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KAISER PERMANENTE REACHES AGREEMENT IN PRINCIPLE WITH THE CLEVELAND CLINIC FOUNDATION

 KAISER PERMANENTE REACHES AGREEMENT IN PRINCIPLE WITH
 THE CLEVELAND CLINIC FOUNDATION
 CLEVELAND, Dec. 9 /PRNewswire/ -- The following was released today by Kaiser Permanente:
 WHO: Kaiser Permanente
 The Cleveland Clinic Foundation
 WHAT: An agreement in principle to provide hospital and medical specialty referral services.
 WHEN: Up to three-year phase in period, including the conversion of Kaiser Permanente Parma hospital to a high acuity ambulatory center.
 WHY: Consolidate hospital and medical specialty referral services.
 Simplify use of hospital and medical specialty referral services.
 Opportunity to form an alliance with Cleveland Clinic physicians who share common philosophies, goals and incentives with Ohio Permanente Medical Group physicians.
 Kaiser Permanente has agreed in principle with The Cleveland Clinic Foundation to develop an affiliation in which The Cleveland Clinic will eventually provide the majority of hospital care and medical referral services to Kaiser Permanente Health Plan members, Kathryn Paul, senior vice president and regional manager for Kaiser Permanente, Dr. Ronald Potts, president and medical director of the Ohio Permanente Medical Group, and Dr. Floyd Loop, chairman of the board of governors of The Cleveland Clinic Foundation, announced today.
 "This agreement will align two leading health care organizations in Northeast Ohio and will provide a new pathway to delivering affordable, high quality care to the Northeastern Ohio community. This important new partnership provides a way for Kaiser Permanente to further enhance the value of our program to members and the community in Northeastern Ohio. It will take up to three years to accomplish the transition," Paul said.
 "We have taken this step after careful analysis to consolidate the majority of our hospital and specialty services at this well known medical institution in order to make services more convenient to members and to better manage our administrative costs," she continued.
 Kaiser Permanente's decision to develop a partnership with The Cleveland Clinic Foundation resulted from an intensive study of the various benefits and costs associated with different hospital and referral services delivery options.
 There was consideration given to building a Kaiser Permanente Foundation Hospital in a centrally located area, but this was eventually ruled out. "Given the available hospital beds and resources already in existence, it did not seem in the best interests of our community to pursue building our own hospital," added Paul.
 The goals of Kaiser Permanente, according to Potts, are to:
 -- Continue to provide quality care in a cost effective manner.
 -- Consolidate most hospital and medical specialty referral services in one location.
 -- Simplify the use of hospital and specialty referral services for members who are spread over nine counties.
 -- Keep costs down for members.
 -- Integrate the Ohio Permanente Medical Group (OPMG) with medical specialists outside its group practice.
 -- Provide a unique environment for two medical groups who share common philosophies, incentives and goals to learn from one another while providing services to Kaiser Permanente members. The Cleveland Clinic Foundation is the sixth largest and ninth oldest medical group in the United States with 550 physicians. The OPMG is the 25th largest medical group with 250 physicians.
 "The new partnership will provide a unique opportunity for Ohio Permanente Medical Group physicians to work with The Cleveland Clinic Foundation physicians, resulting in a broader pool of specialists to meet every kind of health care need for our members," according to Potts. "OPMG will also be able to practice as a group more effectively by consolidating services at one location. This is a unique opportunity to begin a consistent relationship with a single medical group. The Cleveland Clinic Foundation physician group will provide reliable support, constant communication and research/education opportunities to OPMG physicians."
 Kaiser Permanente currently spends in excess of $72 million annually for hospital and specialty referral care.
 Under this new arrangement, almost 75 percent of Kaiser Permanente hospital and specialty referral care will be provided at The Cleveland Clinic, including some emergency servcies at a new $5 million emergency department to be constructed by the clinic to serve the Greater Cleveland community.
 Market research, according to Paul, indicates that the population of Greater Cleveland identifies strongly with The Cleveland Clinic Foundation as one of the world's finest health care facilities. Surveys also showed that the level of care at the clinic was viewed so favorably that members would have little problem with receiving care from a central location accessible to all.
 "The new arrangement with The Cleveland Clinic Foundation," Paul explained, "was a price neutral decision and will not increase costs to members. Kaiser Permanente studies indicated that the partnership would help stimulate membership growth the organization would not achieve otherwise."
 "We are pleased to have been chosen by Kaiser Permanente to provide hospital services and referred specialty care for its members," said Floyd D. Loop, M.D., chairman, the board of governors, of The Cleveland Clinic Foundation. "This association will pair Kaiser Permanente's high quality primary care network with the clinic's high quality specialty care to establish a consolidated managed care program that will be unsurpassed in the nation."
 Because the majority of hospital services will be provided by The Cleveland Clinic Foundation, Kaiser Permanente has made the decision to begin planning for a conversion of hospital services at its Parma hospital. Up to three years of operational planning will be needed to plan and convert the Parma hospital to a high acuity ambulatory center with a 24-hour emergency room and observation capability. This conversion should take place by December 1994. Until that time, Kaiser Permanente plans to continue hospital services at its Parma hospital and will continue to recruit nursing staff. The Kaiser Permanente Parma medical offices will remain open as usual.
 "Kaiser Permanente's 82-bed Parma hospital will be better utilized as an ambulatory care facility," said Potts. "It will be much more effective and efficient to provide for the growing tertiary care needs of our members by enabling OPMG physicians to practice as a group at one location, rather than having services scattered at various locations as in the past."
 Kaiser Permanente officials also expect that the new arrangement with The Cleveland Clinic, along with the establishment of additional medical facilities, including Westlake in 1993, will provide enough membership growth to increase employment opportunities for Kaiser Permanente staff.
 While 75 percent of services will be provided at The Cleveland Clinic, maternity services are expected to stay at Fairview General and MetroHealth Saint Luke's Medical Center. In 1990, 1,100 infants were delivered at St. Luke's and 1,000 at Fairview General. Members who live in Lake County will continue to be admitted to Lake East and Lake West hospitals, and members in Summit County will be admitted to Akron City Hospital and Children's Hospital Medical Center of Akron, except for sub-specialty care.
 Members will continue receiving services as usual from the following Kaiser Permanente medical offices including: Cleveland, Cleveland Heights, Bedford, Beachwood, Parma, Lakewood, Strongsville, North Olmsted, Willoughby and Akron.
 Kaiser Permanente also will continue to demonstrate its leadership in providing community services with such programs as its "Transition Plan," which provides accessible health coverage to qualifying unemployed and uninsured Ohio residents, along with its Educational Theater program, which deals with pertinent health issues and its partnership with the Cuyahoga County Board of Health in providing space for its childhood immunization program.
 Kaiser Permanente, the largest pre-paid health maintenance organization in the United States, evolved from an industrial health care program for construction, shipyard and steel mill workers for Kaiser industrial companies during the late 1930s and 40s, and was opened to public enrollment in 1945.
 Kaiser Permanente currently provides medical services to 6.5 million members, or one out of every 40 Americans, and more than 205,000 members in Northeast Ohio.
 Kaiser Permanente came to Cleveland in 1969 when it was invited to take over the Community Health Foundation. Kaiser Permanente opened its own acute general hospital and medical center in Parma in 1970, and then two years later, opened another hospital on Martin Luther King Jr. Drive. This hospital converted into an urgent care and medical office facility in 1986.
 -0- 12/9/91
 /CONTACT: Robert Baker of Kaiser Permanente, 216-621-5600; Holli Birrer of The Cleveland Clinic Foundation, 216-444-0141; or Nancy Depke of Depke and Associates, 216-574-9050, for Kaiser Permanente/ CO: Kaiser Permanente ST: Ohio IN: INS SU:


LC -- CL011 -- 0676 12/09/91 16:00 EST
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Date:Dec 9, 1991
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