Kaiser Permanente, meet Eugene

Sept. 13--Starting early next year, local patients with Kaiser Permanente health plans will be able to see doctors and dentists at new Kaiser clinics in the Eugene-Springfield area.

Kaiser, one of the nation's largest nonprofit health plans, is expanding to Eugene, bringing another option and more competition to the fast-changing health care market in Lane County.

On Jan. 4, Kaiser plans to open its first facilities in Eugene -- a dental clinic near Valley River Center and a medical clinic downtown in the former site of the Eugene Public Library.

Kaiser is based in Oakland, Calif., and has 10 million members in nine states, including about 8 million members in its home state of California and half a million in Washington and Oregon.

Kaiser is preparing to grow its market share in Lane County and has already started offering commercial dental plans here. It hopes to start selling commercial medical plans here in 2017, said Chris Overton, Kaiser's senior director for Lane County.

Kaiser brings an HMO, or health maintenance organization, type of opportunity to town, local health insurance agents said.

In an HMO, a patient typically has a primary care doctor who is the gatekeeper for referrals to specialists and other services in the HMO's network. In contrast, a PPO, or preferred provider organization, generally offers a patient a broader choice of doctors and specialists. However, patients often pay more for that privilege -- in higher monthly premiums and out-of-pocket costs.

"Some people like (the HMO) model -- all incorporated, all-inclusive," said Chris Boone, president of Boone Insurance Associates, an independent life and health insurance broker based in Eugene. "Others want the PPO model -- more choice. It really depends on what the consumer wants in terms of access.

"I think (Kaiser will) bring competitive pricing and additional options for consumers locally," Boone said.

"You can better control costs in a fixed network system" such as Kaiser's, he said. "If you're able to reduce costs, then you're able to potentially provide better benefits or lower premiums."

It's unclear how receptive local consumers will be to Kaiser's model.

"We've not had Kaiser available south of Salem, so I don't know (the level of interest), unless people have had Kaiser in the past from another state or being in Portland," said Darby Giannone, co-owner of PBP Insurance, an insurance brokerage in Eugene and Portland.

Kaiser's arrival in the local market also will bring a little relief for the local shortage of primary care doctors, brought on by a wave of retirements and a surge in demand from newly insured patients under the federal Affordable Care Act and Medicaid expansion. Kaiser plans to bring in four additional physicians initially.

But first, Kaiser is working to get its local clinics up and running.

It recently announced that it will set up its dental clinic in the former Fletcher's for Children retail space near Valley River Center. Kaiser is in the midst of renovating the leased space and hiring a dentist, hygienist and five support staff, said Dr. Ken Wright, who manages Kaiser's dental services in the Northwest.

In the dental clinic's first year of operation, which will begin Jan. 4, Kaiser plans to expand the 5,500-square-foot clinic from four operatories, or offices, to eight, which will entail hiring a second dentist and hygienist and additional support staff, Wright said.

The dental clinic initially will serve about 2,500 Kaiser members -- 1,500 dental PPO members in Lane County and about 1,000 University of Oregon students who have medical and dental coverage through their parents' Kaiser plans.

Less than three miles away from the dental clinic, Kaiser is transforming the basement and first floors of the former public library building in downtown Eugene into a medical clinic.

The medical clinic also is scheduled to open Jan. 4. Initially, it will have 15 employees, including three primary care doctors from other Kaiser locations, and a fourth doctor Kaiser is recruiting, Overton said,

This clinic will start out serving 6,000 patients. About 4,000 of them are University of Oregon students who are on their parents' Kaiser health plans in California, Portland or other parts of the country. But Kaiser said it also plans to respond to the urgent need for more primary care services for members of the Oregon Health Plan -- Oregon's version of Medicaid.

Kaiser is working with Trillium Community Health Plan, the Coordinated Care Organization that manages services to Medicaid patients in Lane County, to serve about 2,000 Oregon Health Plan patients, Overton said.

The clinic will open with a couple hundred OHP patients, then will gradually bring more on board until the clinic is serving 2,000 OHP patients next summer, he said.

OHP patients will be referred to specialists within Trillium's network, Overton said.

Kaiser patients will have a choice of being referred to Kaiser specialists in Salem or to specialists in Lane County who are in the Kaiser network, Overton said.

Kaiser officials plan for the medical clinic to eventually occupy all of the 38,000-square-foot former library building, with additional services, such as a pharmacy and radiology, Wright said. Kaiser is leasing the building from local owners BHK Enterprises LLC. The lease expires on June 30, 2017, and Kaiser has an option to buy the property, according to Lane County property records.

Kaiser has yet to secure a contract with a local hospital -- McKenzie-Willamette Medical Center in Springfield or PeaceHealth's Sacred Heart Medical Centers in Springfield and Eugene -- to take Kaiser patients. That is delaying regulator approval for Kaiser to sell commercial health insurance plans in Lane County, Overton said.

"From my perspective, being the (Kaiser) leader of Lane County, I'm open to doing business with either and both hospitals," he said. "I personally don't have an opinion about one vs. the other."

Overton said talks with the hospitals are taking some time because there has been turnover in leadership at Kaiser and at the hospitals.

Also, PeaceHealth has wanted to talk about agreements with Kaiser in all regions where their markets overlap, whereas Kaiser wants to focus on Lane County, Overton said.

"That statement isn't intended to say someone's opinion is right or wrong," he said. "Getting alignment of what we want to talk about is a challenge."

When asked whether Kaiser would consider opening its own hospital here, Overton answered with a definitive no.

"That's not in any plan," he said.

Overton said he didn't know whether Kaiser would consider contracting with a hospital outside of Eugene-Springfield, such as those in Corvallis or Roseburg, if it can't come to an agreement with one here.

"For now, we want to focus on what's here," he said.

To increase awareness of its presence, Kaiser has started a local marketing campaign.

Its trike-powered treat cart has been giving away Julie's Organic sorbet bars at Lane County Farmers Market, Sprout! Marketplace, local concerts and pools.

Kaiser also is doing some marketing around UO football as a way to connect with UO students, who are a big part of Kaiser's existing local membership, as well as with residents from the Portland market who are watching the games, Overton said.

"When we looked at the analytics of who goes to those games, there's a lot of people from Portland," he said. "It was just kind of a natural overlap."

Kaiser Permanente has its roots in the health-care programs for Kaiser industrial companies in construction, ship building and steel manufacturing. The plan opened to public enrollment in 1945.

Kaiser reported annual operating revenue of $56.4 billion last year, up 6 percent from 2013.

Follow Sherri on Twitter @sburimcdonald . Email [email protected] .

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