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http://web.archive.org/web/20021009124021/http://www.sfgate.com/   
Kaiser Faces Lawsuit Over Ad Campaign
Consumer group calls HMO's membership drive misleading 
Tom Abate, Chronicle Staff Writer
Tuesday, March 16, 1999 
1999 San Francisco Chronicle 
 

A consumer group backed by Ralph Nader is filing a novel lawsuit today that alleges Kaiser Permanente made false advertising claims about its quality of care to recruit new members. 

The suit, which will be filed in California Superior Court in San Francisco, alleges that Kaiser was supposedly forcing doctors to cut costs at the same it was spending $60 million a year to attract new members with ads claiming that doctors, not administrators, were in charge of care. 

``If that's not a lie, I don't know what is,'' said Jamie Court, with Consumer's for Quality Care, a Santa Monica group that is affiliated with Nader. The case is being handled by the San Diego law firm of Milberg Weiss, which has specialized in filing class action lawsuits against high-tech firms for alleged stock fraud. 

Kaiser officials, who have not yet seen the suit, reacted angrily to the charges. ``Anyone can file a lawsuit,'' said Francis J. Crosson, executive director of the Permanente Federation, the partnership that governs the 10,000 doctors who practice at Kaiser facilities. 

``In fact, doctors are in charge of care at Kaiser Permanente,'' Crosson said. ``This outrageous lawsuit attacks the hard-earned reputation of thousands of Kaiser Permanente physicians.'' 

According to consumer and health industry groups, the lawsuit is apparently the first of its kind involving allegations of misleading advertising by an HMO in a membership drive. In this case, the suit charges that Kaiser has recruited 500,000 new members since it launched its $60-million-a-year ad campaign in 1995. 

The campaign, which allegedly represented a 700 percent increase over Kaiser's 1992 ad spending, used television and other media to get across the message that, as one ad said: ``At Kaiser Permanente your medical care is between you and your doctor, with no interference from anyone.'' 

But, the suit will allege, while Kaiser was advertising noninterference, its administrators were reducing the HMO's medical budget and talking about other cost-cutting steps. 
 

The suit cites two incidents to support the allegations. The first is a December 1995 budget-cutting speech given by Kaiser official Dr. John Vogt. 
 

Among other things, Vogt allegedly implied that Kaiser had changed the protocol that doctors follow when deciding when to send a patient to the hospital after complaints about chest pains. 
 

The lawsuit quotes Vogt as saying ``The reason we're revising that protocol now is because our (hospital) utilization exploded.'' 

Kaiser Permanate's Crosson called Vogt's comments ``stupid remarks'' made by a low- level employee who did not represent Kaiser policy. ``They have been taken out context time and again to make the organization look bad,'' Crosson said. 

The lawsuit also cites a Jan. 29, 1996, e-mail from 56 Kaiser doctors who allegedly complained about ``drastic cost-cutting and sweeping changes . . . that negatively affect patients and staff.'' 

Crosson said he was unfamiliar with the e-mail and couldn't respond to its charges. He characterized the lawsuit as a ``big lie'' meant to embarrass Kaiser at a time when the state Legislature is considering new HMO legislation. 

Court said attorneys are also prepared to call several unnamed Kaiser doctors as ``expert witnesses'' to substantiate allegations that executives interfered with patient-care decisions by doctors. 

The lawsuit is filed on behalf of new Kaiser members who were supposedly wronged by the allegedly misleading ads. It seeks unspecified compensatory and punitive damages, an immediate halt to Kaiser's current ad campaign and corrective advertising to set the record straight. 
 
 

1999 San Francisco Chronicle  Page C1