66/1 6~7 n&bu^ University of California Berkeley Regional Oral History Office University of California The Bancroft Library Berkeley, California Kaiser Permanente Medical Care Program Oral History Project Clifford H. Keene, M.D. HISTORY OF THE KAISER PERMANENTE MEDICAL CARE PROGRAM An Interview Conducted by Sally Smith Hughes 1985 1986 the Copyright ( by Regents of the University of California All uses of this manuscript are covered by a legal agreement between the University of California and Clifford H. Keene, M.D., dated April 18, 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 Clifford H. Keene, 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 : Clifford H. Keene, M.D. , "History of the Kaiser Permanente Medical Care Program," an oral history conducted in 1985 by Sally Smith Hughes, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 1986. Copy No. CLIFFORD H. KEENE, M.D. Kaiser Permanente Medical Care Program Interviews to be Completed in 1986 Cecil C. Cutting, M.D. Frank C. Jones Raymond M. Kay, M.D. Clifford H. Keene, M.D. George E. Link Ernest W. Saward, M.D. John G. Smillie, M.D. Eugene E. Trefethen, Jr, Avram Yedidia TABLE OF CONTENTS Clifford H. Keene, M.D. PREFACE i AUTHOR'S FOREWORD by Clifford H. Keene, M.D. vii INTERVIEW HISTORY BRIEF BIOGRAPHY I FAMILY BACKGROUND AND EDUCATION 1 Parents, Brother and Sister 1 Grammar School 2 Dissolution of the Family 2 High School Years 3 Undergraduate at the University of Michigan, 1927-1931 5 Vacation Jobs in the Steel Industry 6 Decision to go into Medicine 7 Medical Student at the University of Michigan, 1930-1934 8 Internship and Residency at University Hospital, University of Michigan, 1934-1940 11 Cancer Consultant for the State of Michigan 12 A Resection of the Infant Bowel 13 Surgical Practice in Wyandotte, Michigan, 1940-1942 14 Dr. Frederick Coller and the American Board of Surgery 14 II ARMY SURGEON DURING WORLD WAR II 16 Chief Surgeon, Lovell General Hospital, Fort Devens, Massachusetts 16 The Surgical Replacement Depot 18 An Early Introduction to the Kaiser Permanente Health Care Program 18 Surgical and Medical Administrator, 24th Corps, Pacific Theatre 19 A Letter to Henry Kaiser 22 Return to the United States 24 III SURGEON IN THE KAISER ORGANIZATION, 1946-1953 25 Surgeon at Permanente Hospital, Oakland, 1946 25 Impressions of Sidney Garfield and other Kaiser Doctors 26 The Medical Program in 1946 27 The State Board of Medical Examiners and the Charge of Practicing Medicine without a License 29 Medical Director for Kaiser-Frazer Corporation, Willow Run, Michigan, 1946-1953 32 A Job Offer from United States Steel 38 An Encounter with Edgar Kaiser 39 An Invitation to Run the Kaiser Permanente Medical Care Program 40 The Breakfast Meeting with Sidney Garfield, Dec. 5, 1953 42 A Farewell Party 49 IV PRESIDENT AND CHIEF EXECUTIVE OFFICER, KAISER FOUNDATION HOSPITALS AND HEALTH PLAN 50 Getting Acquainted with the Medical Care Program 50 Garfield 1 s System of Management by Expediency 51 Interrelationships of the Kaisers and Garfields 53 Eugene Trefethen 55 Keene's Relationship with Garfield 56 Rabat Kaiser Institute 57 Kaiser Foundation Nursing School 59 Kaiser Foundation Research Institute 60 The AMA and Resolution 16 63 Cecil Cutting 64 Morris Collen 65 The Tahoe Period, Mid-1950s: Crisis in the Permanente Organization . 66 The Kaiser Industrial Occupational Medicine Program at Home and Abroad 71 The Central Office 73 Appointment as Vice President of Kaiser Industries and Vice President and General Manager of Hospitals and Health Plan, 1960 74 Expansion to Hawaii 75 Problems Associated with the Medical Care Program 78 Forming a New Medical Group 83 The Significance of Hawaii for the Kaiser Medical Care Program 85 Philip Chu 85 Ray Kay 87 Life as a Top Kaiser Executive 88 Dissension over Expansion of the Medical Care Program 90 The Tensions of Working for Mr. Kaiser 92 San Diego, 1961-1962 94 The Separation of the Industrial Medicine Programs and the Kaiser Permanente Medical Care Program 96 Reorganization 99 Expansion of the Hospitals and Health Plan Board 99 Selection of Personnel 100 Outside Members of the Hospitals and Health Plan Board 101 Expansion of the Medical Care Program to Other Regions 104 Cleveland 106 Denver 110 The Kaiser Pennanente Committee 112 The Medical Care Program Attains Credibility 113 Establishing Health Plan Rates 116 Relationships 117 Henry and Edgar Kaiser 117 Sidney Garfield 120 Felix Day 124 Frank Jones 124 Karl Steil 125 More on the Central Office 126 Relationships with External Groups 128 The Government Relations Department 128 Medicare and Medicaid 129 A Hill-Burton Grant 130 Medi-Cal 130 The Group Health Association of America 131 Significance of the Tahoe Agreement 132 Characterizing the Health Plan 133 The 1971 Symposium on the Kaiser System of Medical Care 134 Changes in the Medical Program 136 Preventive Health Care 137 Clifford Keener Honors and Achievements 138 TAPE GUIDE 143 APPENDIX - Interoffice Memorandum: Edgar Kaiser to Dr. C.H. Keene, October 9, 1964 144 Interoffice Memorandum: Henry J. Kaiser to Edgar Kaiser, October 12, 1964 145 Letter: Ernest W. Saward, M.D., to Dr. Clifford Keene, December 20, 1974 146 Achievements of C.H. Keene in the Kaiser Pennanente Medical Care Program 148 Publications: Clifford Keene, 1937-1984 150 Selected Addresses and Presentations: Clifford Keene, 1951-1982 153 Biographical data: June 12, 1973, March 10, 1982, February 27, 1985 156 Letter: James A. Vohs to Dr. Clifford Keene, January 8, 1985 160 INDEX 162 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 Garf ield 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 know and 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 members, 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 Permanente. One could begin in 1933, fifty-three years ago, when young Dr. Sidney Garf ield 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 facility near the construction site. The Kaisers learned of Dr. Garf ield' s experience in health care financing and delivery through A. B. Ordway, Henry Kaiser's first employee. When they undertook the Grand Coulee project, the Kaisers persuaded Dr. Gar field to come in 1938 to eastern Washington State, where they were managing a consortium constructing the Grand Coulee Dam. Dr. Garf ield, 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. ii A few years later, 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 at the request of the Kaisers, who were now building Liberty Ships in Richmond, California, and on an island in the Columbia River between Vancouver, Washington and Portland, Oregon. They would also produce steel in Fontana, California. Eventually, in hospitals and field stations in the Rich mond/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 1945, 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 the health plan's value in offering quality health care at a reasonable cost in the organization's own medical offices and hospitals.