Insurance quotes are the same as premiums paid.

There is a reason why most of the motorists and public at large believe that private auto insurance is more expensive than government provided insurance. Reports and studies on insurance are released without full disclosure or adequate context. Milke notes one such example in his study.

The Consumers’ Association of Canada (CAC) claims to estimate insurance costs in each province and then ranks them. However, the CAC simply averages insurance quotes to come up with its insurance cost figure.

What’s wrong with this approach? It doesn’t measure actual premiums paid it merely averages quotes not insurance costs, as it purports. For those provinces that enjoy private sector competition a broader set of pricing will be available because there is also a broader selection of insurance providers and options. An average of such quotes does not provide any indicator of insurance costs.

By Milke’s calculations, the CAC 2005 report exaggerated Alberta’s average premium by 67.7 per cent and Ontario’s by 80.7 per cent because it used quotes and not the actual premiums paid.

Myth #3: Province to province comparisons are like apples to apples comparisons.

Legal restrictions and regulations in each province affect the cost of providing insurance. Milke’s report also notes that the relative wealth of a population, type of optional coverage purchased, accident rates, demographics all impact the cost of providing auto insurance.

The myth of cheaper government auto insurance is just that, a myth.