Kaiser Permanente workers are on strike. Here’s what makes it such a unique health care company


By Samantha Delouya | CNN

Los Angeles  — On Wednesday, thousands of unionized health care employees walked off the job after failed contract negotiations with their employer, Kaiser Permanente, a company whose business model is distinctive, compared to most health care providers in the United States.

Here’s what you should know about the medical system.

RELATED: Striking Bay Area Kaiser workers seek higher wages, better staffing

Kaiser is funded by membership fees

Unlike traditional health care providers in the United States, Kaiser operates both as an insurance plan and a provider of all care covered by that plan. Patients (or their employers) pay a membership fee to Kaiser Permanente to access its services. That means that although thousands of workers are on strike at Kaiser, the company will continue to collect money from membership fees.

“They have members, they have subscribers and so they will continue to get their monthly payments,” said John August, former executive director of the Coalition of Kaiser Permanente Unions.

Founded in 1945 in Oakland, California, Kaiser Permanente is one of the nation’s largest not-for-profit health providers. It operates 39 hospitals and 622 medical offices across California, Colorado, the District of Columbia, Georgia, Hawaii, Maryland, Oregon, Virginia and Washington. It also employs nearly 213,000 employees and has a membership of 12.7 million, according to Kaiser’s website.

Members are mainly locked in to using Kaiser health workers

Kaiser’s membership dues set it apart from America’s traditional “fee-for-service” health care model, in which a doctor or health care provider is paid a fee for each service they perform.

Kaiser was designed to be a one-stop shop for all patients’ needs. Members can access a wide array of services through the system, including primary care, lab testing, telemedicine, mental health care, pharmacy services and even cosmetic treatments. However, except for emergencies and special cases, any care outside Kaiser Permanente’s system is not covered.

“If you join Kaiser Permanente, you are saying, ‘I’m going to see Kaiser doctors, and I’m going to go to Kaiser hospitals,’” said Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research.

Proponents of Kaiser Permanente argue that its fixed membership fees offer a financial incentive to focus on preventative care and keep patients healthy rather than performing a high volume of costly medical procedures.

“One of the reasons that Kaiser has grown over the last few decades is because they offer quality care at an affordable price,” Kominski said.

It’s a nonprofit entity

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