Kaiser Faces Lawsuit Over Ad
group calls HMO's membership drive misleading
Abate, Chronicle Staff Writer
March 16, 1999
San Francisco Chronicle
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.
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
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
Nader. The case is being handled by the San Diego law firm of Milberg
which has specialized in filing class action lawsuits against high-tech
firms for alleged stock fraud.
officials, who have not yet seen the suit,
reacted angrily to
the charges. ``Anyone can file a lawsuit,'' said Francis J. Crosson,
director of the Permanente Federation, the partnership that governs the
10,000 doctors who practice at Kaiser facilities.
fact, doctors are in charge of care at Kaiser
said. ``This outrageous lawsuit attacks the hard-earned reputation of
of Kaiser Permanente physicians.''
to consumer and health industry groups,
the lawsuit is apparently
the first of its kind involving allegations of misleading advertising
an HMO in a membership drive. In this case, the suit charges that
has recruited 500,000 new members since it launched its
ad campaign in 1995.
campaign, which allegedly represented a 700
percent increase over
Kaiser's 1992 ad spending, used television and other media to get
the message that, as one ad said: ``At Kaiser Permanente your medical
is between you and your doctor, with no interference from
suit will allege, while Kaiser was
its administrators were reducing the HMO's medical budget and talking
other cost-cutting steps.
suit cites two incidents to support the
allegations. The first is
a December 1995 budget-cutting speech given by Kaiser official Dr. John
other things, Vogt allegedly implied that
Kaiser had changed the
protocol that doctors follow when deciding when to send a patient to
hospital after complaints about chest pains.
lawsuit quotes Vogt as saying ``The reason
we're revising that protocol
now is because our (hospital) utilization exploded.''
Permanate's Crosson called Vogt's comments
made by a low- level employee who did not represent Kaiser policy.
have been taken out context time and again to make the organization
bad,'' Crosson said.
lawsuit also cites a Jan. 29, 1996, e-mail
from 56 Kaiser doctors
who allegedly complained about ``drastic cost-cutting and sweeping
. . . that negatively affect patients and staff.''
said he was unfamiliar with the e-mail and
to its charges. He characterized the lawsuit as a ``big lie'' meant to
embarrass Kaiser at a time when the state Legislature is considering
said attorneys are also prepared to call
several unnamed Kaiser
doctors as ``expert witnesses'' to substantiate allegations that
interfered with patient-care decisions by doctors.
lawsuit is filed on behalf of new Kaiser
members who were supposedly
wronged by the allegedly misleading ads. It seeks unspecified
and punitive damages, an immediate halt to Kaiser's current ad campaign
and corrective advertising to set the record straight.
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