Lawrence Accomplished Much As Kaiser Permanente’s CEO

John A. Marcille

There are probably jobs that are more thankless than being the CEO of a health plan, but none come readily to mind. People like David M. Lawrence, MD — outgoing head of Kaiser Permanente, and the subject of our cover story/Q&A package — might as well walk around with targets pinned to their backs.

Of course, that goes with the territory, and at $2.2 million compensation in 2000, the last year the health plan disclosed Lawrence’s salary, he was well compensated, if not at the level of some commercial plan executives.

As far as we’re concerned, Lawrence changed Kaiser Permanente just enough. It’s more bottom-line oriented than when he took over because a company in Kaiser’s position needs to be responsive to competitive market forces to survive. On the other hand, as Uwe Reinhardt, Princeton professor and health care economist, points out, Lawrence kept Kaiser Permanente true to its group-model roots.

It was not an easy decade-long ride for Lawrence, what with expansion attempts that didn’t pan out, financial losses over a three-year stretch, and a focus on information technology that rubbed some in the organization the wrong way.

Still, taking the easy course — electing to be a caretaker CEO during the turbulent rise of managed care — would have gained Kaiser little, and might very well have cost it everything. Perhaps Reinhardt overstates the matter when he says that the “real tragedy of managed care could be that there weren’t enough Kaisers. That is why managed care never worked.”

We believe it’s too soon to speak of managed care in the past tense. However, we do agree with Reinhardt that, thanks to Lawrence, the future certainly looks rosy for Kaiser Permanente.

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