Regional Oral History Office University of California The Bancroft Library Berkeley, California Kaiser Permanente Medical Care Program Oral History Project John G. Smillie, M.D. HISTORY OF THE KAISER PERMANENTE MEDICAL CARE PROGRAM An Interview Conducted by Ora Huth in 1985 Copyright (cj 1987 by The Regents of the University of California All uses of this manuscript are covered by a legal agreement between the University of California and John G. Smillie, M.D. dated March 28, 1985. The manuscript is thereby made available for research purposes . All literary rights in the manuscript, including the right to publish, are reserved to The Bancroft Library of the University of California at Berkeley. No part of the manuscript may be quoted for publication without the written permission of the Director of The Bancroft Library of the University of California at Berkeley. Requests for permission to quote for publication should be addressed to the Regional Oral History Office, 486 Library, and should include identification of the specific passages to be quoted, anticipated use of the passages, and identification of the user. The legal agreement with John G. Smillie, M.D. requires that he be notified of the request and allowed thirty days in which to respond. It is recommended that this oral history be cited as follows : John G. Smillie, M.D., "History of the Kaiser Permanente Medical Care Program," an oral history conducted in 1985 by Ora Huth, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 1987. Copy No. JOHN G. SMILLIE, M.D. TABLE OF CONTENTS John G. Smillie, M.D. PREFACE i INTERVIEW HISTORY vi BRIEF BIOGRAPHY ix I FAMILY BACKGROUND AND EDUCATION, 1917 TO 1943 1 Family Role Models for Medical Studies 2 Kaiser Pennanente Contacts as a Student and Intern, Early 1940s 3 Unusual Family Members 5 Carpinteria, Ruthie Bliss, and Marriage, 1935 to 1943 10 II U. S. ARMY SERVICE, 1943 TO 1946 13 The Medical Hospital Ship Platoon 13 The Homefront, and Mother Smillie 's Failing Health 16 Duty at the Wack Wack Country Club in the Philippines 17 Coming Home, and Reflections on a Sad Time 19 III MOVING ON TO PEDIATRICS PRACTICE AT KAISER PERMANENTE NORTH, 1946 TO 1952 21 Innovative Pediatrics: Residency at Los Angeles County General Hospital 21 Going to Work for the Permanente Medical Group, Early 1949 23 Practicing At the San Francisco Harbor Hosptial 25 More Family Background: The Smillie Children, and Grandchildren 27 IV REFLECTING ON EARLY EXPERIENCES WITH THE PERMANENTE MEDICAL CARE PROGRAM 31 Close Friends in the Early Days 36 The "Rooming In" Concept 37 Dr. Wally Cook, Bess Kaiser's Death, and Expansion to Walnut Creek 38 The San Leandro Clinic 40 Relationships Between San Francisco and Oakland Permanente Hospitals 42 The Teamwork Concept, Inspiring Leaders and Practice Principles 43 Dr. Sidney Garfield's Informal Administration 47 Relationships During the Years of Controversy 48 Clash Between the Doctors and the Kaiser Industries' Leadership 49 Ending Strife and Informal Practices Through Reorganization and Effective Leadership 50 Advantages and Disadvantages of Bigness and Organizing to Cope With it 54 Special Services and Hospital Design 56 More on Permanente People: Second Generation Doctors and Members 57 Devising an Acceptable Budget Through Dual Management 58 Organization for Supporting Services: Nursing, Pharmacies, and Laboratories 59 Recalling Dorothea Daniels: An Extraordinary Nurse 61 V THE DRAGERTON, UTAH STORY, 1952 64 VI MORE ON THE KAISER PERMANENTE MEDICAL CARE PROGRAM 68 Closing the Kaiser Foundation Nursing School in 1976 68 Massive Membership Growth in the 1950s 69 Longshoremen, Federal Employees, More Fringe Benefits, and Health Plan Dual Choice 70 VII CHIEF OF PEDIATRICS AT KAISER PERMANENTE MEDICAL CENTER, SAN FRANCISCO, 1954 TO 1961 73 Recruiting Physicians and Minorities 73 The Residency Program 76 Innovations to Cut Costs and Improve Practice 77 Department Chiefs as Communicators and Pivotal Leaders 80 VIII ASSISTANT PHYSICIAN IN CHIEF AND ASSISTANT CHIEF OF STAFF, 1957 TO 1961 83 Working with Dr. Morris Collen 83 Problems Filling the Chief of Pediatrics Slot 84 The Southern Venture: San Diego, 1961 86 The Medical Methods Research Project 89 IX PHYSICIAN IN CHIEF AND CHIEF OF STAFF, 1961 TO 1971 91 Problems Working With One Administrator 91 The Medical Group's Executive Committee, and Appointment of Chiefs of Service 92 Cooperation Between the Medical Group and the Health Plan 95 Recalling Major Responsibilities 96 A Staff Error in Late 1970 99 More on the Executive Committee Membership 101 X ASSIGNMENT TO THE CENTRAL OFFICE AND SPECIAL ACTIVITIES PRECEDING THAT MOVE, 1971 TO 1981 102 Assistant to the Executive Director 102 Retirement Service and Retirement Plan Innovations 102 Looking Back: The 1968-1969 Strike, and the Chicago Management Program, 1970 104 Long-Term Leadership With Health Care Associations and Programs 106 Special Assignments and Accomplishments 107 Physician Turnover Reporting 108 Physician Benefits and Procedures 109 Assistant to Dr. Bruce Sams 110 The Kaiser Permanente Committee, 1967 111 Governmental Relations Activities 113 High Opinion of the Kaiser Permanente Program 115 A Discriminatory Law: The Health Planning and Resources Development Act 116 The Medicare Amendment to the Social Security Act 118 Consultant to the Federal Office of Health Maintenance Organi zations, 1974 to 1975 119 More about the Kaiser Permanente Washington, D.C., Office 121 XI OVERVIEW: SPECIAL FRIENDS, AND PROGRAM CHALLENGES AND RESPONSE 124 Friendship With Dr. Sidney Garfield 124 Relationships With the Medical Associations 126 Representing the Doctors in the Central Office: The Relationship With Dr. Clifford Keene 128 Organization of the Central Office 130 Growing Competition From New Health Maintenance Organizations (HMOs) 131 XII THE RETIREMENT YEARS: AN ACTIVE LIFE IN CARPINTERIA, CALIFORNIA 133 Continuing Consulting, the Avocado Ranch, and Civic Activities 133 TAPE GUIDE 136 APPENDIX Curriculum Vitae 137 BIBLIOGRAPHY 140 INDEX 142 Interviews Kaiser Permanente Medical Care Program David Adelson Morris Collen, M.D. Wallace Cook, M.D. Cecil C. Cutting, M.D. Alice Friedman, M.D. Lambreth Hancock Frank C. Jones Raymond M. Kay, M.D. Clifford H. Keene, M.D. Benjamin Lewis, M.D. George E. Link Berniece Oswald Sam Packer, M.D. Wilbur L. Reimers, M.D. Ernest W. Saward , M.D. Harry Shragg , M.D. John G. Smillie, M.D. Eugene E. Trefethen, Jr. Avram Yedidia PREFACE Background of the Oral History Project The Kaiser Permanente Medical Care Program recently observed its fortieth anniversary. Today, it is the largest, one of the oldest, and certainly the most influential group practice prepayment health plan in the nation. But in 1938, when Henry J. and Edgar F. Kaiser first collaborated with Dr. Sidney Garfield to provide medical care for the construction workers on the Grand Coulee Dam project in eastern Washington, they could scarcely have envisioned that it would attain the size and have the impact on medical care in the United States that it has today. In an effort to document and preserve the story of Kaiser Permanente 's evolution through the recollections of some of its surviving pioneers, men and women who remember vividly the plan's origins and formative years, the Board of Directors of Kaiser Foundation Hospitals sponsored this oral history project. In combination with already available records, the interviews serve to enrich Kaiser Permanente 's history for its physicians, employees, and mem bers, and to offer a major resource for research into the history of health care financing and delivery, and some of the forces behind the rapid and sweeping changes now underway in the health care field. A Synopsis of Kaiser Permanente History There have been several milestones in the history of Kaiser Pennenente. One could begin in 1933, when young Dr. Sidney Garfield entered fee-for- service practice in the southern California desert and prepared to care for workers building the Metropolitan Water District aqueduct from the Colorado River to Los Angeles. Circumstances soon caused him to develop a prepaid approach to providing quality care in a small, well-designed hospital near the construction site. The Kaisers learned of Dr. Garfield 's experience in health care financ ing and delivery through A. B. Ordway, Henry Kaiser's first employee. When they undertook the Grand Coulee project, the Kaisers persuaded Dr. Garfield to come in 1938 to eastern Washington State, where they were managing a consortium constructing the Grand Coulee Dam. Dr. Garfield and a handful of young doctors, whom he persuaded to join him, established a prepaid health plan at the damsite, one which later included the wives and children of workers as well as the workers themselves. During World War II, Dr. Garfield and his associates some of whom had followed him from the Coulee Dam project continued the health plan, again ii at the request of the Kaisers, who were now building Liberty Ships in Rich mond, California, and on an island in the Columbia River between Vancouver, Washington and Portland, Oregon. The Kaisers would also produce steel in Fontana, California. Eventually, in hospitals and field stations in the Richmond/Oakland communities, in the Portland, Oregon/Vancouver, Washington areas, and in Fontana, the prepaid health care program served some 200,000 shipyard and steel plant employees and their dependents. By the time the shipyards shut down in 19A5, the medical program had enough successful experience behind it to motivate Dr. Garfield, the Kaisers, and a small group of physicians to carry the health plan beyond the employees of the Kaiser companies and offer it to the community as a whole. The doctors had concluded that this form of prepaid, integrated health care was the ideal way to practice medicine. Experience had already proven in the organization's own medical offices and hospitals the health plan's value in offering quality health care at a reasonable cost.