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Letter KaiserHalvorson 6 28

Letter KaiserHalvorson 6 28

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Published by Ana Beatriz Cholo

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Published by: Ana Beatriz Cholo on Jun 29, 2011
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06/29/2011

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From:
Rick Jacobs <rick@couragecampaign.org>
Date:
Wed, 22 Jun 2011 16:31:24 -0700
To:
George Halvorson <George.C.Halvorson@kp.org>
Cc:
John Garcia < john.garcia@kp.org>
Subject:
Follow Up with John GarciaDear Mr. Halvorson:Mr. Garcia and I spoke a few hours ago. He said that he speaks on your behalf, but he could notprovide answers. We have learned with other very large corporations that telephonecommunication often gets lost or misconstrued, so I summarize here my recollection of ourconversation. Since Mr.Garcia said he'd have to check with lots of people before responding tostraightforward questions, I address this to you directly, as the Chief Executive Officer.In the interests of fostering a dialogue, Courage Campaign invites you to participate in an openforum conference call to advance the understanding of our 700,000 members and the generalpublic as to the following.1.Kaiseris a not-for-profit company that I and all California and US taxpayers subsidize. Assuch, it must operate in the public interest. Why shouldKaiserenjoy that status if it usestaxpayer subsidy dollars to "lobby" the legislature and the governor to the tune of $700,000(this year, as I understand) in opposition to regulation? How does your opposition to publicinput and regulation further my subsidy of you?2.Kaiserhas made over $5 billion in profits since the beginning of 2009. It has made $921million in profit in the first quarter of 2011, more than $10 million per day.Kaiserpays nofederal, state, or local taxes on that profit. As example, to address only one portion of Kaiser'spotential tax liability, if Kaisersimply paid state corporate income taxes at the same rate asother California for-profit service providers, our state would have received nearly $450 million intax revenues for the period between January 1, 2009 and March 30, 2011. Yet even though allCalifornians subsidize you, you refuse to allow us to participate in how you charge your policyholders and what you do with money that is given to you as part of the public trust. Why is thatappropriate or fair?3. You are compensated nearly $8 million per year, which is greater than the mediancompensation for Fortune 500 CEOs, yet your company also benefits from a taxpayer subsidyand from lack of regulation. Why is your compensation as head of a not-for-profit public trustappropriate or fair to the taxpayers and your policy holders?4. You have refused to negotiate in good faith with 4,000 professionals for over a year. Theystate that your lack of willingness to enter into good faith negotiations harms policy holdersafety. How is your unwillingness to compensate these employees fairly, with at least onepension plan when you and your colleagues benefit from as many as eight different plans, goodfor tax payers, policy holders and the community at large? Do you believe that you are infinitelymore valuable than say a respiration therapist or nurse, such that you benefit from multiplepension plans while that healthcare professional, who makes life and death decisions every day,receives no pension plan?
 
5. Mr. Garcia said thatKaiserdoes not believe that politicians have enough of a long-term viewto determine appropriate rates. He said thatKaiseralone has that ability. While arrogant, thisassertion might be taken slightly more seriously if you did not enjoy a taxpayer subsidy. At leastMr. Garcia could say with a straight face that a for-profitKaisermust make money for itsshareholders, so it opposes regulation which could make less money for shareholders. But youare a not-for-profit. You operate with my money and that of 36 million other Californians andindeed all Americans. How is it even conceivable to suggest that the people we elect to publicoffice, who are accountable to all of us in elections, have a lesser interest in the public goodthanKaiser?6. Mr. Garcia said thatKaiserprovides excellent service to its patients and rate payers. I hopethat is true. How do you decide the appropriate amount of money to charge your customers,particularly given your immense profits and executive compensation packages? Is it good formore than 300,000 California policy holders for you to raise rates on them by as much as 23% in2011, even while your company makes so much money? Why do you distrust public officials tohave a role in determining what is fair and just?7. Mr. Garcia said thatKaiserdoes "all sorts of things" in the community that makeKaiser  popular. Those "things," according to Mr. Garcia, include charitable donations. That's great. Domore. As I told Mr. Garcia, Exxon also does those "things" and, in fact, multiple studies suggestthat for-profit healthcare providers actually match or even exceed the "community benefits"provided by their not-for-profit competitors. At least Exxon and for-profit healthcare providersdo those "things" without legally taking money out of my pocket. Warren Buffett, the CEO of Berkshire Hathaway, opposes corporate donations because he says that shareholders shouldmake money and give as they wish. In his view, corporations should not be in the business of determining the use of shareholder money other than to make money. As a not-for-profit,Kaiserdetermines the use of taxpayers' and rate payers' money without the burden of shareholder accountability or various financial disclosure requirements that are in fact greaterfor publicly traded for-profit corporations than for non-profits (as limited as requirements forpublicly traded corporations are themselves). To the extent that taxpayers, by virtue of Kaiser'stax exemptions, are stakeholders inKaiser's activities, why should we believe thatKaiseris a better allocator of resources for our good than school districts, county departments of publichealth, or other public service providers that are currently being starved to death for lack of revenue?8. Mr. Garcia said thatKaiserenjoys a good public image. I am sure that is true. And that is partof the problem.Kaiseris using goodwill it has established over the years to evade publicscrutiny, deny the public's right to regulate rate increases and to determine on its own what itwill do with its enormous profits. In short,Kaiseris unaccountable and uses its considerablelobbying budget to keep it that way. The $700,000Kaiserhas spent this year on lobbyingagainst AB 52 and for legislation that helps you remain above state lawmakers and the public isitself publicly subsidized. How can you justify that?As a courtesy and sign of respect, I ask that you not respond to me and Courage's membersthrough a phalanx of PR flacks, of which you no doubt have many. Since AB 52 will beconsidered by the Senate committee next week, time is of the essence. Therefore, we lookforward to a reply not later than 4:00PM on Friday. Delays in response will make clear that youdo not take our members or frankly California taxpayers seriously.

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