Use Restrictions

All uses of this manuscript are covered by a legal agreement between the University of California and Cecil C. Cutting, M.D., dated July 30, 1985. The manuscript is thereby made available for research purposes. All literary rights in the manuscript, including the right to publish, are reserved to The Bancroft Library of the University of California at Berkeley. No part of the manuscript may be quoted for publication without the written permission of the Director of The Bancroft Library of the University of California at Berkeley.

Requests for permission to quote for publication should be addressed to the Regional Oral History Office, 486 Library, and should include identification of the specific passages to be quoted, anticipated use of the passages, and identification of the user. The legal agreement with Cecil C. Cutting, M.D., requires that he be notified of the request and allowed thirty days in which to respond.

It is recommended that this oral history be cited as follows:

Cecil C. Cutting, M.D., "History of the Kaiser Permanente Medical Care Program," an oral history conducted in 1985 by Malca Chall, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 1986.

Copy No. —

Kaiser Permanente Medical Care Program Interviews to be Completed in 1986

• Cecil C. Cutting, M.D.
• Frank C. Jones
• Raymond M. Kay, M.D.
• Clifford H. Keene, M.D.
• George E. Link
• Ernest W. Saward, M.D.
• John G. Smillie, M.D.
• Eugene E. Trefethen, Jr.
• Avram Yedidia

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Preface

Background of the Oral History Project

The Kaiser Permanente Medical Care Program recently observed its fortieth anniversary. Today, it is the largest, one of the oldest, and certainly the most influential group practice prepayment health plan in the nation. But in 1938, when Henry J. and Edgar F. Kaiser first collaborated with Dr. Sidney Garfield to provide medical care for the construction workers on the Grand Coulee Dam project in eastern Washington, they could scarcely have envisioned that it would attain the size and have the impact on medical care in the United States that it has today.

In an effort to document and preserve the story of Kaiser Permanente's evolution through the recollections of some of its surviving pioneers, men and women who know and remember vividly the plan's origins and formative years, the Board of Directors of Kaiser Foundation Hospitals sponsored this oral history project.

In combination with already available records, the interviews serve to enrich Kaiser Permanente's history for its physicians, employees, and members, and to offer a major resource for research into the history of health care financing and delivery, and some of the forces behind the rapid and sweeping changes now underway in the health care field.

A Synopsis of Kaiser Permanente History

There have been several milestones in the history of Kaiser Permanente. One could begin in 1933, fifty-three years ago, when young Dr. Sidney Garfield entered fee-for-service practice in the southern California desert and prepared to care for workers building the Metropolitan Water District aqueduct from the Colorado River to Los Angeles. Circumstances soon caused him to develop a prepaid approach to providing quality care in a small, well-designed hospital facility near the construction site.

The Kaisers learned of Dr. Garfield's experience in health care financing and delivery through A. B. Ordway, Henry Kaiser's first employee. When they undertook the Grand Coulee project, the Kaisers persuaded Dr. Garfield to come in 1938 to eastern Washington State, where they were managing a consortium constructing the Grand Coulee Dam. Dr. Garfield, and a handful of young doctors whom he persuaded to join him, established a prepaid health plan at the damsite, one which later included the wives and children of workers, as well as the workers themselves.

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A few years later, during World War II, Dr. Garfield and his associates--some of whom had followed him from the Coulee Dam project--continued the health plan, again at the request of the Kaisers, who were now building Liberty Ships in Richmond, California, and on an island in the Columbia River between Vancouver, Washington and Portland, Oregon. They would also produce steel in Fontana, California. Eventually, in hospitals and field stations in the Richmond/Oakland communities, in the Portland, Oregon/Vancouver, Washington areas, and in Fontana, the prepaid health care program served some 200,000 shipyard and steel plant employees and their dependents.

By the time the shipyards shut down in 1945, the medical program had enough successful experience behind it to motivate Dr. Garfield, the Kaisers, and a small group of physicians to carry the health plan beyond the employees of the Kaiser companies and offer it to the community as a whole. The doctors had concluded that this form of prepaid, integrated health care was the ideal way to practice medicine. Experience had already proven the health plan's value in offering quality health care at a reasonable cost in the organization's own medical offices and hospitals. Many former shipyard employees and their families also wanted to continue receiving the same type of health care they had known during the war.

Also important were the zeal and commitment of Henry J. Kaiser and his industry associates who agreed with the doctors about the program's values, and despite the antagonism of fee-for-service medicine, were eager for the success of the venture. Indeed, they hoped it might ultimately be expanded throughout the nation. In September, 1945, The Henry J. Kaiser Company established the Permanente Health Plan, a nonprofit trust, and the medical care program was on its way.

Between 1945 and the mid-1950s, even as membership expanded in California, Oregon, and Washington, serious tensions developed between the doctors and the Kaiser-industry dominated management of the hospitals and health plan. These tensions threatened to tear the Program apart. Reduced to the simplest form, the basic question was who would control the health plan--management or the doctors. Each had a crucial role in the organization. The symbiotic relationship had to be understood and mutually accepted.

From roughly 1955 to 1958, a small group of men representing management and the doctors, after many committee meetings and much heated debate, agreed upon a medical program reorganization, including a management-medical group contract, probably then unique in the history of medicine. Accord was reached because the participants, despite strong disagreements, were dedicated to the concept of prepaid group medical practice on a self-sustained, nonprofit basis.

After several more years of testing on both sides, a strong partnership emerged among the health plan, hospitals, and physician organizations. Resting on mutual trust and a sound fiscal formula, the Program has attained a strong national identity.

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The Oral History Project

In August 1983, the office of Donald Duffy, Vice President, Public and Community Relations for Kaiser Foundation Health Plan and Hospitals, contacted Willa Baum, director of the Regional Oral History Office, about a possible oral history project with twenty to twenty-four pioneers of the Program. A year later the project was underway, funded by Kaiser Foundation Hospitals' Board of Directors.

A project advisory committee, comprised of seven persons with an interest in and knowledge of the organization's history, selected the interviewees and assisted the oral history project as needed. Donald Duffy assumed overall direction and Darlene Basmajian, his assistant, served as liaison with the Regional Oral History Office. Committee members are John Capener, Dr. Cecil Cutting, Donald Duffy, Robert J. Erickson, Scott Fleming, Dr. Paul Lairson, and Walter Palmer.

By year's end, ten pioneers had been selected and had agreed to participate in the project. They are Drs. Cecil Cutting, Sidney Garfield, Raymond Kay, Clifford Keene, Ernest Saward, and John Smillie, and Messrs. Frank Jones, George Link, Eugene Trefethen, Jr., and Avram Yedidia.

Plans to interview Dr. Garfield and Dr. Wallace Neighbor, who had been at Grand Coulee with Dr. Garfield, were sadly disrupted by their deaths, a week apart in late 1984. Fortunately, both men had been previously interviewed. Their tapes and transcripts are on file in the Central Office of the medical care program.

The advisory committee suggested 1970 as the cutoff date for research and documentation, since by that time the pioneering aspects of the organization had been completed. The Program was then expanding into other regions, and was encountering a new set of challenges such as Medicare and competition from other health maintenance organizations.

Research

Kaiser Permanente staff and the interviewees themselves provided excellent biographical sources on each interviewee as well as published and unpublished material on the history of the Program. The collected papers of Henry J. Kaiser on deposit in The Bancroft Library were also consulted. The oral history project staff collected other Kaiser Permanente publications, and started a file of newspaper articles on current health care topics. Most of this material will be deposited in The Bancroft Library with the oral history volumes. A bibliography is attached.

To gain additional background material for the interviews, the staff talked to four Kaiser Permanente physicians, two of whom had left the program years ago: Drs. Martin Abel, Richard GeistTapes of these interviews have been deposited in the Microforms Division of The Bancroft Library., Emphraim KahnTapes of these interviews have been deposited in the Microforms Division of The Bancroft Library., and James SmithCopies will be deposited in The Bancroft Library..

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The staff also sought advice from the academic community. James Leiby, a professor in the Department of Social Welfare at UC Berkeley and an advocate of the oral history process, suggested lines of questioning related to his special interest in the administration of and relationships within public and and private social agencies. Dr. Philip R. Lee, professor of social medicine and director of the Institute for Health Policy Studies at the University of California Medical School, proposed questions concerning the impact of health maintenance organizations on medical practice in the United States.

Organization of the Project

The Kaiser Permanente Oral History Project staff, comprised of Malca Chall, Sally Hughes, and Ora Huth, met frequently throughout 1985 to assign the interviews, plan the procedures and the time frame for research, interviewing, and editing, and to set up a master index. Interviews of the first nine pioneers took place between February and June, 1985. During the following months the transcripts of the tapes were edited, reviewed by the interviewees, typed, proofread, indexed, copied, and bound.

Other pioneers who, at the time of this writing, have agreed to participate in the project are: Drs. Morris Collen, Wallace Cook, Alice Friedman, Benjamin Lewis, Sam Packer, Bill Reimers, Harry Shragg, and David Adelson, Lambreth (Handy) Hancock, Berniece Oswald.

The entire series will be completed during 1987.

Summary

This oral history project traces, from various individual perspectives, the evolution of the Kaiser Permanente Medical Care Program from 1938 to 1970. Each interview begins with a discussion of the individual's family background and education--those tangible and intangible forces that shaped his or her life. The conversation then shifts to the interviewee's actual participation in and observation of the significant events in the development of the health plan. Thus, the reader is treated not only to facts on the history of the Program, but to opinions about the personal qualities of the men and women--doctors, other health care professionals, lawyers, accountants, and businessmen--who, often against great odds, dedicated themselves to the development of a health care system which, without their commitment and skills, might not have resulted in the human and organizational achievement that the Kaiser Permanente Medical Care Program represents today.

The Regional Oral History Office was established to tape record autobiographical interviews with persons who have contributed significantly to recent California history. The office is headed by Willa K. Baum and is under the administrative supervision of James D. Hart, the director of The Bancroft Library.

14 January 1986

Regional Oral History Office
Berkeley, California

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Bibliography

Advisory Council. Minutes 1955-1956.

Cutting, Cecil C. Interview by Daniella Thompson, October 16, 1974.

De Kruif, Paul. Kaiser Wakes the Doctors New York: Harcourt, Brace and Company, 1949.

De Kruif, Paul. Life Among the Doctors New York: Harcourt, Brace and Company, 1949. (chapters XIII and XIV)

Fleming, Scott. Evolution of the Kaiser-Permanente Medical Care Program: Historical Overview. Oakland: Kaiser Foundation Health Plan, Inc., 1983.

Fleming, Scott. Conceptual Framework for Bancroft Library Oral History Project. 1984.

Fleming, Scott. Health Care Costs and Cost Control: A Perspective from an Organized System December 1977.

Fleming, Scott, and Douglas Gentry. A Perspective on Kaiser-Permanente Type Health Care Programs: The Performance Record, Criticisms and Responses Oakland: Kaiser Foundation Health Plan, Inc., January 1979.

Garfield, Sidney R. Interviews by Daniella Thompson, September 5, 6, 9, 10, 1974.

Garfield, Sidney R. Interviews by Miriam Stein, February 17, 1982 and June 7, 1984.

Garfield, Sidney R. The Coulee Dream: A Fond Remembrance of Edgar Kaiser. Kaiser Permanente Reporter January 1982 pp. 3-4.

Garfield, Sidney R., M.F. Collen and C.C. Cutting. Permanente Medical Group: 'Historical' Remarks. April 24, 1974.

Glasser, Susan, et al. Cultural Resources Catalogue

March 31, 1985.

Kaiser Foundation Medical Care Program Annual reports, 1960-1978. Oakland: Kaiser Foundation Health Plan, Inc.

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Kaiser-Permanente Medical Care Program Annual Report Oakland: Kaiser Foundation Health Plan, Inc. 1979-1985.

Kaiser Permanente Mission Objectives Report of the Kaiser Permanente Committee, February 2, 1985. Oakland: Kaiser Foundation Health Plan, Inc.

Kay, Raymond M. Historical Review of the Southern California Permanente Medical Group: Its Role in the Development of the Kaiser Permanente Medical Care Program in Southern California Los Angeles: Southern California Permanente Medical Group, 1979.

Kay, Raymond M. Kaiser Permanente Medical Care Program: Its Origin, Development, and their Effects on its Future.

January 28, 1985.

Neighbor, Wallace J. Interview by Daniella Thompson, September 20, 1974.

Planning for Health Winter 1984-1985. Oakland: Kaiser Foundation Health Plan, Inc., Northern California Region.

Records of the Working Council, 1955.

Saward, Ernest W., and Scott Fleming. Health Maintenance Organizations. Scientific American 243 (1980): 47-53.

Smillie, John S. A History of the Permanente Medical Care Group and the Kaiser Foundation Health Plan.

Somers, Anne R., ed. The Kaiser-Permanente Medical Care Program New York: The Commonwealth Fund, 1971.

Trefethen, Eugene E., Jr. Interview by Miriam Stein, February 16, 1982.

Trefethen, Eugene E., Jr. Interview by Sheila O'Brien, February 19, 1982.

Williams, Greer. Kaiser-Permanente Health Plan: Why It Works Oakland: The Henry J. Kaiser Foundation, 1971.

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Interview History

Dr. Cecil C. Cutting is a beloved and respected pioneer M.D. of the Kaiser Permanente Medical Care Program. His interest in prepaid medical care began in 1938 when Dr. Sidney Garfield came to San Francisco seeking recruits for his medical staff at Mason City, the construction site of the Grand Coulee Dam in eastern Washington, where the Kaiser company was part of a consortium completing the dam.

Cutting, a graduate of the Stanford University Medical School, was, at the time, completing a residency in surgery at the San Francisco County Hospital. Despite a warning from the dean of the medical school that joining a prepayment program was inadvisable, young Dr. Cutting, eager for broad practice in surgery, accepted the challenge offered by Dr. Garfield to become chief of surgery at Mason City Hospital.

In 1941, the Coulee Dam nearly completed, Dr. Cutting joined the staff of the Virginia Mason Hospital in Seattle. A year later, at the request of Sidney Garfield, he moved to Oakland, California, to help Garfield establish another prepaid medical plan for the Kaiser company, this time for the men and women building Liberty Ships in nearby Richmond. After the war, he, Garfield and about a dozen doctors decided to take the medical program to the public at large.

Medicine came naturally to Cecil Cutting. He was born and educated in Campbell, California, a small rural community in the Santa Clara Valley. His father, a Stanford graduate, taught mathematics in the high school. His mother, prior to marriage, had been a nurse at Stanford's Cooper Lane Hospital in San Francisco. His maternal grandfather and an uncle were also doctors. Although there were clergymen in the family, neither Cutting nor his brother thought about any career except medicine.

From 1957 to 1976, as executive director of the Northern California Permanente Medical Group, Cutting helped promote the stable growth of the medical program. Frequently, especially during the 1950s, he helped maintain peaceful relationships within the medical group and between it and management, a task requiring a combination of patience, mediation skills, and foresight few physicians are called upon to exert. In addition, he continued to practice surgery, often at the forefront of the new surgical technology. Since retirement in 1976, he has served as medical consultant to the Kaiser Permanente Advisory Services Program, advisor to the Kaiser Foundation Research Institute, and co-director of the Total Health Care Program.

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His small booklined office in the Ordway Building in Oakland was the setting for four two-hour interview sessions on February 26, March 6, 19, and 21, 1985. Prior to the first session we met to consider the general scope of the interviews. Three outlines were sent at intervals to alert him to the topics to be covered at upcoming sessions. He was always prepared. Sitting straight and tall behind his desk he spoke fluently, quietly, candidly, and with touches of humor, of the events and people responsible for the evolution of the medical care program. He reviewed the lightly edited transcript of his interviews carefully checking names, dates, and places for accuracy, and adding whatever information seemed important to insure a complete record.

Summarizing his experiences with the health plan he said:

It's been a very satisfying, fulfilling life. I think it's been very interesting to go through the cycle of being questioned, and ostracized, and criticized, to being respected, and emulated, and challenged by competition.

18 December 1985

Regional Oral History Office
University of California at Berkeley

Biography

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Regional Oral History Office Room 486 The Bancroft Library

University of California Berkeley, California 94720

BIOGRAPHICAL INFORMATION

(Please print or write clearly)

Your full name: Ceeil Cooper Cutting, MD

Date of birth: Oct 31, 1910

Place of birth: Campbell, Calif

Father's full name: Theodore A. Cutting

Birthplace: Riceville, Iowa

Occupation: High School Teacher

Mother's full name: Mary Elizabetti Cooper Cutting

Birthplace: Batavia, Illinois

Occupation: Nurse - Housewife

Where did you grow up?: Campbell, Calif, South Clora Valley

Present community: Oakland, Calif

Education: Physician & Surgeon, Stanford 1935 M.D. A.B. Stanford 1931 Junior College San Jose 1928

Occupation(s): Physician & Surgeon

Special interests or activities: Dealing of Health Care Services

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I Family Background and Education ## This symbol indicates that a tape or a segment of a tape has begun or ended. For a guide to the tapes see page 107.

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Chall

The questions that I have at first relate to your family background. Where were you born, and when?

Cutting

I was born in Campbell, California, down in the Santa Clara Valley, on October 31, 1910.

Chall

What were your parents doing in Campbell?

Cutting

My father was a high school teacher, my mother was a housewife. She had been a nurse at the Cooper Lane Hospital of Stanford, in San Francisco. Her father, Dr. Charles Noah Cooper, was a country doctor in Campbell; moved there soon after the Civil War. A beautiful, white whiskered, bright eyed, old man; good country doctor.

Chall

Where had he been trained?

Cutting

He'd been trained in Grenell.

Chall

In Iowa.

Cutting

Midwest, Iowa. And had been in the Civil War, and then practiced in Tennessee for a short time after that. Came out here in the late 1800s. My father, as I said, was a schoolteacher. His background was ranching; his father was an Iowa rancher. My dad was born in in Riceville, Iowa, went to Stanford, got a B.A. in English, never had a chance to teach English. They didn't need English; they made him teach mathematics and so on. He was very interested also in science.

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Chall

Where did he start teaching? How did he happen to end up in Campbell?

Cutting

He started teaching in a number of small towns around California. Danville, Santa Rosa, Sebastapol, Soledad, Ceres; he was just bounced around for a while until he finally landed the job in a high school in Los Gatos. He was there for some six years, I think. I went to first grade, actually, in Los Gatos. And then we moved to Campbell.

Chall

I see, so he, somewhere along the way had married your mother. In Iowa?

Cutting

No, out here. That was after he graduated from Stanford. And she had finished nursing school, and they got together.

Chall

So his college was in Stanford.

Cutting

Yes.

Chall

They were both pretty well educated people. Did you have brothers and sisters?

Cutting

I had one brother only. He was a doctor. He was dean of Stanford Medical School for a number of years, including the period when they moved from San Francisco to Palo Alto, and then he moved over to Hawaii, and was the first dean of the new medical school they started in Honolulu until his retirement, at age sixty-five, when he died. He was three years older than I.

Chall

Now, were there expectations on the part of your parents that you would go into medicine, or what? How did it happen you were both doctors?

Cutting

We just never thought of anything else, somehow. I think my mother's father, my maternal grandfather, had a lot of influence. I remember him well. He lived until I was in the middle of high school, anyway. My father had a brother who was a doctor. He was head of psychiatry at Agnew Hospital for a number of years.

My brother, I guess, he made the decision for himself to go in, and I never had any other ideas, other thoughts.

Chall

Did you like science in school?

Cutting

Liked science, liked math. Science particularly, yes.

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Chall

Was there a feeling about the need for helping people? Was that part of your interests as medical people?

Cutting

It seemed to be the only satisfying kind of profession. To help people, yes. Again, I think my grandfather had a lot to do with it--watching him take a sack of potatoes for payment for his care, and that sort of thing. We used to help him fill Calumel capsules--about his only medicine.

The ministers sort of wanted me to go into ministry, and I probably thought a little bit about acting, just in passing.

Chall

What was the religious background in your family? Was it practiced much?

Cutting

My mother's mother was a Windsor, Lydia Windsor, and she came from a long line of Windsors that were ministers, Episcopal. We were Congregationalists, lived next door to the Congregational church. I was janitor since I could push a broom. I attended Sunday school and church regularly.

My dad had a little trouble buying religion, buying the miracles, but he believed in the philosophy of right living, and so on. Very, very staunch Iowa religious people.

Chall

Oh, yes. You had your first taste of grammar school in Los Gatos, and then what about high school?

Cutting

Went through the first grade only in Los Gatos, the rest of grammar school and high school was in Campbell, in that high school district. The first of college was in San Jose State College, then I transferred to Stanford as a junior. Got my A.B. in '31, and I entered medicine that year. Got my M.D. from Stanford in 1935. A straight internship in surgery at Stanford Hospital in San Francisco, and first year residency in surgery there.

The I transferred to the San Francisco County Hospital, on the Stanford service, as a junior, and then senior, house officer. So I completed my surgical training at the San Francisco County Hospital.

Chall

You went into surgery. Is that something that you thought you'd like better than general practice which your grandfather had?

Cutting

It seemed more satisfying. I was interested in what little surgery we got through medical school; it always seemed to be most satisfying. My brother was in general medicine, or really in research pharmacology. He never practiced.

Surgery seemed more satisfying; somehow you do something.

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II The Grand Coulee Experience, 1938-1941

Chall

You were still a resident, as I understand it, completing your residency when Dr. Garfield came down and met you? 1938?

Cutting

Yes. This brought us to 1938, that residency. Dr. Garfield came by one day--I didn't see him that time--he talked to the resident in Ob-Gyn, who was a classmate of mine, a good friend.

Chall

What was his name?

Cutting

It was--

Chall

Dr. Moore?

Cutting

No, Dr. [Richard] Moore also was a classmate of mine, and he was at the San Francisco County Hospital. He had a general internship, an internship in pathology, and then two years in surgery.

Chall

Was it Dr. Gillett?

Cutting

Gillett. Ray Gillett, yes. Gillett was born in Washington, so, for him, going home to Washington was a pretty good idea. He actually was born on the Olympic Peninsula, though, which is a far cry from the desert at Mason City.

Chall

I should say.

Cutting

But he sort of thought it might be a good idea, if I would go. Dr. Garfield called on the phone a few days later, after I'd had a chance to think it over. I asked him to come up and talk to Dr. Chandler, dean of the medical school, to get his opinion of this concept of prepayment. They didn't get along too well.

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Dr. Chandler thought it would be inadvisable for me to take that kind of a job; it was not accepted in medical practice, in medical organizations. Dr. Garfield went on home, expecting probably I wouldn't join. But I got to thinking about it, and my alternative was to--I already had a job in San Francisco with a prominent industrial surgeon. It seemed to me that I would always be a small boy going in with another doctor, the senior doctor in San Francisco.

To go as chief surgeon to a new hospital--active, lots of work in a big, industrial project--would at least give me a lot more experience the first few years. I was young and eager, active, anxious to work, so I called Dr. Garfield and told him that in spite of Dr. Chandler's recommendation, I'd go up and take a look at it.

Chall

Had you met Garfield? You said first he came down and talked to Dr. Gillette in person, and then did you have an opportunity to meet him?

Cutting

I met him only when he came to see Dr. Chandler.

Chall

Oh. So otherwise it had been by phone, is that it?

Cutting

Yes. The invitation to come. But I met him at the Stanford Medical School. He'd just gotten off the plane--in those days a plane trip was kind of rugged, with a single propeller, probably all the way up from Los Angeles--he had a headache and didn't feel very well. I got him some aspirin, got him in to see Dr. Chandler; that didn't help him too much.

I did meet him. I was impressed with his quiet, sincere manner. He talked quite a little bit about the--then it was really only the industrial side of it, or the portion of the industrial premium that would be prepaid to the medical group, and then a combined payroll, voluntary payroll deduction for the workers' care, the non-industrial. The family wasn't considered at the interim stage.

Chall

Besides the opportunity to practice your skill, really get in and do it, were you put off at all by the possibility that this was not acceptable practice in the medical profession, or the organized medical groups?

Cutting

It didn't seem to bother me too much. The idea that took hold was of the experience, and a lot of work, and for a short time four-year project. It seemed as if I would have a lot of experience, and could come to San Francisco then with a lot of experience under my belt, rather than having been a small boy all my life.

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Chall

You were married at the time, weren't you?

Cutting

Married in 1935, during my internship year.

Chall

And your wife, I think, was a nurse.

Cutting

She was a nurse at Stanford, yes.

Chall

What did she think about going up from San Francisco to the desert?

Cutting

Oh, she was willing to go along; she had a lot of spirit and enthusiasm. I think with a little reluctance, perhaps, of the unknown. We didn't have any money. She had worked during my residency as a nurse, to keep us in food. I got no pay as an intern, $50 a month as a house officer, and $300 as a resident at Stanford.

I started at $300 at Grand Coulee Dam.

Chall

Now, you went up there first to take a look at it. What did you see?

Cutting

Alone; saw the little hospital. Dr. Garfield explained that there were plans to enlarge it, to improve it--put in air conditioning and so on. I met Dr. [Wallace] Neighbor then, at that meeting. He had just come from his Arrowhead experience. He was a pretty suave internist, but very affable, and I liked him. I was very impressed, again, by Dr. Garfield's quiet sincerity, and, it seemed to me, honest enthusiasm about the program.

We actually had a little San Francisco Hospital group up there, with Dr. Gillett, and Dr. Moore, and I, all from the San Francisco Hospital. Soon after I went up, I asked to have the nurse anesthetist, Gerry Searcy--

Chall

Was she a doctor?

Cutting

No.

Chall

Her name was probably Geraldine?

Cutting

Geraldine Searcy. She was a nurse anesthetist in San Francisco County Hospital, and seemed to be very capable; I worked with her there two years. She brought three other nurses out, so we had quite a contingent. One of them, Winifred Wetherall, later married Dr. Neighbor. So we had a good crew there; many of us knew each other beforehand.

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Chall

Yes, let's see--Dr. [Eugene] Wiley came from Iowa, I understand.

Cutting

From Iowa. He, I think, had met Dr. Garfield some time when Dr. Garfield had--he had medical school in Iowa, and I think he had met Dr. Wiley then. He was a general surgeon.

Chall

So you started in this little hospital that Dr. Garfield then remodeled. He was quite interested in developing hospitals according to the way he felt they should be. Did he discuss this with members of the staff in any way, or was it a one-man design?

Cutting

Oh, the design there was pretty much as it was. It was simply adding a few more beds and improving the outpatient emergency area. The air conditioning was Dr. Garfield. He had put it in his hospitals in the desert, and he was insistent on having that. The Kaiser people weren't interested particularly in putting in the air conditioning, so Dr. Garfield did that on his own, and Edgar said, "You should never do that. Never do that." But he did give him the money to pay for it.

Chall

So, from the very early days, Dr. Garfield went his own way if he thought it was necessary. What were the relationships between Garfield and the Kaiser people generally, up there?

Cutting

Excellent. It was a big happy family. Dr. Garfield actually didn't spend too much time at Coulee. He did for the first couple of months, and then later he kept his activity in Los Angeles, and came up really only every sixth weekend for most of the four years.

Chall

Is that so? And just for a weekend, he would come up? That's a long flight from Los Angeles.

Cutting

I was on duty twenty-four hours a day, except for every sixth weekend I got off.

Chall

Is that right! Twenty-four hours a day. Were the crews working day and night--

Cutting

Yes.

Chall

So that you could have accidents during the night?

Cutting

Oh, yes. It was a twenty-four hour job. Many a night we'd get out on the job at two o'clock in the morning, or so. A fellow had fallen off the dam, and smashed up, so we had to get him in. Our relationships with the Kaiser people were excellent.

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We used to open the gymnasium at midnight, and Edgar, and Dr. Neighbor, and I played badminton a lot. Also Todd Waddell, whom you mentioned the other day, he was head of the safety department and insurance. We had parties at Kaiser's home and at our home. They moved an old schoolhouse for us, Mrs. Cutting and me, moved it right into the center circle of Mason City, and that was our home. Because it was a big school room, we had a great area to use as a sitting room.

Chall

One room school type of thing?

Cutting

Yes. We had progressive parties; it was a fun group to have a social event with. The Edgar Kaisers and Joe Reis were up there.

Chall

Was he up there permanently during those four years?

Cutting

Yes. Mike Miller, the estimating engineer for the Kaiser Company, was a very good friend. We spent much time with him. Hal Babbitt ran the hotel, and sort of personnel relations with the medical staff. Got our home equipment, and so on, furniture.

Chall

Was that hotel a Kaiser project, or was it part of the town?

Cutting

It was part of the engineer town. You see, the dam had been under construction for four years--getting the bedrock ready for the foundation for the dam. The arrangement as far as medical care was concerned was typical for that time. The company, the contractor, paid a doctor a small stipend to take care of the industrial work, and he expected to make his income on the red carpet: front door, non-industrial, family practice.

So the industrial workers had really gotten kind of second class care, in the back end of the hospital. It was Dr. Garfield's and my feeling that they were our reason for being there, and we wanted to give them first class service. But the unions were pretty skeptical about any arrangement that the company developed, because of their past experience.

Mr. Kaiser, Edgar Kaiser, talked them into giving this young Dr. Garfield a chance with his idea. Mr. [A.B.] Ordway was there, of course, and he was very influential, too. So, rather reluctantly, they agreed to set up, again, an arrangement where the insurance companies paid a portion of the industrial fee, insurance premium, to Dr. Garfield, and the company arranged a payroll deduction, voluntary, for non-industrial injuries for the workers.

---

Within a year, the unions were so satisfied with the care, that they wanted their families included--in fact, they threatened to strike if we didn't include their families. We had no idea, really, of what to charge families. Dr. Garfield's judgment prevailed. We charged 50¢ for the spouse, and 25¢ for each child.

Chall

Was that 25¢ a week, too, for the children?

Cutting

Yes.

Chall

At that point did you have to bring up a pediatrician?

Cutting

We brought in a pediatrician the second year and about the same time we added another internist.

Chall

Do you remember the name of the pediatrician?

Cutting

Oh, dear.

Chall

Nobody seems to be able to remember his name, but I'm sure we'll find it.

Cutting

I can't pull it out right at the moment. I'm sure Mrs. Cutting can remember. [Yes--Dr. George Agnew]

Chall

And the other internist, I don't have his name.

Cutting

Chuck, Charles Olson.

Chall

Where did each one of them come from?

Cutting

He was from Michigan. Young, and very smart, active, enthusiastic-- internist interested in diabetes and special endocrine medicine, really. Sharp young fellow. He married one of the nurses--Evelyn Sanger. I'm not sure where the pediatrician came from; it was in the Middle West somewhere.

Chall

You already had Dr. Gillette up there, and he was an Ob-Gyn specialist, so he must have done something else before you had the families--the wives and children.

Cutting

We took care of the wives and children on a free-for-service the first year.

Chall

It just got too expensive for them.

Cutting

Yes.

---

Chall

I understand too you had an osteopath who practiced physiotherapy up there for a time.

Cutting

Yes, he was a very nice young fellow, good physiotherapist, and he did not practice his osteopathy, other than the general physical therapy.

Chall

I think you must have needed a physiotherapist there if you were taking care of injuries.

Cutting

He was very active in industrial injury; orthopedics.

Chall

Were all of you medical people close to each other? Or were some of you closer than others?

Cutting

I think we were all very close, we were really very close. Dr. Neighbor and Dr. Olson were especially close. They both loved hunting, of course--duck hunting, pheasant hunting, and so on. We were all really very close.

Chall

Did you establish relationships with the townspeople, or any of them, or was it the medical people and the Kaiser staff, primarily?

Cutting

It was pretty much the Kaiser engineer staff and the medical side. We had some good friends with the Bureau of Reclamation.

Chall

Yes. They were in charge of the dam.

Cutting

They had a government town across the river. They had a little fancier homes, and lawns around them, but they were very nice people, and we had relationships with them. Of course, there were six companies, contractors. The Kaisers got the major contract, but there were representatives of the other contractors there, too. Got to know them.

The townspeople were patients, and we got to know them quite well. Mrs. Cutting started a well-baby clinic, and got her best donations when she was soliciting the houses of ill repute up there on the hill. The madames were very friendly. The community church provided the space, and the houses of ill repute the money-- a very compatible community.

Chall

Isn't that funny. She remained, then, working, your wife, in nursing.

Cutting

Voluntary only, there. She didn't work up there.

---

Chall

Let's see what else we could talk about that time? Dr. Neighbor considered it the happiest years of his life, actually, up there.Interview of Wallace Neighbor with Daniella Thompson, transcript, Tape 5, side 2, 20 September 1974 (Audio-Visual Department, Kaiser Foundation Health Plan), 4 (hereafter cited as Neighbor interview).

Cutting

Yes.

Chall

And I wondered whether you felt somewhat the same--that experience, during the same period.

Cutting

I think it was an extraordinary experience--certainly one of the happiest in my life--lots of work, lots of play and the development of many life-long friends.

##

Chall

Was there any talk at that time among you of having a somewhat similar kind of medical practice, if you could get something going, in other parts of the United States? Someplace else? Were you interested in that?

Cutting

We didn't talk very much about the future beyond the dam. We knew we liked the way the practice of medicine was carried out there. The prepayment made so much sense. We didn't have to worry about putting claims to the insurance company for every visit, and billing the people for every service that we gave them. It was sort of a continuation of the same sort of practice that you had as a house officer in medical school. We were all enthusiastic about that--the advantages of working together with a group of specialists, and prepayment method budgeting and forecasting our expenses, meeting our payroll, and so on.

Chall

I understand you set up your own AMA chapter up there, too.

Cutting

That was sort of theoretical.

Chall

Just to get it done? [laughs]

Cutting

[chuckles] Yes. We were far enough away from any other county medical society that it wasn't practical for us to belong to any other, so we wrote a letter and said we'd like to sort of be part of medicine, inside our own little medical society. I don't think we ever got any actual papers as a county medical society from the AMA, or anything.

Chall

Did you do that just because you wanted to have your foot in the door, because you thought that perhaps you would be frowned upon in later life for having done this kind of medicine?

---

Cutting

No, I think we did it for maintaining professional education relationships with organized medicine. We were not antagonistic, nor were they with us, at that time. There wasn't anybody else there.

Chall

Yes, although Dr. Chandler had warned you--

Cutting

He had warned, although--I think his warning kind of went over my head at that time.

Chall

[laughs] Young, brash doctor.

Cutting

Brash young doctor. [laughs] As the dam job was ending, obviously you could see ahead about when it was going to be finished, and we knew that the staff would have to be cut down. Dr. Moore was the first one to leave; he went over to the Western Medical Clinic, so called, in Seattle. It didn't have a very good reputation; it was run by a lay organization; it was an industrial clinic. But he did join that for a year before I left.

I had an invitation, I didn't have to ask for it, but I got an invitation from the Virginia Mason Clinic in Seattle, which was the top clinic, very high class. Wonderful people. And they needed an orthopedist, and asked me if I would come over. I hadn't thought of leaving, but it was obvious that either I would leave, or some of the others; Dr. Wiley would have to leave, and since I had this excellent opportunity, I accepted it. Reluctant to leave--I wasn't enthusiastic about leaving, though I was enthusiastic about the opportunity.

Chall

What time was this, about 1941?

Cutting

1941.

Chall

Did the Virginia Mason people come to you? Did they find you?

Cutting

By letter. I don't for sure know how they found me. They needed another orthopedist in the department and knew the dam was nearing completion so they invited me to join the clinic. They are a warm, delightful group, Virginia people, and most hospitable. They gave us a beautiful welcome. We had a very, very lovely year with them. It was just a year. We were there on December 7, when Pearl Harbor blew up, and it was soon after that--actually, immediately after that, I was contacted from the San Francisco County Hospital group. The former senior residents there were making a corps contingent to go to the army, actually a MASH unit. They were going to Northern Africa and Italy. So I was lined up to join them when Dr. Garfield asked me to come down to Richmond to help in the shipyards.

---

Chall

Did the Virginia Mason Clinic specialize in orthopedics?

Cutting

It was a general clinic.

Chall

General clinic. Attached to their hospital?

Cutting

Yes, they had their own hospital. They had three or four internists, three or four surgeons, Ob-Gyn, and a neurosurgeon. It was a multi-specialty clinic.

Chall

Private? It was fee-for-service?

Cutting

Yes.

---

III World War II: The Kaiser Shipyards, the Richmond and Oakland Hospitals

Chall

When you got your call from Dr. Garfield, did he come up to see you, or call you on the telephone?

Cutting

A call on the telephone. And I came down to Richmond some time in January, I think, '42, to meet him. Actually we moved out on March 1, 1942.

Chall

You moved into Oakland?

Cutting

Moved into the Claremont Hotel for a couple of months until Mrs. Cutting found us a house in Oakland, yes.

Chall

Were you, at that time, planning to be chief-of-staff of the Fabiola Hospital that they were taking over?

Cutting

Yes. He asked me to be chief-of-staff, chief of surgery, at both the Richmond Field Hospital, and the Oakland Hospital.

Chall

Is chief-of-staff different from chief of surgery? Were there two positions, in a sense?

Cutting

Two positions, yes, the department of surgery would have a chief, and the overall medical group, the hospital, would have a chief. It was a title, it wasn't anything else. But we did keep busy during the wartime, running between Richmond Hospital and the Fabiola Hospital.

The Richmond Hospital started as a glorified first aid station, actually.

Chall

That's why it's called the field station?

---

Cutting

It rapidly increased to 185 beds. We had five first aid stations surrounding the shipyards, feeding into the field hospital there. The field hospital fed into the Oakland Hospital as the mother hospital, sort of. We rented office space on Pill Hill in March of 1942. I was the first doctor down here. I had that office and operating privileges at Merritt Hospital; we hospitalized patients there. I made house calls, and was the only doctor for two months.

We got another doctor in with us, and the first of July, we began to add to our staff. Dr. [Morris] Collen became chief of medicine. Dr. [La Mont] Baritell, Dr. [Norman] Haugen, and Dr. [Donald] Grant, were surgeons that came. They came as residents, actually, and completed their residency training while they were here.

Chall

And you were all practicing for a while, and using Merritt Hospital?

Cutting

They didn't come until the Fabiola was open. I was the only one, I, and one other, by the name of Jerry Gill, was with us for a few months. He did not stay very long. But the group really didn't form until July of 1942.

Chall

That's pretty fast work.

Cutting

Yes. I'm sure you have the story of first going through the old Fabiola Hospital. It had been a maternity hospital for the old wooden Fabiola Hospital, before it burned down. It was the only structure that remained. It had been unused for some seven years, and had been completely dismantled. The War Manpower Board had been planning to make dormitories or something out of it; that didn't come through. So it was gutted.

Chall

It must have been a mess.

Cutting

Dr. Garfield and I went through it with Mr. Henry Kaiser. Dr. Garfield was pretty apologetic, not wanting to buy it, because it was pretty well torn up. Mr. Kaiser said, "What's the matter, young man, don't you think I have any imagination?"

Chall

[laughs] Really?

Cutting

Garfield arranged to have a loan of $250,000 to remodel it, from the insurance company, the same insurance company that had carried the insurance for Coulee Dam in the desert, and was carrying it for the

---

shipyards. Mr. Kaiser didn't want him to do that, wanted to go to the bank, for some reason or another. The bank said they wouldn't loan any money unless Mr. Kaiser guaranteed it, so he guaranteed it.

Dr. Garfield always felt that he didn't really need the guarantee, because he could have gotten it, but it was easier to have it.

Chall

Oh, surely. Did he want, as much as possible, not to be beholden to the Kaisers, or the Kaiser industries, even though he was really attached to them, in this kind of project?

Cutting

Oh, I think at that stage, there wasn't very much thought or worry about attachment. His primary interest was setting up the Permanente Foundation, a non-profit foundation.

Chall

At that time? Even during the war.

Cutting

The beginning of it, yes. To hold the monies that could be generated through the contract with the insurance company. Any extra monies Dr. Garfield was anxious to have put into that foundation for future use. By this time we were beginning to look to the future. And of course, we paid off the Fabiola mortgage in seven months, I believe. I thought it was two years; Dr. Garfield corrected me a while back. In either seven or nine months, he paid it off.

Chall

That's pretty fast.

Cutting

I remember the evening we burnt the mortgage. [chuckles]

Chall

[laughs] What was the evening like?

Cutting

Oh, we just celebrated.

Chall

Where did you burn it? In your fireplace--

Cutting

Yes.

Chall

Did you have a party for the other doctors?

Cutting

No, Dr. Garfield and--we burnt that at our home.

Chall

Was he living with you at the time? Did he live with you during the war years?

Cutting

Most of the time during the war years, he maintained a suite at the Sir Francis Drake Hotel in San Francisco. His girl friend, Virginia--

---

Chall

I think I can get that name, I saw it in Dr. de Kruif's book. [Virginia Jackson]Paul de Kruif, Life Among the Doctors (New York: Harcourt, Brace and Company, 1949), 389.

Cutting

She came up and was working as a nurse at the Fabiola Hospital. She was staying with us for several years. Then in 1946, Mrs. Cutting and I moved to Orinda from Oakland, and Dr. Garfield bought a house in Orinda, and married, at that time.

Chall

Married Virginia?

Cutting

Virginia. That marriage--it must have been a little sooner than that, because he was living with us in 1947, after that marriage broke up. So they were only married, I guess, a couple years. Then he lived with us.

Chall

They were married in about '46, and then that broke up in what, '47, or so?

Cutting

Actually, he was living with us in '48, because we adopted our two children then. And he was living with us; he was responsible for us adopting our children. He talked us into it.

Chall

How long did he live with you, then?

Cutting

He lived with us until he was married to Helen Chester Peterson (because she was married before), and that must have been '55 or '56.

Chall

So he really was a member of your family, in fact.

Cutting

For a long time, yes.

Chall

He must have preferred the sort of family relationship to living again in a hotel or an apartment. That meant that you were quite close; you were really living together during some of those very critical times.

Cutting

I've forgotten just offhand the date that he married Helen.

Chall

We can probably find that someplace. Was Helen Chester related to the Kaisers? I read, I think it was in Dr. Garfield's obituary, that she was Mrs. Kaiser's sister-in-law.

Cutting

She was Ale [Alyce] Kaiser's sister. [pronounced like alley]

Chall

I just wondered how that had come about.

---

Cutting

Mr. Kaiser married Ale Chester, of course, soon after Bess died. Dr. Garfield was living with us when we got the call--Mrs. Cutting and I, and the Neighbors had been salmon fishing that day. We got home wet and tired and dirty, just getting to bed, when the phone rang. "Mr. Kaiser wants you down at the airport right away. Sid's getting married." Sid then got on the phone and said would we bring his suit and a clean shirt to the airport. We flew to Reno and Sid got married, and flew back.

Chall

But had you been aware that there was some interest between them?

Cutting

Not particularly. She had been married to Mr. Peterson, who was a paraplegic, a polio paraplegic.

Chall

Back to the war years and the building up of the plan. At least as it was going along, Dr. Garfield was in fact in charge. The organization was Dr. Sidney Garfield and Associates during that period of time. Did he, in fact, have total control? That is, to what extent did he confer with any of you when he was hiring other physicians or other members of the staff, or making other kinds of administrative decisions?

Cutting

Oh, administrative decisions, he made. He was the boss. He had the responsibility, and he ran the show. As far as employing the physicians and other staff members, we all did that. Dr. [Paul] Fitzgibbon joined us, I would guess, in 1944. Fitzgibbon was a very unusual fellow; very likable neurologist. He'd been quarterback for the Green Bay Packers, and then went into medicine. He sort of took charge, under Dr. Garfield, as hospital administrator, and maybe chairman of the medical group. We had meetings, but Dr. Garfield was the boss, there was no question about that.

But Mrs. Cutting actually employed most of the nurses and the lay help. Fitzgibbon, I think, did most of the employment of physicians and staff.

Chall

You were chief-of-staff. That meant you were responsible for the way the medical practice was going, is that it? Rather than administration?

Cutting

Yes, that's right.

Chall

Before Dr. Fitzgibbon came in, was Dr. Garfield doing all of it?

Cutting

Yes.

Chall

How did he happen to bring in Dr. Fitzgibbon? Expecially to help in the administration, or was he asked to do it? How did that come about?

---

Cutting

I'm not sure. I think they had known each other somewhere in the past. I really don't think I ever really knew how Paul Fitzgibbon arrived. He was welcome, was very dynamic, full of stories. Quite an operator.

Chall

What do you mean by that? That's a good word. [laughs]

Cutting

[laughs] Oh, enthusiastic. [laughs] We'll let it go at that.

Chall

I assume that he and Dr. Garfield got along during that year or so.

Cutting

Very well. Dr. Fitzgibbon got worried, and left us about 1953.

Chall

That's well after you'd started to go out into the public with the program.

Cutting

He got worried that Mr. Kaiser was going to take over. I remember walking clear around the block with him, one noon, talking about it, deciding to leave. He said he didn't think much good could come out of it if Mr. Kaiser was going to get involved and take over.

Chall

Yes, at the critical time that led up to the Tahoe Conference. That's interesting that some of you stayed on and fought it through but he was unwilling to do that.

Cutting

Right.

Chall

Did you try to persuade him to stay on and see it through? Did you think the problems could be resolved?

Cutting

He pretty much made up his own mind, I think. See, most of the staff that was with us during the war, left. We had a chief of surgery that came in 1943, until '45. As soon as the war ended he left. Our ENT man left, our orthopedist left, our x-ray man left. This was as soon as the war was over. They were with us during the duration, primarily.

Chall

Were they with you because they needed to practice medicine, but weren't interested in the possibility of going on with the plan as some of you were thinking about it?

Cutting

Yes, they were less interested in the plan than they were interested in the army deferment during wartime. Immediately afterwards, when we began to get flack from organized medicine--county medical society and so on--they decided they didn't want any part of that.

---

Chall

How many of you remained because you were interested in this type of medicine?

Cutting

There were sixteen of us in 1948. Let me see, Dr. Bob King came after the war, so we probably dropped down closer to ten right after the war.

Chall

Right, from the original wartime group? From about what, forty or fifty?

Cutting

Yes.

Chall

All that had been set up at that time was the hospital foundation. There really wasn't a health plan, as such?

Cutting

Yes, there was. The Permanente Health Plan had started, oh, at the beginning of the war; the voluntary payroll deduction for the non-industrial injuries and illness for the workers. Then the families came in about two years later, after our first major expansion on the hospital. We had room for families, then we opened it up to the families.

Chall

Of the workers?

Cutting

Workers, right.

Chall

So it was really the industrial family, then, that participated.

Cutting

There were ninety thousand shipyard workers, plus their families. It was good size. Permanente Health Plan and Permanente Hospital-- we added to the old Fabiola in stages, in steps. Each year we were adding some portion. First thirty beds, and then surgery, and a dining room, kitchen, and so on, another sixty bed addition, and another sixty.

Chall

Some of that addition came from the War Manpower Commission.

Cutting

That's right. Though Dr. Garfield purchased it all after the war. But he got a good deal. War Manpower/Federal Works Agency. They had no use for it afterwards, so we bought it.

Chall

Were you involved in any way with the battles that went on over a year or so, just to get the government to provide the funds, at one point, to add onto the hospital, between about '43 and '44? Mr. [Eugene] Trefethen was really involved in getting that money.

---

Cutting

We were aware that we were having trouble. We were aware that other hospitals in the area, Merritt, and so on, Peralta, wanted to expand. They didn't want us to expand. So they were lobbying back in Washington against our expansion. Probably Mr. Trefethen's memory there would be better.See interview with Eugene E. Trefethen, Jr., The History of the Kaiser Permanente Medical Care Program, an oral history interview conducted 1985, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 1986.

Chall

Were you aware of Mr. Trefethen's involvement?

Cutting

Sure.

Chall

And of course Garfield's as well. He was the one that helped push it.

Cutting

Sure.

##

Cutting

Plus the war effort itself diverted so many things to the military, that it was always a battle to get equipment, furniture, and all the little things we needed to build a hospital.

Chall

What was your surgery like in those days? Were the injuries different from what they were at Grand Coulee? How was your practice?

Cutting

Oh, we had the whole gamut of illnesses and injuries. Dr. Collen, if you're going to talk to him, will tell you about the lobar pneumonias. Actually these men, workers, recruited from the midwest, were all 4Fs, for the most part; they were the dregs. They'd come, and a trainload, a carfull, of pneumonias would arrive. It was not unusual to admit ten or twelve acutely sick lobar pneumonia patients in an evening, without penicillin--no antibiotics--so you'd line the corridors with these pneumonia patients. Dr. Collen became a national expert in lobar pneumonia. You can get that story from him.

We had some thirteen thousand fractures the first couple of years. Had lots of Achille's heel--calcaneous bone fractures, which were a little unusual.

Chall

Is that because of what they were doing?

Cutting

Yes. Falling, or compressions from the steel underneath them. That would fracture the heel bone. We had a series of half a dozen leprosy cases. We had polio, of course; that was dreaded in those days. Lots of compound fractures. One day during the launching of their ship, about fifty people climbed on to their shed roof to watch the launching, and the roof collapsed. We got most of the fifty people at once with a variety of broken legs, broken ribs, and so on.

---

The Richmond Field Hospital was a full operating facility: surgery, OB, so on, the usual run of serious industrial injuries. Actually, at Richmond we were cited as having the least time loss for sickness and injuries of any of the shipyards in California.

Chall

Is that because you took them immediately and cared for them?

Cutting

Yes. Certainly for the time loss of illnesses and so on. They could come to us without waiting to get really sick. They had a lot of surgery--hernias and so on--getting these people in shape to go to work. There was no pre-employment examination, no age limit for shipyard workers.

Chall

You also had many women there who were working for the first time, and rather special kinds of work. Which may have created accidents, I don't know.

Cutting

Rosie the--

Chall

Rosie the Riveter.

Cutting

Rosie the Riveter, yes. Do you know that book that one of the fellows wrote about the wartime workers?

Chall

No.

Cutting

It was an interesting novel based on the actual working experience, the women's role, etcetera. We always tell the stories about the unusual number of pregnancies that developed in the shipyard, in the crawl space between the bottom deck and ship hull.

Chall

Now, at the time you had the Permanente Foundation and the Permanente Health Plan.

Cutting

Both were non-profit.

Chall

But did Dr. Garfield have authority over the health plan?

Cutting

It was all under his management. The foundation needed a board, and the Kaiser people were on the board. Trefethen, and Henry Kaiser, Edgar, and so on.

Chall

And the Permanente Health Plan, did that have a board?

Cutting

The Permanente Health Plan was a non-profit organization and had the same board.

---

Chall

They had to have a board?

Cutting

Mainly to save the property taxes, rather than to receive any contributions and charity.

Chall

But the doctors, at that time, were not organized in any way. You hadn't set up your medical groups; they were under the control of Dr. Garfield.

Cutting

We set up the partnership in 1948.

---

IV The Postwar Years: The Permanente Health Plan Moves Into the Community, 1945

Chall

If any of you during the Grand Coulee days had any idea of wanting this kind of plan to succeed in a regular urban setting, this was the opportunity. Dr. Garfield, I am assuming, was interested in developing this further, after the war. Was he looking forward to the postwar period, and carrying this on in some way?

Cutting

Yes. Dr. Garfield and Dr. Raymond Kay, an internist at the L.A. County Hospital with Dr. Garfield, had talked about setting up some sort of a plan after the war. Dr. Garfield was to have joined the military unit with Dr. Kay, and Dr. Kay was pretty mad at him for not going, and made him promise that if he didn't go into the military, if he did this job, they would look forward to setting up such a program after the war.

Mr. Kaiser, of course, wasn't interested in expanding to Los Angeles after the war. That's another story.

Chall

Yes. He just had his field hospital down there in Fontana. But up here, where you really had the bulk of your activity, were any of the rest of you interested in the continuation of this form of medicine?

Cutting

Oh. Sure, from the time we got into the operation here in Richmond and Oakland, we hoped it would continue to grow after the war.

Chall

That was ten or more of you, perhaps?

Cutting

Yes.

Chall

Who were they? That would be you and Garfield, that's two.

Cutting

Fitzgibbon. Dr. Collen, Dr. Baritell, Dr. Grant, Dr. Haugen, Dr. [Melvin] Friedman, a pathologist. How many do we have?

---

Chall

[counting] Eight.

Cutting

Dr. [Richard] Moore. Drs. Alex King, Donald Ash, Beatrice Lei, Clifford Kuh.See also page 35.

Probably that's about enough, I'm sure. Dr. Neighbor came down after the war. He didn't come down until about 1948. He was here at the beginning of the partnership, but he ran the Vancouver Hospital during the war. Came down, in I imagine 1948, right after the war.

Chall

So you probably wouldn't call him one of the thirteen you've mentioned?

Cutting

Nope, nope. People who were here who stayed.

Chall

So you did discuss this among yourselves? What did you have in mind? How did you think it would work out?

Cutting

I think we were naive enough to think that we could just go along, cut down the size of the group as the shipyard workers dropped off, and as it became postwar time, we could pick up enough members to survive.

Chall

Under Dr. Sidney Garfield and Associates? In that kind of arrangement still?

Cutting

Yes. We hadn't really thought of the structure, I think, until '48. Then is when we decided for sure that we thought the medical group should be a partnership, rather than continue as salaried physicians. We thought the hospital and health plan should be non-profit to save the property tax money, and so on, and as time went on, probably the health plan and the hospitals should be tax exempt also; charity purposes. But that was--

Chall

As far as you got in '48. What about Henry Kaiser and Mr. Trefethen and the others, who really were backing you up? What did they think about the expansion of the plan, right here in northern California?

Cutting

They had no problems with that. They were supportive of expansion here. In fact, around 1950, Mr. Kaiser wanted to build a Walnut Creek hospital. But this again is getting into another time period.

---

Chall

Yes, it is. I guess, when I used the term expansion, that's the wrong term. I mean moving into the community after the war to take in people beyond the shipyards.

Cutting

We were in Richmond. We were in Oakland, of course, and during the war we went to Vallejo. We started a little two-man clinic there, and expanded; took over again some old housing dormitories, and so on. It was a military hospital. We had a little clinic in Napa, one-or two-man clinic there.

Chall

Were these all of your industrial employees, and their families?

Cutting

These were largely federal civil service employees--merchant marine and maritime workers. They all stayed after the war. In San Francisco we had accumulated quite a membership during the war, and immediately after the war, we had probably our largest single group, the longshoremen in San Francisco. In 1946, soon after the war, the Industrial Indemnity Insurance Company--that's the same insurance company that had been carrying our industrial insurance all the way through the desert, Coulee, shipyard days-- had a medical director there who had a heart attack, Dr. Moore (not the same Dr. Moore). He had a little clinic going, industrial work, on 515 Market Street, and they asked me to take over that clinic for them. So I worked as medical director of the insurance company for about a year.

We didn't get along too well with the insurance company. I was too generous with their claims, I guess. I think he came back to work on the claims side, but not taking care of patients. But we used that nucleus as a start for a clinic in San Francisco.

Chall

So the Permanente Health Plan took it over.

Cutting

The Permanente Health Plan took it over. And I went over there as medical chief. We had gradually developed five doctors. After a couple of years, when Dr. Neighbor came down from Vancouver, he took over the San Francisco clinic. I came back to Oakland-- although at that time, 1948, we bought an old hospital, an old derelict of a hospital in south San Francisco, Harbor Hospital. And I operated there as well as in Oakland. By this time, Dr. Baritell had finished his residency and was chief of surgery at Oakland.

Chall

So you were continuing all this time to practice medicine, you weren't just administering?

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Cutting

No, I was nearly 100 percent practicing surgery. Then, as the hospital in San Francisco was planned and built--in 1954-- Dr. Neighbor came back into the medical department in Oakland. Dr. Collen took over his position as chief in San Francisco. The clinic became a part of that hospital medical center.

Chall

Those were the mid-years when it was growing. The early years, 1945-1948, right after the war, then, I guess, presented the challenge of getting your membership established. So, if the unions wanted you to continue, that was a good start.

Cutting

There was a drop down from the ninety thousand odd shipyard workers, plus their families and so on, to about a ten thousand membership, right after the end of the war. By 1948, we'd built up to about fifty thousand. So we were growing then. Snowball. We had to grow as the former shipyard workers, now scattered around industries around the area, felt the pain of medical bills. They wanted the kind of care that they had gotten during the war, so they began coming in.

There were a number of other helps during those days. The union-management freeze, the wage and salary freeze, allowed medical benefits to be still negotiated between unions and management. And it seemed to be an advantage to both of them to encourage us, so that that was a real help to our membership growth. The unions played a strong part in our growth immediately following the war.

The Opposition of the Medical Society

Chall

That was all part of the economic picture in the United States that aided you. Organized medicine, in about 1948, certainly, '46 to '48, was then opposing you quite strongly.

Cutting

They were strongly against us from '46 to '48.

Chall

They saw you growing.

Cutting

Group practice was fairly uncommon at that time, itself, let alone prepayment. They were adamant. No, the new physicians we could attract were not admitted to the county medical society. Orthopedists were told that they would not get their certification for orthopedists.

Chall

Is that so?

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Cutting

The board certification if they stayed with us. The orthopedists always had a pretty tight hold on certification. Neurosurgeons who'd come into town would be anxious to work with us to start a practice on either a fee-for-service or a retention arrangement; they were quickly told they shouldn't work with us, or they wouldn't get any referrals outside.

Chall

Would any of them take the chance, or were you having a difficult time getting your physicians?

Cutting

Pretty difficult time. We usually could farm out the neurosurgery, of brain tumors, and elective, remunerative kinds of neurosurgery, but the traumatic kind, the injuries, and so on, we had to take care of. By this time, I was sort of footloose. The Richmond Hospital was decreasing, and we had a chief of surgery.

They were pretty purist surgeons, actually, and I was always a mixture of orthopedics, industrial, and general surgery. But with my priority, the respect that they somehow or other had to give me [chuckles], I could do most anything. So I did the neurosurgery. We did the first intravertebral disc surgeries, until we got a neurosurgeon in. We did a good job. Actually, we had an orthopedist that thought he could do a good job, and I helped him with his first one with us.

It was not very well handled, and I said, "Wait a minute, from now on I'm going to do this." So I did all of them for four or five years until we got a neurosurgeon in.

Chall

Was that a neurosurgeon who had decided to come in despite the opposition of the medical profession?

Cutting

That time we got--yes. A Chinese, Dr. Lu. Very fine, excellent physician. He dropped off after four or five years with us; went into private practice out in Walnut Creek. Then we were able to get a neurosurgeon, and an orthopedist, but they were a problem always.

Chall

It was at that time that Dr. Paul de Kruif came, almost riding on his white horse, to prove that you [the health plan] were of value, and wrote quite a bit about Dr. Garfield, and the plan. Can you tell me something about Dr. de Kruif and his mission?

Cutting

As I remember it, I associate his mission out here, sort of associate it with the beginning of the Rehabilitation Center. See, Mr. Kaiser's youngest son, Hank, Henry Kaiser, Jr., developed multiple sclerosis. Incidentally, I was the one that made the

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first diagnosis, and had to explain to Mr. Kaiser what I thought the future held, which wasn't very acceptable to Mr. Kaiser. He said that he would do something, and this got started with the Rehabilitation Center.

Henry Kabat, back in Washington, D.C., was interviewed and our Dr. Moore went back with him for six months or so, and then they both came back out here to Vallejo and started the Kabat-Kaiser Rehab Institute in 1948.

Chall

I wondered how that got started. But the one in Vallejo, was that just taken from the little hospital, or was it built especially for this?

Cutting

It was a section of the old military hospital there. And as I remember, it was about that time that Dr. de Kruif came out. Dr. de Kruif's son, David de Kruif, joined us in medicine soon after the war. He joined a small group of [John] Mott, [George] Ekhart, David de Kruif, and one other doctor that had been with us. Dr. Mott was the leader of that, wanting a little more entrepeneurialship, wanting to get out from under what seemed like a bureaucratic kind of administration. So we let them start a clinic in San Leandro.

Chall

Really? How separate was it from the umbrella--the overall medical group, or health plan?

Cutting

They were members of the medical group before they went there. They were closely related with us; we paid them so much per office visit. And they learned how to do a very good job of good medical care on an economical basis, out of a couple of old houses that they rented and built. That went along for several years until they began to want more money, and at that stage, we said, "Look, this is not really compatible with our prepayment concept. You fellows have got to come on in."

This was after '57, because I was then executive director. So they then gave up their entrepreneurship; they became partners, members of the medical group.

Chall

But their patients came from the health plan members, didn't they?

Cutting

Yes, and we got the health plan membership dues, and paid them on a per member visit basis. We did their referrals, the patients to the doctor. Mott and I operated in surgery; their referrals, and so on. They were members of our hospital staff. That's another story.

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Chall

That was a unique arrangement. I hadn't heard about that one before.

##

Cutting

Paul was interested in coming out to see what David was doing. David was enthusiastic, and so this got Paul de Kruif interested, plus he was interested in the Rehab Center.

Chall

Let's see. He wrote a book in about--this is Paul de Kruif--about 1943, or so, about the health plan. I think it was taking shape then.

Cutting

Kaiser Wakes the Doctors?Paul de Kruif, Kaiser Wakes the Doctors (New York: Harcourt, Brace and Company, 1943).

Chall

That was Kaiser Wakes the Doctors, yes. Then he wrote one in 1949 called Life Among the Doctors, in which he had two long chapters about Dr. Garfield. During the beginning of one of those, he said that Dr. Garfield had called him out in 1948 because organized medicine was beginning to make life difficult.

I think he came out then to watch what was happening, to follow him around, to help prepare statistics--

Cutting

Make life miserable for them. [laughs] With his Reader's Digest clout, he carried quite a bit of weight. Okay, Dr. Garfield invited him, but David, his son, was with us, and he was also interested in the Rehab, I think. Paul was a very unusual character. We spent quite a bit of time with him, and this was the time when Dr. Garfield was living with us in Orinda. So Paul would come out and Dr. Garfield and I would be sitting around the house talking.

He and his son David both had very short tempers. They got into a fight one night at our place; they really got into an argument, so mad they started fist fighting. Paul, I think, suggested, "Let's go jump in the pool and cool off." We had a big swimming pool, unheated. So they stripped off most of their clothes and jumped in the pool, and came out arm in arm, and friendly again. They were dynamic, Paul particularly. Terrifically dynamic. Kind of overshot the goal sometimes.

Chall

The books that he wrote, especially those that dealt with the Kaiser plan and Dr. Garfield, were they accurate?

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Cutting

They were accurate enough. I think it was just before serious differences of opinions came out. You said 1948?

Chall

About 1948-1949 is I think when he was here and when his book was coming out. There were a couple of trials going on: Dr. Garfield vs. the County of Alameda, California.de Kruif, Life Among the Doctors, 407-423.

Cutting

He was taken before the Board of Medical Examiners. We'd taken on Dr. Keene, who was a board certified surgeon, and a colonel in the army, in surgery. He came through on his way really to be evaluated by us for the job in Detroit, the Willow Run job. So we put him on as a resident, so-called, but it didn't fly with the medical society. They said we were employing doctors without a license.

He did not have a California license. There was another doctor, Dr. Thomas Flint, who had been in trouble with the medical examiners, narcotics charge, that had been cleared for a long time. We took him in as part-time, to observe, and he was off the drugs. But he had a history, and they picked that up, too; hiring doctors on drugs.

Chall

All of that is not discussed in de Kruif exactly that way, so you just get sort of a broad picture of hostility. But Dr. Garfield was cleared of that. I think there was the other charge of unethical practice, which had nothing to do with Keene or Flint, later.

Cutting

They didn't find any problems. They sent committees, several times, to look us over, but one thing they never could find was poor quality. They couldn't get us on quality. They would come and look over our emergency log and see if we kept non-member patients who had come in emergency, of if we would refer them to their own doctor on the outside. They found that we did call him up, and if the doctor wanted to see him, fine. If the doctor didn't want to come out that night, why, we'd take care of it, and keep him.

So they were looking for every angle to nip at us some way.

Chall

How did Dr. Garfield take this nipping?

Cutting

Oh, it bothered him. He basically believed in organized medicine and the ethics of the American Medical Association. I'm sure it bothered him to be ostracized, but he was ready to fight for his

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own ethics, and so was I. They repeatedly told us that we should open our staff, so that any doctor could treat health plan members. In other words, if a health plan member could go to any of them, if we'd pay them, then there'd be no problem. So there's no sense in arguing that; we're staffed to take care of them.

We forecast our expenses in order to take care of them. We can't do that and still pay an outside doctor a fee-for-service for taking care of them.

Chall

That's what bothered them, that it wasn't fee-for-service, it was a panel of doctors.

Cutting

Freedom of choice, that's all. It took them quite a while to accept the fact that the voluntary enrollment period did give a member a freedom of choice in the manner in which they wanted to pay for medical care.

Chall

That came in later, as a very important part of your set principles, didn't it?

Cutting

So to conclude Paul de Kruif's era, it was really, before Mr. Kaiser remarried, before the fifties.

Chall

He certainly publicized the Permanente Health Plan and he also brought out the hostility, and the conservative organization of the doctors which was really at the core of the difficulty.

Dr. Sidney Garfield

Chall

Dr. de Kruif also described Sidney Garfield in ways that I wonder about. You knew him quite well, so I'd like to find out more about him. In various pages in Life Among the Doctors de Kruif said that Garfield was a cool businessman; he also called him inscrutable; enigmatic; a young man of mystery. He described him as elegant, wearing finely tailored clothes, that he moved gracefully. He wrote, "In repose, around his mouth were deep lines that had been made, I guessed, by some kind of pain not physical."de Kruif, Life Among the Doctors, 379. How do you see Dr. Garfield when you think of him?

Cutting

Well, there was a thread of truth in all of those descriptions. Dr. Garfield was really a very shy man. He did not like publicity, he didn't like to make speeches, he didn't like to be out in front.

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He was very quiet, but he was enthusiastic, bubbling with friends. When he was living with us, when he'd come out in the morning, he'd had a dream, or an idea last night, a new way of doing something. So he was really outgoing in his own realm.

But he did have a shell around him. Walking through the hospital, he didn't say hello to other people, and so on, so they thought he was kind of stuck up. But he was thinking about something else more important, and he didn't mean to be unfriendly, but he was shy. He was fastidious in his dress. To go in the service, actually just before the shipyards, he had a custom made lieutenant's uniform--[laughs] So he always liked to dress nicely, and was conscious of manners and looks.

Chall

How did he handle criticism as it came up? We'll get into more of this next week, but how did he handle criticism as it came, from, let's say, Henry Kaiser if they didn't get along on some point? How did they get along, generally?

Cutting

They got along. They'd argue, and they disagreed on a few very fundamental principles. But Dr. Garfield was able to come at it--most objections he'd come at from a different angle, he'd come around the corner and disarm the objector. He was a past master at a new approach. Suddenly, a new idea: that if what you do is no good, why don't you try it this way? If you think we ought to do it this way, let's look at it from a different viewpoint.

Chall

Is that a creative and an innovative kind of mind?

Cutting

Very.

Chall

Was he generally right?

Cutting

Yes. I think generally right, although he'd get conned into ideas that were not very reasonable sometimes. He was so anxious to help people, so anxious to get the right answers, so anxious for a quick cure, that he would buy lots of quack things, and you'd have to say, "Look, this is no possible opportunity."

Chall

What kind? Are you thinking that he might read something in a journal, not a medical journal, but somewhere else--

Cutting

Yes, or--

Chall

A cure?

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Cutting

Or hear about a doctor in New York that had a cure for cancer. I went back in response to that one time and looked at the fellow's greenhouse where he was growing some test tubes full of stuff. Of course, it really didn't amount to anything. Another one was a fellow down in Los Angeles who discovered the virus that caused cancer, under a microscope. What it was was the oil bubbles, I think, of the mounting. But, he made a tremendous presentation. Dr. Garfield, very enthusiastic about that. We said, "Wait a minute, let's take a look at this," then he'd back off.

He was so anxious to cure people, to get a quick answer, and so reluctant to give up. He would never give up on a patient. Some of the Kaiser people, their little youngsters had leukemia, and he worked night and day. In those days, there was no cure, long before chemotherapy, or x-ray.

Chall

Was it you who practically lived with Mrs. Kaiser at the time that she was terminally ill? I understand that you just moved into the Kaiser home.

Cutting

Yes. Lived there off and on but pretty much continually. A couple of months, anyway.

Selecting Physicians

Chall

So the two of you, at least, have that outlook of truly helping people. When it came, actually, to building up your staff, even though it was difficult to get physicians, let's say, between 1945 and 1948-1949, were you picky about the people that you would bring into the medical group? Were you looking for people who had specific medical and social qualifications? Social outlook.

Cutting

Oh, sure. We were trying to be very selective. We would review their medical school--some schools have better reputations than others. We would review their postmedical school training, residency training, where it was, and so on. And their recommendations, we followed up on. You can't really tell about a fellow until you work with him for a while though.

Chall

Whether he's a good doctor?

Cutting

Yes. You can tell pretty much his qualifications as a physician, as a doctor. You couldn't tell his group suitability, or his patient relationships. We tried to be as selective as we could. We never had as much trouble here in northern California as we did

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in southern California. I think because of the two medical schools UC [University of California] and Stanford. One year we took the top ten or so of the UC medical graduates; they came with us. This scared the medical school in San Francisco, so much so that they revamped their residency training program. But we got their top men as residents, training with us.

Chall

That's for resident training. But you weren't sure whether they would stay with you or not?

Cutting

It gave us an opportunity to select those we had a pretty good feel for. They were with us several years, two in medicine, and three in surgery, and we knew them pretty well.

Chall

It would take a certain interest at that time, in the kind of medicine that was being practiced, the group practice, team approach, integrated medicine, and all of that, to have them want to come and fly in the face of the opposition of the medical society.

Cutting

A good percentage of them came because I guess we were a little freer in helping, and they could do more with us, perhaps, where we spent more time teaching, but not quite as academic an atmosphere as medical school. A good percentage of them wanted to stay with us. We selected those that wanted to stay with us after they were finished.

Chall

The team approach appealed to them. I think that's about all we need to do today. ##

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Chall

Since I talked to you a couple of weeks ago I have had an opportunity to read Dr. Smillie's manuscript.John Smillie, M.D., "A History of the Permanente Medical Care Group and the Kaiser Foundation Health Plan," (unfinished manuscript in draft form), 21. I wanted to review some background with you. When the war ended, according to Dr. Smillie, the doctors who stayed on after the shipyards closed in 1945, and became a part of the beginning of the health plan among others, were: Drs. Garfield, Cutting, Moore, Baritell, Collen, Haugen--you had given me their names last week--Ash, [Thurman] Dannenberg, Lei, and Kuh.

Cutting

And Grant. You didn't get Dr. Grant.

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Chall

That's right. He was on your list. But not on Dr. Smillie's. These are the shipyard--the wartime doctors. Would you add Grant and Fitzgibbon to the shipyard people?

Cutting

Grant definitely. He came the same year that Haugen did, 1943. Fitzgibbon came in 1944.Dr. Cutting, while reviewing his transcript, listed the following doctors and the dates when they joined the health plan. 1944: Physicians with us during the war and who stayed on after the war: Sidney Garfield, Cecil Cutting, Morris Collen, A. La Mont Baritell, Norman Haugen, Donald Grant, Thurman Dannenberg, Clifford Kuh, Richard Moore, Donald Ash, James Basye, Peter Baroni, Paul Fitzgibbon, Beatrice Lei. 1945: Alex King, Robert King.

Chall

Only one among you was a woman. Who was Beatrice Lei?

Cutting

Beatrice Lei, M.D. was born in China in 1910 and joined our program in 1946 as assistant chief of pediatrics at Richmond. She has remained one of the most loyal and most respected physicians in the group. She retired in 1975 but still attends staff rounds and continuing education meetings regularly.

Although some of us have had some difficulty in understanding her if she gets excited, the mothers of her pediatric patients seemed to have no problem. She was always most highly regarded and sought after as a doctor.

Chall

Now with respect to the AMA hostility which we talked about last time, I found a sentence about that in Dr. Neighbor's interview. He said, "Gradually, the AMA, and Alameda, and Contra Costa, took in a few Kaiser doctors, maybe about five a year."Neighbor interview, transcript, tape 5, side 2, 20 September, 1974, 10. Somebody who had been a member of the Kaiser Permanente medical staff between about '48 and '52 told me that, from his perception, it looked as if there were token memberships. He thought that the AMA was taking in a few members of the Kaiser staff each year sort of as a token. It was his assumption that Dr. Garfield had made a deal with the AMA so that they would take in a few doctors in order that they would not be sued. Dr. Neighbor simply says that they took in a few, maybe about five a year. I'm wondering what you might know about that.

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Cutting

I don't know of any deal that Dr. Garfield made. Those of us who were members of the medical society beforehand, during the war, were not kicked out, but new members were not welcomed. The major resolving point of that problem, I think, was the fact that we got together on medical legal problems, malpractice problems. We found that there was a hindrance to both of us if we began to bicker over common malpractice problems, and witnessing, testifying in court, that sort of thing.

Some of the attorneys would kind of think that we didn't like the county medical society enough so that our doctors would testify against them, and vice versa. We put a stop to that by sitting down with the county medical legal committee. We found very good reason for getting together. I think that was one of the stepping stones to improving relationships.

Chall

That's interesting. How would they take in the four or five a year? Was it that people requested admission, membership, and then were granted it?

Cutting

Yes. I think there was probably just a managed delay in getting around to accept some doctors, more than what they felt they could absorb without running any risk.

The Kabat-Kaiser Institute: The Rehabilitation Centers

Chall

[chuckles] Okay, we've solved that one. I like to check these rumors out. Now the other question that I have, which comes up from time to time--I thought I'd work it over now. In 1946, this was right after you were really getting started, the Kabat-Kaiser Institute was established, apparently first in Washington D.C., and then here, in Vallejo and in Santa Monica. Did Dr. [Herman] Kabat come to Vallejo in time, and work here?

Cutting

Yes. The chronology of that: As you remember, Henry Kaiser, Jr. got multiple sclerosis, and this stimulated a nationwide search for somebody that could cure multiple sclerosis. They had a Kabat Institute in Washington, D.C.

Chall

That's where it was?

Cutting

Dr. Kabat was treating multiple sclerosis with a new kind of physiotherapy a resistance activity, and attracted Dr. Garfield's attention. He sent Dr. Richard Moore back to Washington for six months or so -- I think we went over this the other day -- and then he and Kabat moved out here; established the Rehab Center in Vallejo.

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Chall

Was it a successful venture?

Cutting

Yes. They were very active. Near the end of the war, I guess, he took on a large number of United Mine Worker disabled. Lots of paraplegics, lots of poliomyelitis victims. Very active, still is.

Chall

Yes. Under a different name, now.

Cutting

Yes. Dr. [Sedgwick] Mead was in charge for twenty years, and then Dr. [Howard[ [Liebgold].

Chall

I also read that during the period of about '48-'52, that there were some problems here. The whole McCarthy era even affected the Kaiser Health Plan, and that Herman Kabat left because, and I'm quoting here from I think Dr. Smillie, "because of unfortunate rumors about a member of his family."Smillie, "A History of the Permanente Medical Care Group," 41-42.

Cutting

Oh, I guess that would be true. There was a lot of concern of communism, and of leftist activities. Some of the doctors, some of the administrative people, and I think probably Kabat, fell under that general umbrella, too.

Chall

Rumors?

Cutting

No specific involvement that we know of.

Chall

At the same time, I understand that Dr. [Richard] Weinerman, who was then the health plan director, resigned, that he gave the reasons being administrative incompatability with Dr. Garfield. They had different personalities. Weinerman was known for his liberal political ideology, but many physicians, according to Dr. Smillie, thought the resignation had been forced by the Kaiser organization, which was trying to maintain respectability. What's your recollection of that?

Cutting

I think the Kaiser people were more worried than Dr. Garfield about the image. Probably it's true that Dr. Garfield had some pressure from that source.

Chall

You think so? So that Dr. Weinerman did resign with that pressure in mind. Well, those were hard years for liberals. Because the Permanente Health Plan at that time was really sort of a revolutionary step in medicine, was it considered, on the outside, at any rate, to be, therefore, sort of a hot bed of political liberals?

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Cutting

No question but what we were considered some kind of either corporate practice of medicine, or some kind of a socialistic, communistic group, yes.

Chall

So you were caught in the middle no matter what? [laughs]

Cutting

That's right. It probably had a little influence on our trying to be as clear as we could that we were neither one nor the other too much.

Chall

That took a while. I noticed yesterday when I was going through some of the Kaiser papers [in The Bancroft Library], a memorandum from Dr. Keene (this is in 1955) to the Advisory Council that was meeting at that time, with respect to the Kabat-Kaiser Center. They were then called the California Rehabilitation Centers. His question to the council was how either to use the centers, or how to dispose of them. He appointed a committee---Dr. Kay as chairman, Dr. Baritell, Felix Day, and Paul Steil, and asked them to report back in sixty days. Meanwhile, Dr. Keene would maintain supervision at Vallejo and at Santa Monica, as soon as Dr. Garfield could make arrangements with the Santa Monica staff. How was that resolved?

Cutting

The Vallejo unit persisted; as of today it's still active. The Santa Monica unit was sold soon after that, I think.

Chall

Why was that? Did it seem unproductive down there?

Cutting

I think interest lagged. It was an expense that was considered unnecessary, I guess.

Chall

Was the whole rehabilitation aspect of medicine taken over by the southern California group at some other hospital?

Cutting

Yes. They absorbed it, provided it.

Chall

We can ask Dr. Kay about that. But here, you kept it somewhat separate, even though it's part of the medical plan?

Cutting

Part of Vallejo Hospital. In fact, the new Vallejo Hospital that was recently built, had some federal money in it for the improvement and the addition of the Rehabilitation Centers. The money we had to spend actually cost us more than we got. When the government gives you money, it has so many strings attached. You have to widen the corridors, and do this and that, and all sorts of things that probably cost more than if we hadn't received the help. Anyway it's a very nice program.

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Establishing the Medical Group Partnership: Northern California, 1948

Chall

Moving on to 1948, things begin to take shape. February 21, 1948, the Permanente Medical Group established a partnership here in northern California. The seven partners were Drs. Garfield, Cecil Cutting, A. La Mont Baritell, Morris F. Collen, J. Paul Fitzgibbon, who became chairman, Robert King, and Melvin Friedman. They were the seven.Smillie, "A History of the Permanente Medical Group," 35.

Cutting

Dr. Neighbor was there, too, I know.

Chall

That's interesting. I don't have his name. He came down about that time. He came back, I think, in 1948, from Oregon. I think he went in then to take over the San Francisco--

Cutting

San Francisco from me.

Chall

And then you came back here to Oakland. Is that right?

Cutting

Right.

Chall

That's the date I have established.

Cutting

He was a founding partner.

Chall

Then, should we assume that Dr. Friedman was not in the original group and that Dr. Neighbor was?

Cutting

Correct.

Chall

This is 1948. When the partnership was established, this was because the organization, the whole health plan organization, was disassembled from one entity, as it seemed to exist then, to three separate ones.

Cutting

Permanente Health Plan, Permanente Foundation Hospitals, and the Permanente Medical Group.

Chall

That's right. Was there any difficulty in selecting your seven partners?

Cutting

No.

Chall

How did you determine that?

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Cutting

They were primary department heads, they were obviously leaders. I believe that Dr. Grant and Dr. Haugen were invited to join, but held out for a year before they joined the partnership, as partners rather than the founding group. I think they were all department heads, which meant that they had been either with the group for some time, or came as very selected people right after the war.

Chall

Was this a compatible group?

Cutting

Very.

Chall

Dr. Smillie, on page thirty-six of his draft, writes, "A second partnership agreement, superseding that of February 21, 1948, became effective July 1, 1949. Six of the original partners signed the second agreement. Dr. Alexander King was the seventh, replacing Sid Garfield."Smillie, "A History of the Permanente Medical Care Group," 36.

Cutting

No one replaced Dr. Garfield. Drs. Alex King and Melvin Friedman became partners in 1949.

Chall

Then, on June 29, 1949, you established the executive committee consisting of six permanent members. According to Dr. Smillie, they were Drs. "Baritell, Collen, Cutting, Fitzgibbon, Robert King, Neighbor, and two elected members."Ibid. Here he mentions Dr. Neighbor as a permanent member of the partnership.

Do you know who were the two elected members?

Cutting

Dr. Melvin Friedman and Dr. Alex King. I should be able to put my finger on the original articles of partnership.

Chall

Oh. You have your own archives.

Cutting

[chuckles]

Chall

Under the bed, in corners, and places like that. [laughs]

Cutting

In boxes--[laughs]

Chall

Well, you do have an executive committee set up now, in 1949. The six permanent members according to Dr. Smillie were to serve continuously until death, retirement, or withdrawal. In such an

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event the committee itself would appoint a successor who would become a permanent member. Elected members were elected by the partnership for two-year terms of office, as were their replacements. And then, he writes that Sid Garfield served as executive director of the health plan and hospitals, and continued as de facto executive director of the medical group.

So that even though he left, legally, in fact he still was there.

Cutting

We certainly still respected him as the founder, and he was active through the fifties.

Chall

Your six permanent members on the executive committee were to serve basically for life, unless they retired. Why did you set that up so tightly?

Cutting

I think it's a good idea. It gets politics out of the executive committee. They don't have to spend their time politicking to get elected all the time. It made for continuity, cohesive management, and I think it was probably a very good idea. The partnership changed that after a few years. Dr. [Wallace] Cook I think took Dr. Robert King's place when he died. He [Cook] was the first physician-in-chief of Walnut Creek.

That would be 1962 before Dr. King died, and I think he [Cook] came on as the last lifetime member. After that, just because there was considerable discussion whether he should be lifetime or not, the partnership decided that from then on it would be nine-years tenure. But those that were originally on it stayed on.

Chall

Is the nine-year tenure still in existence?

Cutting

I think it is five years now. The executive director was for nine years, and the physicians-in-chief have a five-year tenure, I think; they have to be reelected every five years.

Chall

Of course the organization doesn't run by committee anymore, so I suppose some of the rational behind it has changed. Dr. Cook, as I understand it, was really a fourth year resident at the time that he was appointed director of the Walnut Creek Hospital. Was that a rather unusual step for a fourth year resident to be taken into the partnership when the rest of you were long time persons?

Cutting

I think he finished his fourth year, his training in surgery, and he was picked by Ale Kaiser to be the physician-in-chief at Walnut Creek. So it would be a few years after that, 1962, that he was elected to the board. Yes, it was a little unusual, but he was a very sharp, capable fellow, and had good backing from the Kaisers.

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V The Kaiser Foundation Health Plan/Hospitals and the Permanente Medical Groups, 1951/1952Raymond M. Kay, M. D., Historical Review of the Southern California Permanente Medical Group: Its Role in the Development of the Kaiser Permanente Medical Care Program in Southern California (Los Angeles: Southern California Permanente Medical Group, 1979), 80, gives the date as April 1951. Smillie, "History of the Permanente Medical Care Group," 51, gives the date as 1952.

Chall

During those years, in setting up your medical group and in establishing the health plan, going into the community with it, you had backing from Mr. Trefethen and the rest of the Kaiser executive people. Were you generally relatively close at that time with Trefethen and some members of the boards there? I'm thinking of Trefethen primarily, but also Link.

Cutting

George Link was the attorney, Joe Reis, the treasurer of the Kaiser company, worked with us. I would say that there were no serious problems in the early fifties. It began to escalate toward the end of the fifties. Their support was there, though there was no particular activity until certainly the mid-fifties.

When Mr. [Henry] Kaiser began to get interested in the administration of the program is when problems really began.

Chall

Otherwise you had confidence in Mr. Trefethen and that board?

Cutting

Sure.

Chall

And of course you had known the Kaisers, and Ordway, and others, from your experiences in Grand Coulee and during the war. It would appear, as you've already said, that some of this controversy developed in the fifties, when Mr. Kaiser began to be more interested in the development of the administration of the health plan.

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One doesn't like to play the "what if" game, but I sometimes wonder what if Mrs. Bess Kaiser hadn't died when she did, whether there would have been this impetus to take a close look, the same look, into the plan, as Henry Kaiser did, or whether, in time, it would have become so big that reorganization would have been necessary anyway. But it might have taken place without some of the hostility.

Cutting

I think that probably the growth would have required a greater separation of the three factors than we envisioned at that time, certainly.

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Cutting

The eventual solution was very healthy. I think if it continued to be a medical group operation, primarily--controlling the health plan and hospitals, and so on--we would have been less inclined to expand and grow. A physician group doesn't borrow money on what it's built to build more, to borrow money to build more, the way an industry-inclined organization does. On the other hand, certainly if the Kaiser industrial side had become more dominant, I think the program would have suffered, would not have been able to attract good physicians, and we would have been much less effective.

Building the Hospital in Walnut Creek and the Ramifications for the Medical Care Program

Chall

Then now we can start going into the problems that developed, and how they were resolved. I think the first was the fact that Henry Kaiser married Alyce Chester. They decided, I guess, together to build the Walnut Creek facility, and from what I can gather from Dr. Garfield's interview, he was behind it. It was an opportunity for a show piece in terms of the hospital and the development of health plan in an outlying area.Interview of Sidney Garfield by Daniella Thompson, transcript, tape 3, side 1, 6 September 1974 (Audio-Visual Department, Kaiser Foundation Health Plan), 14-15.

Cutting

Yes. There was question, even in Dr. Garfield's mind, as to the advisability of putting our money there in Walnut Creek, rather than San Francisco, or elsewhere.

Chall

Where you were planning already to build.

Cutting

But the idea of having a program there wasn't--it was only a matter of whether that was the time to do it, to put as much money as it would take there, when the potential membership growth was in San Francisco rather than the Contra Costa County area at that time.

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Historical Development and Operating Concepts

With the continuing rapid growth and success, the stresses of decisions as to goals and purpose, use of funds, and where to improve and expand our facilities began to create administrative complexities requiring more and more attention. Honest but strong differences of opinion began to appear.

Mr. Henry Kaiser's increasing interest in public medical care was another significant factor in that period of metamorphosis from our single entity to the complex assortment we now have. His increasing participation in the program's administration began to emphasize the dichotomy.

Forging the Partnership

Several factors, then, played a significant role in our organizational development: transformation of the program from an industrial to a community base, the rapid growth in membership and area, the need for capital investment, and Mr. Kaiser's growing interest. It was only after several years of sometimes painful negotiation between the Kaiser management and the medical groups that a legal modus vivendi was achieved. It was several years more before traumatized feelings were diminished to the point that the spirit of joint responsibility and partnership began to emerge. By then the legal contracts were hardly necessary. Trust and mutual respect proved far more effective for progress than the most carefully-couched documents alone.

The welding together—I use the term advisedly since at times it involved considerable heat—the welding together of a strong, aggressive lay management with a resolute, highly principled, and contentious group of physicians is probably unique in health plan and hospital-doctor relationships. The mutual respect, consideration and responsibility to each other that emerged has surely been a major factor in the unusual growth and strength of our program. Each of the now six regions operates under the collaborative administration of a regional manager for health plan and hospitals and a medical director responsible to his autonomous Permanente medical group. The areas of responsibility of each are delineated with care in the various contracts, but the mutuality of interests commands concordant judgment.

The Kaiser Genetic Code

Clearly, the program was not preconceived but developed in response to changing circumstances. There was a set of operating concepts, however, that was recognized early in the program and which has remained essentially constant throughout. They were as applicable to our single entity as they are to our complex organization today, which tends to support our faith in them as the six "Guiding Principles." Dr. Ernest Saward has since described them as our "Genetic Code." Described somewhat differently at different times, they remain the basic principles of our operation. Our goal was to provide good quality medical care at reasonable cost. The principles are:

1. Group Practice

Today, I do not have to describe to you the concepts or advantages of group practice; but in the Thirties and Forties it was still a relatively new approach to the practice of medicine. There is no doubt that the multispecialty group organization represents a step toward more efficient coalescence of medical specialists, more effi-

An excerpt from Cecil C. Cutting, M.D., "Historical Developments and Operating Concepts," in The Kaiser-Permanente Medical Care Program, Anne R. Somers, editor.

Building the Hospital in Walnut Creek and the Ramifications for the Medical Care Program

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Cutting

It certainly is true that Mr. Kaiser and Ale were more interested in developing something there in Walnut Creek, and I'm sure persuaded Dr. Garfield that, "If we're going to do it, let's do it right, and let's get with it enthusiastically," which we all did.

Chall

In time, of course, it did create some controversy within the medical group, both north and south, because of the concern that money was being siphoned off from the building of the San Francisco and Los Angeles hospitals. That was one. I guess the other one might have been that Mr. Kaiser and Ale chose their own staff without going through any channels that might have been set up for personnel. That would have been your medical group, of course.

Cutting

Yes, that created a problem. Mr. Kaiser--of course his basic philosophy was that anything that he's a part of, he runs. He felt, very strongly, I think, that the medical group should be employees of the health plan. Employed physicians rather than a separate medical organization contracting with the health plan. He felt that Walnut Creek should be a separate medical group, that each of the areas should be separate.

The medical group thought that that would be difficult. Members went from one to the other, and so on. Obviously, it seemed to us, the reason for wanting to break up the medical group would be that each would have to negotiate with the Kaisers for the contract, for the percentage of health plan dues, and so on. So it would throw the entire management of the program with the Kaiser side rather than the medical group and that was enough to make us feel we should maintain a single large partnership.

Chall

In that case, my understanding is that Garfield really took the side of the doctors opposing Henry Kaiser on that score, which created ill will between them.

Cutting

Dr. Garfield got squeezed in the middle, there's no question about it. His loyalty and respect, admiration of Mr. Kaiser was undoubted and it was well founded. Mr. Kaiser was a magnificent person, but he had to run things. Dr. Garfield felt that it should be a medical program, and he argued with Kaiser day after day, night after night. Which somehow or other didn't decrease Mr. Kaiser's respect for Dr. Garfield personally, but he managed to squeeze Dr. Garfield out of the program.

Dr. Garfield felt that the medical group should be developing a war chest--money to stand up on its own hind legs. If you didn't have any money, you couldn't argue with the Kaisers. I think he

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expected more backing from the medical group than he got toward the last of his management days. A few of the doctors were a little bit restless under Dr. Garfield's continued, very careful, very cost conscious management.

They felt that he should spend more money on equipment and so on. The Kaisers picked that up, and got commitments from a couple of doctors that Dr. Garfield really wasn't the perfect manager. Mr. Kaiser used that to ask Dr. Garfield to step down.

Chall

What was the reaction within the family? Dr. Garfield was married to Alyce Chester's sister, and Garfield and Henry Kaiser were at odds over some very basic principles. Did that affect the family relationships in any way that you know?

Cutting

I don't think so. I think it's interesting that it didn't. I think, as I said, Mr. Kaiser continued to respect Dr. Garfield's judgment, except his feeling that doctors ought not to be in any part of the management. But other than that, the concept of the prepay, group practice was respected by Mr. Kaiser.

He was proud of the program, the medical care program, which he began to call his. As I say, Dr. Garfield respected Mr. Kaiser. They would spend hours together arguing, but each could stand that without losing any personal goodwill or developing any animosity. Quite unusual, I think.

Chall

Yes. So they actually moved the problem solving to the organizations, that is, between the medical groups and the Kaiser organization, and even though the two of them were in the center of the controversy, it didn't affect their relationship.

Cutting

Dr. Garfield continued to be Mr. Kaiser's physician. Dr. Garfield left no stone unturned trying to get as much help as he could for Mr. Kaiser, and practically lived with him, gave him his prescriptions, and so on.

Chall

It's quite remarkable when you think about it in terms of personal relationships. How did it come about, that you know, that the name of the hospitals and the medical plan were changed from Permanente to Kaiser?

Cutting

The Permanente name was a favorite of Bess Kaiser's. Everything was Permanente, practically, during the wartime. Permanente Steel Company that was builder of the ships, Permanente Cement Company-- she liked the name. After she died, and Mr. Kaiser became more

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interested, more involved, in the health plan, he kind of wanted it to be Kaiser Foundation Health Plan. I think he instigated that. There are others that say someone else did. I think Dr. Smillie said that. I'm not sure.

Chall

Dr. Kay, in his book, writes that Henry Kaiser approved of changing the name, but as I think about it, you don't approve anything unless it's been proposed to you first.Kay, Historical Review, 79-80. I just don't know where the proposal came from.

Cutting

I happened to get a letter from a fellow by the name of Stubb Stollery, who was kind of a public relations man in the Kaiser company at that time. He said that he suggested the name, the Kaiser Foundation Hospitals and Health Plan. I'm not sure that it was really his idea. But anyway, Mr. Kaiser did accept it, and wanted the medical group to change. We decided we'd rather maintain a sense of identity of our own. Permanente seemed to be working all right. It was sort of a peculiar name, but it was what we'd gone under, no reason to change it.

The Concerns of the Physicians in Northern California

Chall

Yes, I think it also allowed you to indicate an independence from the business end of things, which I guess you'd always been criticized for anyway. Dr. Smillie indicated that before you formed your Working Council, you were beginning to be concerned about a change in attitude toward Sidney Garfield. [generally quoting from Smillie, page 70] You were concerned about the board entering into management, about lay domination of medical groups.

It seemed gradually to be evident that the trustees favored a sharp separation of the health plan, the hospitals, and the medical groups, and these kinds of concerns I guess ultimately led to your asking for the Working Council.

Cutting

I think I would have put it just a little differently. I don't think the Kaiser people were anxious to separate the medical group. I think they wanted to assimilate the medical group. Probably partly as an offspring of the county medical society criticism, and so on, we became more and more sensitive to being called Kaiser doctors. "You still working for Mr. Kaiser?" We said, "No, we never did work for him, we had our own medical group." It was a gradual build up through the years to that.

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The development of the Working Council really, I guess, was a culmination of that kind of difference of feeling. Dr. Garfield was removed from the administration several years after the partnership formed, really. He had continued helping us for two or three years, tapering off. We were on a percentage of health plan dues--payment to the medical group. This meant negotiating between 48, 49, 50 percent, and so on, which became pretty awkward, pretty clumsy. We were a medical group forecasting our budget, what we felt our needs were, to provide good care, negotiating with a separate industry group who really didn't know anything about the medical care program. They were steel, and cement, and concrete. Busy and tremendously successful.

But we felt that there was nobody there that really worked in the medical program. They'd meet and make decisions, but nobody was on the front line of the medical care program. This is where we had our problem of accepting their administration, when they weren't really a part of the program at all. Not necessarily a medical group, but a health plan. They'd sit on a board, but they didn't know what was going on.

Chall

That's why you needed Dr. Garfield there in between?

Cutting

Yes, that's right. So we became more and more at odds. There were differences of opinion of how money should be spent. Expansion: Should we build in Redwood City and Santa Clara? This sort of thing. Do we need microscopes, or do we need new curtains in the hospital, electric beds or not? This sort of thing which they were, in effect, making decisions about, without being involved in every day, day-to-day work.

Chall

Didn't your executive committee get into that sort of discussion, too?

Cutting

Yes. Sure.

Chall

I note from Dr. Smillie some of the really very minute kinds of problems that you would be concerned with aside from medical group policy.

Cutting

The medical group was run by committee, really, from '48 to '57. We had sub-committees: somebody was in charge of personnel, somebody of financing, and so on. It worked fairly well. But after the contract, the Tahoe agreement, it became obvious that we needed a new kind of organization.

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Chall

Was your medical group presenting certain kinds of matters to the board of trustees, then finding that they might not have understood them, and ignored them? Made decisions that you didn't agree with?

Cutting

Yes.

Chall

Were these the kinds of concerns that led to the request for leave of absence in June 1953 of Dr. Fitzgibbon, and October 1953 of Dr. Baritell?Smillie, "A History of the Permanente Medical Care Group," 55-56. Was this because they were concerned about Kaiser management, attempts at management of the medical group? Exactly what was that problem?

Cutting

The worry about the Kaiser influence was what bothered Dr. Fitzgibbon, no question about it. He said, as he sees the future, "We're going to be dominated by the Kaiser people, and it'll be another staff employed physician kind of arrangement." And that's why he left.

Dr. Baritell's problem was different, I think. Probably difference of a philosophy of spending money with Dr. Garfield, between him and Dr. Garfield. And Dr. Collen. He and Dr. Collen and Dr. Garfield didn't get along too well.

Chall

That's Collen and Baritell versus Dr. Garfield?

Cutting

In a way. And certainly Baritell against Collen and Garfield.

Chall

Is that so

Cutting

[chuckles] Yes. They were both very bright men with sometimes divergent ideas as to process.

Chall

[laughs] Let's see, Dr. Collen, December, 1953, "submitted his resignation as the medical director of San Francisco, over the appointment of Felix Day as administrator of the San Francisco Hospital."Smillie, "History: Chronology," 2. But he didn't resign from the organization as Baritell and Fitzgibbon did. What was going on?

Cutting

Dr. Baritell left, intending to leave, but I talked him into coming back, actually. Baritell was a very bright, very astute man. A good surgeon, he was chief of surgery then; I thought an asset to

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the group, and really talked him into coming back. I think some of the other fellows really thought that he shouldn't come back. He did, and he was welcomed back.Smillie, "A History of the Permanente Medical Care Group," 56. See also, S.R. Garfield, M.D., M.F. Collen, M.D., C.C. Cutting, M.D., Permanente Medical Group: "Historical" Remarks (presented at a meeting of Physicians-in-Chief and Medical Directors of all six regions of the Kaiser Permanente Medical Care Program, 24 April 1974), 7-8. Dr. Collen's separation was different than that. He never dropped out of the group.

Chall

No, he didn't. He just left the San Francisco Hospital.

Cutting

Was that 1953?

Chall

Yes. I have it from Dr. Smillie as December 1953. Let me check. This is Smillie's draft, page 56. "Dr. Baritell resigned from the medical group suddenly and unexpectedly in mid-October 1953. The letter of resignation which spelled out a variety of complaints, received untimely publicity in the Bay Area newspapers. Dr. Garfield met with the Permanente Medical Group Executive Committee, in a special meeting to discuss the substance of Dr. Baritell's complaints." I won't go on into that.

And then, "After Dr. Garfield left the meeting, a statement was drafted affirming adherence to the principles and ideas of the Kaiser Foundation Medical Care Program. However, (now he quotes from somebody) `recent events have brought to the surface some crucial problems which are existent between the Permanente Medical Group and the Kaiser Foundation.' To overcome these problems and institute the most satisfactory relations between these associated entities, the committee recommended:" and then there's a list of six recommendations.

[tape turned off while Dr. Cutting checks his records]

Cutting

Dr. Collen was physician-in-chief of the San Francisco Hospital from 1955-1961.

Chall

So he wasn't part of that 1953 ferment of resignations. You don't think he left in 1953 over the appointment of Felix Day? It was later?

Cutting

Nineteen sixty-one. That was after Tahoe. That was in order to head up a health plan in San Diego, that the medical group planned to establish.

Chall

We seem to have a difference of opinion on dates. It will get straightened out.

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You said Dr. Baritell was opposed in principle to Dr. Garfield on matter of economics. Was that it? Financing?

Cutting

Yes. He thought we ought to spend more money on equipment maybe than Dr. Garfield felt we had money to spend. Perhaps wanted more doctors, more nurses, things of that sort. Spending--

Chall

Rather important.

Cutting

Yes. Dr. Baritell, as I said, was a brilliant man, but he was quite concerned about his own ability to survive and to make the program survive.

Chall

And why would Baritell have had differences of opinion with Dr. Collen?

Cutting

They were both very strong characters, and Dr. Collen was interested in research. I think the time that they really got into loggerheads was after Dr. Collen left the San Francisco unit, and became head of Medical Methods Research. I think just personality differences, primarily; both very strong people. Dr. Collen is a very brilliant man, with you might say telescopic vision as to what he wants to do, and then he'll do it. And Dr. Baritell was a very brilliant man with telescopic vision [laughs] and what he wanted he was going to get, and it didn't always mesh.

Chall

And Mr. Kaiser had his telescopic vision.

Cutting

Oh, yes. [chuckles] Very strong personalities, and when you mix them together, you either have turmoil, or hopefully you come out with a pretty strong soup at the end.

Chall

What is interesting then, since you have these people, Baritell, Collen, Fitzgibbon, for some years on all your various working committees, was the fact that you had to work together. They must have been pretty stormy meetings from time to time.

Cutting

The executive committee meetings were stormy sometimes. Yes, differences of opinion. But in the discussions with the Kaiser people, there were pretty much common interests there.

Chall

Yes. Protecting your turf together.

Cutting

That's right.

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Chall

You could fight among yourselves, but not show division. For about a year and a half after Baritell and Fitzgibbon resigned, there apparently was something going on that was satisfactory enough, because it wasn't until April, 1955 that you suggested a Working Council to Mr. Trefethen. Then from April '55 until after Tahoe, and long after that, you all had to work out these concerns.

Cutting

That was the period of building up dissatisfaction with the decisions that were made--the percentage of the health plan dues that the medical group was getting, decisions as to expansion, purchasing of facilities, and where to spend the money, and so on. This continued until '55, when it reached a point where we said, "Look, things are going to explode here. We've got to sit down and try to settle the differences."

Chall

I gather that there was some concern that if you didn't, that the whole thing was going to fall apart.

Cutting

No question about it. Expansion was stopped, membership was stopped, spending of money was stopped, everything ground to a halt.

Chall

During that period? That was one of the objectives at the time. I think one of the letters setting up the Working Council said that for the six months or so that we'll be meeting, everything should remain at the status quo. However, since you were all meeting almost constantly, I'm not sure how you could have done very much during that period. [laughs] At all. I don't know how any of you even practiced medicine.

Cutting

Not exactly productive years, no. [chuckles]

The Southern California Medical Group and the Health Plan

Chall

The southern group and the northern group had some differences of opinion with respect to organization even from the earliest--

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Cutting

You said there were some differences between southern California and northern California.

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Chall

Yes. I think I'm taking this information from Dr. Kay's book.Kay, Historical Review, 82-83. Regarding the northern California group, this is from Dr. Kay, their "experience convinced them anew that the Medical Care entities should be under the control of physicians, that the Medical Groups should have representation on the Board of Trustees, of the Health Plan and Hospitals, and that Sidney Garfield should be the primary bridge between the Medical Groups and other medical entities."

It seemed always that the north wanted representation, and rather quite a bit of organizational overlap, whereas the southern California group agreed, in general, but felt that the Kaiser organization had a great deal to contribute, "and we must find a way to work together."Ibid., 56. To continue quoting Dr. Kay: "We did not believe that representation on Health Plan and Hospital Boards was the solution, but rather an organizational pattern had to be found that assured the Medical Groups of: control of medical care; security against replacement, competition, or undesired fragmentation of our groups; a mutually satisfactory integration of management activities that utilize the Kaisers' contribution in arranging financing and furnishing business expertise without interfering with the delivery of medical care."

So that was some difference of opinion.

Cutting

No, not really a difference of opinion.

Chall

Organizational difference?

Cutting

I think the distance in mileage between northern and southern medical groups made our position a little stronger, a little more heated, we'll say. Vancouver was farther away, and it wasn't bothered much at all. So that it is an inverse relationship between the distance and the activity. Ray Kay also thought we ought to be on the board, but he didn't carry it on quite as long as we did. We pushed a little harder.

Chall

Was that because those of you in the northern California group, particularly the ones who were the leaders, had really been within the organization and the health plan since almost the beginning, and were quite concerned about anything happening to it?

Cutting

We certainly were.

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Chall

Whereas they weren't?

Cutting

Yes.

Chall

They didn't have that long history.

Cutting

They didn't have the long history, they were farther away from day-to-day relationships. Ray would come up and he'd get into the heat of the argument, the Advisory Council and so on; we were thinking in the same direction, but he could stand off and be a little more gentle, perhaps, than we felt we could be.

Incidentally, Mr. Kaiser did not want us to move to southern California.

Chall

Yes, I recall that. And it wasn't until you really had this offer from DeSilva that you did so.

Cutting

Well, the longshore people came first, and then DeSilva.

Chall

But I guess it was DeSilva's group that pushed you into Los Angeles, as such.

Cutting

That's right. Rather than Harbor City.

Chall

Yes. Were you interested, though, in the northern California group, in moving to southern California, not just because Dr. Garfield had promised this to Dr. Kay, but because you felt it was a wise thing to do to expand?

Cutting

Yes, we thought that with Ray Kay's interest and involvement, his ability, that they could form a good group down there, and we thought it was a good idea. The monies from the Permanente Foundation that we had built up during the wartime was used really to help southern California get going. Although Dr. Kay, I don't think, accepts that idea. [laughs] He knows it.

The Tahoe Conference: Preliminaries and Follow-up, 1955-1958

Chall

Before you set up the Working Council, there had been meetings between the Kaiser people and the medical groups, but since you really weren't getting anywhere, it was decided to do something quite significant and set up the Working Council.

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Cutting

It was really an attempt to make them get involved. If they were going to run their part of the show, we thought they ought to get involved, and spend some more time learning what the program really was. Our feeling was that if they were going to make any decisions, let's have it based on the day-to-day conferences; knowledge of the program.

Of course, obviously, they couldn't spend that much time. They, in directing the hospitals, made the hospital administrator their employee, which brought the medical group into immediate relationship with the hospital administrators; it didn't do that relationship any good. The hospital administrator having to look over his shoulder to the Kaiser people, rather than sitting down with the medical group and working together.

Chall

That is done now, of course. There is a working relationship.

Cutting

Yes, cleared up very well now.

Dr. Clifford Keene

Chall

Before even your April memo to the board, to set up the Working Council, I saw in the Kaiser papers, a memo from Dr. Keene to Henry Kaiser and Mr. [Tod] Inch relative to this problem, in which he said that there was a lack of communication between the physicians and the controlling boards.Clifford Keene to Henry J. Kaiser and Tod Inch, 3/14/1955, Henry J. Kaiser Papers, Series 2, Carton 116, The Bancroft Library, University of California at Berkeley (hereafter cited as TBL). He suggested that there be either some kind of written communication from the Kaiser organization to the doctors on some kind of a regular basis, by meetings or a bulletin, which would inform them of the Kaiser administration's point of view, or an opinion survey by a personal interview or questionnaire. But, he suggested that it would be much better to have some real contact--meet together in some way and try to educate one another.

So that even at that time, before the Working Council, there was concern on the part of Dr. Keene as to what was going on. Now, Dr. Keene was caught in the middle, too. Can you explain what you know about Dr. Keene's coming in, and the point of view of the medical group towards Keene?

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Cutting

Of course, Dr. Keene came through, as we talked about earlier, finishing his stint with the army, on his way to Willow Run. When Willow Run closed, Dr. Keene, I believe, was thinking of going to a steel company in Philadelphia, or something, but this was just at the time when they were putting the skids under Dr. Garfield. Mr. Kaiser, I think, wanted Dr. Keene to come out and join the group here.

If Dr. Keene had come out as assistant to Dr. Garfield, would have worked with him for a few years, or to be a member of the medical group and get some knowledge of the program, it would have been quite a different story for him, I think. When he came out, he says Dr. Garfield invited him, which I think was probably on the surface true. I think Dr. Garfield, if he did invite him, expected him to work with him for a while.

But Dr. Keene, in my view anyway, came out feeling that he was responsible to the Kaiser side, and he, without any qualms, said that that was his boss, Mr. Kaiser, Edgar, and Trefethen--that was his allegiance. Which put him, at that time, pretty much in limbo, and not really acceptable to the medical group as a spokesman for us, because he hadn't worked with the program. We felt that he really didn't know anything about it.

So we were fairly adamant that he not be in a position of management of the program. And at Tahoe, we were promised that he would not be, which promise held for about two weeks.

It was obvious, of course, that the Kaiser people were not that involved. Here they had by this time maybe five, six, seven, hospital administrators, always responsible to them. They couldn't take time. Mr. Trefethen couldn't have seven hospital administrators responsible to him, or he for them; and running the whole shipyard, or steel, cement, aluminum, and so on. So that it was natural for them to need somebody, though it was not really ever accepted very well by the medical group.

Chall

Even after the arrangements had all been set up through the Tahoe meeting--although that took a couple more years--but even then, when Dr. Keene was appointed to a position of authority, he was still not accepted, I understand, by the medical groups. So that Dr. Keene had a hard role there. It would be pretty tough to stay in as long as he did.

Cutting

A very difficult position. I don't envy him at all for that problem. He's a very capable man in many ways, but if he'd gotten off on the other foot to begin with, I think his would have been a much happier life.

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Chall

So, was there always some animosity, all the time that he was employed?

Cutting

I wouldn't say animosity perhaps, but there was never whole hearted acceptance of his role as president of the health plan and hospitals. We accepted that, as a title, but the role of speaking for the program, or certainly for the medical group was difficult.

The Working Council

Chall

The Working Council members in northern California were Baritell, Collen, Cutting, and Neighbor. Did your executive committee appoint them?

Cutting

I'm sure they must have, yes.

Chall

There was also the problem that Mr. Kaiser was interested in setting up a number of medical groups. Not only starting it with Walnut Creek, I guess, with that idea, but that he really was interested in the formation of small partnerships.

Cutting

I really don't know, don't remember, particularly. Except the Walnut Creek, and of course, then Hawaii later, he did by himself, or started by himself. He talked about the program being so great it should be spread around the country. But I don't remember any specific area, or certainly any group, that he had in mind.

Chall

Well, he did have in mind the formation of small partnerships. That was one of his major concerns, along with everything else here.

Cutting

He thought the smaller the better as far as the partnerships, and negotiating the contract with him would be the way to control them. It sure would have been.

Chall

And to set up competition.

Cutting

Competition was always great, yes. Let's compete within the medical group over members, and so on. That would give him leverage to give a better contract if he felt that one group was doing a better job than another. It would give him complete control.

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Chall

That's another area that you opposed. A subcommittee was appointed to study this proposal, made up of Collen, Baritell, Reis, and Link; but they couldn't quite see how they were supposed to come up with anything there. So I don't know that that came to anything.

Cutting

I think that's the story of management by committee. You don't get anywhere. It's an impossible kind of management.

Chall

There were other committees, other concerns. I think these are all pretty well documented. You might some day want to go over it, but I don't know that it's necessary for us to go over every single meeting. I notice that you all had differences of opinion about some of these things.

At one of the meetings, you were concerned about this whole matter of integration of the program. Trefethen proposed that the committees consider the word, "teamwork" rather than integration, to see if you could handle it that way, regarding management activities of the health plan, the hospitals, and the medical groups. I don't know that that opened up the log jam, but it gave you an opportunity to think of it in a different direction. Did it?

Cutting

Oh, not significantly, I don't think. Little better feeling; it puts you on a team, but really nothing of the Working Council had any great momentum; momentous decisions.

Chall

And yet you worked awfully hard.

Cutting

Awfully hard. Drew diagrams, responsibilities, management tables, and all kinds of things.

Lake Tahoe

Chall

Trying to come up with a solution to something that you had been doing more or less, as the engineers would say, by the seat of the pants. It had been working, and I suppose nobody wanted to give up his way of doing it.

Then I guess we get to Lake Tahoe. That was your last meeting of your Working Council. According to Dr. Smillie, it was contentious and heated, with posturing, demands, counter demands, with both sides taking time to caucus. Mr. Trefethen claims it was

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the toughest of all the meetings. "Each side," according to Dr. Smillie, "gained and each side gave up something."Smillie, "A History of the Permanente Medical Care Group," 78. [Mrs. Chall reads passages from the Smillie manuscript, pages 78.]

Why don't you just free associate here a while on the Tahoe conference.

Cutting

Obviously, Lake Tahoe was a traumatic period. We had the feeling that we would either come back with some sort of a compromise, or we'd have no program. Because if neither side gave sufficiently, nobody really wanted to work together. In the medical group, of course, the physicians have the ability to go out and practice on their own, so we don't feel we were captive, but we did believe in the program, and wanted to see if it would work, and we weren't sure that it would work under complete industry domination.

As you say, we had caucuses, and table pounding. The Advisory Council was a way that we finally said, "Well, maybe we can work this thing out, we can try for a while," but I don't think anybody was terribly enthusiastic about having an Advisory Council.

The Trefethen Plan: The Contract

Chall

Because you'd been through the Working Council.

Cutting

I think the thing that broke the road block was Mr. Trefethen coming up with the specific contractual relationship. We hadn't really talked about that too much. We admitted that a non-profit hospital and health plan couldn't really be run by a medical group; a medical group is a profit organization. So the management of that by industry seemed to be acceptable in concept, provided that it would work out personality wise and so on.

The idea was of a contract which gave the medical groups prepaid money, in other words, we got a share of the prepayment, so that we indeed were at risk. We had the responsibility for the medical care of the membership for a fixed amount of income. We all agreed that the hospitals should survive, so they would be entitled to a cost allocation.

I think Trefethen's first idea also was that anything left over between the contractual payment to the medical group and the hospitals' needs could be split fifty-fifty. Whether that was all

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worked out at Tahoe, or in the Advisory Council--within a few months, really, the pieces seemed to begin to fall together pretty well. And of course we had infinite detail of problems. Would the medical group get the non-membership income? We had a lot of private patients. Should that go to health plan, or not? Industrial work the medical group did was really not based on the health plan. Should that go to the health plan? So working out those relationships took a matter of several years, really.

The relationship between the hospital administrator and the medical group that I alluded to before was a problem. They were looking over their shoulder for their promotion, and kudos, from the industry side, and yet the medical group was trying to work with them.

##

Chall

You had to agree too on what each group meant by quality care and cost-effective care.

Cutting

That, of course, had been a prime motto, a prime reason for our beginning, for our ever getting into a medical care program, and certainly for continuing it as a community program after the war. It was the fact that we were providing a good quality of care, and at a reasonable cost. That's really what sustained the medical group in its criticism by the medical societies; that we felt that we were providing good quality at less cost than they were, and they were criticizing us. So that was nothing new as far as the medical group was concerned.

Chall

No, but it is a matter of controlling costs.

Cutting

Management controlling costs. Sure.

Chall

And I guess that's where differences of opinion came up.

Cutting

Sure. We have two parts of a program with different concepts of what is quality care, and so on. It's difficult. It was a two-headed monster of an organization, and it still is, but we've learned to work together.

Chall

How do you look upon Mr. Trefethen in all of this?

Cutting

Certainly in the Working Council days, and before then, he was acting for Mr. Kaiser. I think he believed, probably, in what he was having to say, and I remember his pounding the table and saying that, "Anything we're in, we run." I'm sure that was as much a reflection of his reporting for Mr. Kaiser as it was his own management idea, although he's a powerful manager in his own right.

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As I say, I think it was his concept of the contractual relationship that broke the ice, that broke the stalemate. I give him credit for that.

Chall

And therefore saved the program.

Cutting

Yes.

Chall

Can you give me a little picture of how he operated in contrast, let's say, to Henry Kaiser. They were very close, and he was his spokesman. What was their difference in style?

Cutting

Mr. Kaiser would come blustering in; he was too busy to argue, you couldn't argue with him. He would put his declaration down, and then get out. He didn't want to be a part of the nit-picking discussions, and so on, and Mr. Trefethen had to sit there and take our abuse, and try to present his conviction.

Chall

Did he have a quiet way about him, or quieter?

Cutting

He was fairly bombastic. He was a hard manager. You had to be to run all of those other industries, negotiate with unions, and negotiate with purchasers, and so on. He was calm, but hard.

Chall

How about the rest of you. Were you emotional? Were there calm heads among the medics?

Cutting

Oh--

Chall

Were you mostly emotional? [laughs]

Cutting

A lot of emotion there. When we'd get off to ourselves, we would calm down, and plan, and see where we were. But the rigidity of the meetings was uncomfortable for us, and we'd tend to get a little emotional, I'm afraid.

Chall

The rigidity of the meetings as well as the problems that you were dealing with.

Cutting

Sure.

Chall

Dr. Kay, in his book, has indicated what the main problems were, and how the reorganization took effect. I would think that's a relatively complete account.

Cutting

I think one of the important decisions, whether it came as soon as Tahoe, or soon after, anyway, was the fact that employees of the departments, even though they were in the hospital--x-ray,

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laboratory, physiotherapy--those things that were really controlled by the medical group, had a physician department head. Those employees became medical group employees, rather than hospital employees, which they ordinarily would have been.

Chall

Is that the battle over the ancillary services?

Cutting

Yes.

Chall

Yes, that seems to have been a sticky point.

Cutting

I'm not sure whether Dr. Kay's contract arranged for that or not. That was one of the sticking points in the northern California region, anyway.

Chall

Yes. I noticed that Dr. Kay and Mr. Trefethen worked out the contract dealing with some of these reorganization matters. Then, when they were found to be working, after, I think, a trial run of about eighteen months, they brought it up here, and the northern California group accepted it.

Cutting

They brought it up to us the same time they took it down south.

Chall

But you didn't accept it.

Cutting

We were hesitant, we were still arguing about some of the points. Dr. Kay was far enough away to feel that he had a little more control of things. I think distance, as I said, made that a little bit easier. So he signed the contract, essentially the same one that was presented to us. So we were still nit-picking, paragraph by paragraph.

We thought he signed a little bit too easily, too quickly, though I'm not sure that we gained too much by going over it word by word in the contract. We got some changes, mainly things that were in the base period, upon which the contract was based, and so on; handling of industrial and non-member income, the employees of the ancillary services. But essentially the same contract. We were just a little harder to buy.

The Northern California Medical Group Selects Cecil Cutting as its Executive Director, 1957-1975

Chall

[laughs] You were. Now, shortly thereafter, at least in 1957, and this was all resolved about that time, it was determined that after almost a decade of experience with the executive committee

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of the medical group, that it would be better to have an executive director for the group. There was a contest among three of you. I think it was among you, and Dr. Collen, and Dr. Baritell.

Cutting

Seemed to be the prime nominees.

Chall

Right. And you came out ahead. How do you account for, one, the decision that you should have an executive director rather than continue working by committee, and secondly, that you won the spot?

Cutting

By this time, the Advisory Council had vanished. Dr. Keene was getting pretty well established as the representative for the board. His relationship with the hospital administrators, and so on, was not particularly to the medical group's advantages. It just seemed that the committee was not able to really negotiate with the regional managers that were appointed, the hospital administrators, and so on.

Since there was by this time a regional manager in each region, a single person, it needed a single person to negotiate with him. Incidentally, the regional autonomy was an important concept in the Tahoe agreement, and I think it's still a most important, significant concept of the program.

I think Dr. Collen first vocalized the need, or the desirability of having a single person to meet with on a day-to-day basis, with the regional managers. I think Dr. Collen probably felt that he could do that; Dr. Baritell felt that he could. As we said before, they were both very strong people, and each a little controversial, and I guess the rest of the committee finally decided maybe someone with a little broader viewpoint, or not as controversial, might be more acceptable to the medical group as their representative. They thought maybe I could do that.

Chall

Do you look upon yourself as a moderating influence, and was that a role that you played during all these heated meetings in those several years?

Cutting

Yes, I somehow could moderate the two extremes, could get along with both sides, the industry side as well as ours, a little more quietly and more effectively, I think. I think both Dr. Collen and Dr. Baritell were brighter, they were more dynamic people than I, but I did seem to have the ability to calm things down a little bit.

Chall

They must have felt that was important, after all these years of battling.

Cutting

Kind of tired of fighting.

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Surgery and Administrative Duties

Chall

Yes, it is tiring. Does that mean that you gave up the practice of medicine?

Cutting

No, not entirely, although I had to begin to taper it off. I never really quit entirely, although to all intents and purposes, I did the last five years, 1970-75. It did give me freedom of administrative responsibility in the medical center, and it gave me the opportunity to limit my medical activities to a few areas that again were on the leading edge of medicine, really.

Because of my traditional position, and somehow respect that I was given, I could take chances that other surgeons couldn't. I did the first thoracic surgery, a few cases, until Dr. [Donald] Grant, and others came along, took over, and did a better job than I. This is in a period when heart surgery was just beginning. The first that came along was the patent ductus arteriosus surgery; the little blood vessel, the short circuit between the heart and the lungs that's open before birth, and has to close at birth. Sometimes it doesn't. It was just about the time that Dr. [Robert] Gross, in Boston, discovered that you could go in and tie off that little ductus that didn't close, otherwise the patient would die around age twenty, or so.

So I took a trip to Boston, and watched him operate a few times, and did some dog surgery, and so I began. We had quite a backlog of those cases then, because it was new. Then, the coarctation, a narrowing of the aorta just below the arch, about the same point where this ductus came in, was another congenital abnormality that led to, usually, early deaths, at twenty, twenty-five.

That was just beginning; to realize that we could go in and cut out that narrow section and sew the arteries together. I visited a few centers that were doing that, and came home and started. Then again we had quite a backlog. Similarly, the mitral stenosis, a narrowing of one of the valves of the heart, was a cause of disability. Particularly forty, forty-five year old people began to have heart failure because of this condition, usually caused by rheumatic fever.

They discovered that they could go in, put a finger into the heart auricle, the low pressure chamber of the heart, and crack that stenosis with one's finger. So it was not an open heart surgery, but it was effectively the first opening of a valve. And

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there was a big backlog of those patients. I did those for a while. It was enough to keep me busy, and in surgery. At the same time I could limit by load; I wasn't taking general surgery patients.

So I combined those and similar special cases through most of my administrative time, in the sixties, and seventies.

Chall

Nearly ten years.

Cutting

Gradually, as we caught up with the backlog, my value there was diminishing, and other began to take over and to teach the new residents as they came through, how to do them. So they were gradually taking it on.

Chall

Some of them may have been seeing that development while they were in medical school, too.

Cutting

Sure, by that time it was being done in medical school. The residents in surgery getting their residency training elsewhere had pretty good exposure. We let them do a few under management here, then they could go on their own.

Chall

When you say, "We had a backlog, here," what happened to the patients suffering from some of those ailments that you couldn't take care of until somebody learned how, mainly you at one point? Wouldn't you transfer them, let's say, to other hospitals where this was already being practiced?

Cutting

Anything that we couldn't do, we transferred, but it was economically important, I think, to us that we should do them. It would be two or three hundred mitral stenosis, costing five, six thousand dollars apiece. That was pretty heavy money for us in those days. They were backlogged all over the country, not just our members. It was really just the first year or two that those things were being done; we picked them up.

Chall

That's always been something that you were concerned about, not being too far ahead, but could pick it up as it seemed essential.

Cutting

Yes. The medical schools had a backlog, too, with their patients, and every doctor did. I don't think we deprived our members. It was the level of knowledge of medical technique.

Chall

The other part of your life has been spent in administration. Where did you have an office, and how much time was spent?

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Cutting

First regional office was behind Oakland Tech High School. Twenty-second Street, just off Broadway in Oakland.

Chall

How much time did you spend there?

Cutting

Probably about half-time.

Chall

A few days a week, or some time every day?

Cutting

Probably a few days each week. I would have surgery in the morning, and see a few patients in the afternoon, then go over there to see what was going on at that office. It was just a couple of blocks from the hospital.

Chall

What in general was your duty? I get confused now as to health plan managers, medical directors, and regional managers. I wondered how to separate functions here.

Cutting

We continued to have the executive committee, of course, which we felt was the management body of the medical group. I worked for them. I represented them, meeting with the regional manager of the hospital and health plan. He had his offices there, in the same building. First problems were forecasting health plan membership. So we'd sit down with the health plan manager, Mr. Babbitt, that particular year. The regional manager was Fred Tennant.

So we'd sit down and look at the forecast of membership. We would try to itemize our budget requirements for the next year, developing forecasted requirements for health plan dues, and established the dues structure for the following year. We'd make rounds of the facilities to look at their equipment requests. We'd done this before, you know, while Dr. Garfield was manager. I used to go around with him, look at the autoclave in Richmond. If they wanted a new autoclave, he'd go and kick it and see whether they could have a new one, or whether they'd have to have that one mended.

So it was a continuation, sort of, of developing the equipment budget. Everything was based, of course, on the membership forecast, to set up a financial requirement for the dues. The health plan membership forecast established then the dues structure.

The internal medical group problems could pretty well be handled by the executive committee. It was made up of the physicians-in-chief of each of the units, and an elected member. Differences

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of numbers of nurses, full time equivalent personnel could be argued in the committee. We let them do that. When one unit wanted a medical residence/intern program, and another one didn't, it caused some differences of opinion, and that could be hashed out by the committee.

The income, the capitation negotiations, were pretty much my responsibility. I informed them of what the monies were going to be, but I could not be in a position of running back and forth. They telling me, "Oh, you want to get some more money," and they "won't accept this." I didn't let them do that.

Chall

You were in charge.

Cutting

I would be in charge, yes. We told them what the membership forecast was going to be, what the expenses that they each had asked for, what we had to cut down to meet a reasonable dues structure, so that we had agreed with the health plan to have a dues increase of 8 1/2 percent. That meant that the contract monies for the medical group would be an increase of 7 percent that year. So they had to take that.

They could then spend that money pretty much as they wanted to. We allocated a contractual income increment to each of the medical groups, and they would come up with how to spend their percentages, their portion of that increment. Each physician-in-chief of a medical center had his department heads, and they would come up with the increase in income for the individual physicians. I would go over each of that allocation of funds with each physician-in-chief to get approval, and then they would take it to the executive committee for final approval.

I worked with each individual physician-in-chief on his problems. They were all new, actually my appointees, so we had to develop a relationship. Their problems became my problems. We could usually settle it, except for those overall across medical group problems which had to be sifted out by the committee.

Chall

Now, as there were other hospitals built in San Rafael, and Martinez, and all these other places, did they send representatives to your executive committee?

Cutting

When they got a medical group of twenty-five partners. Then the head physician there was designated as physician-in-chief, and he then became a member of the executive committee. Before then, they were called physicians-in-charge of the smaller units. Napa, for instance, didn't have, still doesn't have, twenty-five physicians. Vallejo has twenty-five and more physicians, so Vallejo has a physician-in-chief, and Napa has a physician-in-charge.

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Then each center had an elected representative. This was developed too, during the years as part of medical group management. The elected member was a popularly elected member, came in as an agitator, as a do-gooder, you know. In a couple years on the executive committee, he would calm down, and so they'd want somebody else for the next couple of years.

A physician-in-chief stayed on as long as he was physician-in-chief.

Chall

And you had terms for the physicians-in-chief, you said, five years, or something like that?

Cutting

I think they were nine years when I was there, they are now five years.

Chall

That gives continuity to the program, doesn't it. I think we're about out of tape, and I don't want to get into anything major, in the few seconds left.

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VI The Kaiser Permanente Medical Care Program Finally Becomes a Partnership, 1962

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The Effects of the San Diego Crisis, 1961-1962

Chall

I thought today we'd just get started with the problems that developed leading up to San Diego. We finished just last week with the solution, the so-called Tahoe Plan, or the Tahoe Solution.

But from reading Dr. Smillie's report, and others, it would seem that that didn't solve it all, particularly in northern California.

He claims that in 1957, Fred Tennant was appointed the regional manager, and Arthur Reinhart was appointed health plan manager, and that both appointments had been made without prior consultation with the Permanente Medical Group. That, I assume, created some tensions. Then, he writes, that Felix Day, who had continued on as regional administrator of the hospital, had appointed a hospital administrator who was unwelcome to the physician-in-chief at one of the medical centers.Smillie, "A History of the Permanente Medical Care Program," 99.

So we have apparently tensions of various kinds coming up. One, that the regional manager and the health plan manager had been appointed without any consultation with the medical group. Secondly, that a hospital administrator had been appointed who was unwelcome to the physician-in-chief. Can you fill in the name of the hospital administrator who had been appointed, and in what hospital? Would that have been San Francisco?

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Cutting

Yes, I think he's referring to the San Francisco Hospital. Verne Brammer was the hospital administrator that was moved from Vallejo to San Francisco.

Chall

By Mr. Day at that time?

Cutting

By Mr. Day.

Chall

And he was appointed without--I guess it was Dr. Collen, then, who didn't approve of him?

Cutting

Yes. To be more general, one can say that, although the contractual arrangement that was worked out at Tahoe, and subsequently, through 1956, 1960, and so on, proved very satisfactory, no matter how carefully and astutely the piece of paper can be worked out, it needs people who want to make the project work. There was considerable feeling lagging from the prior five, six years, of suspicion, paranoia on both sides--medical group and the hospital side.

There is no question but what the hospital administrators got most of their acclamation by how well they could keep the doctors under control. A typical example, I think, I often use, was over in San Francisco. I think we stated that the ancillary services were employees of the medical group. In San Francisco, in the clinical laboratory then, the employees would be employees of the medical group.

The laboratory was in the hospital confines, there. The waiting room across the hall needed to be painted. Was that hospital, or was that laboratory? The hospital administrator and the medical physician-in-chief could not agree on the color of paint to paint the waiting room. Things of that sort, literally, were flamed into terrible problems. It came all the way up to the highest decision makers, and so on, to be squelched.

Chall

How high?

Cutting

To me, and to, I'm sure--

Chall

Dr. Keene?

Cutting

Dr. Keene.

Chall

It would have gone that high up?

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Cutting

He probably heard about it. So it was in that atmosphere, really, that someone, and I'm not sure who, saw an advertisement in the Wall Street Journal for a hospital in San Diego that was in bankruptcy sale. It seemed to us that there might be a chance to develop a little program where the physicians had more control of it than we did here.

It was never our intention to destroy or injure the program in northern California, but we thought that a little experiment working with the predominant management--decisions by the physicians--would be interesting, and might be helpful in understanding the whole program.

So we purchased that hospital, and Dr. Collen was to be the medical director, head administrator, of the hospital there. But, as Dr. Smillie reports in his notes, Mr. Kaiser, Sr. became so adamant that this was a conflict of interest, that he said he would actually destroy the whole program if we went ahead with it.

Chall

Let me ask you a few questions about that, going back to these decisions to put people in, major decision, without consulting you. Were those bad decisions? Had you been consulted, would you have probably agreed to them, and then been able to work with those persons? Or, would you not have appointed them?

Cutting

It's hard to say. In general, I think probably if we had agreed on those same people, we could have worked together and probably gotten along all right. But there was an ingrained animosity, or suspicion, of physicians; an envy of physicians, worry of their role of taking over, by the hospital administrator side.

Chall

So that it was just poor judgment administratively to do it that way?

Cutting

I think so.

Chall

Felix Day had been with the program for many years. I understand that he had a reputation for really checking on doctors and hospitals, even to the point of opening traps in sinks to see if there were any needles that went down in them, to make sure that costs were being held down. I know he stayed on for many, many more years. I wondered whether this was another facet of opposition among the doctors in terms of controlling their use of time and the use of equipment.

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Cutting

I don't remember any specific instances of that sort. Felix, though not an academically trained hospital administrator, was a good administrator. I think he had a little problem working with some doctors, and understandably so. Some doctors are pretty contentious, and difficult to work with. So it often was a two-way street, I'm sure.

Felix was very enthusiastic, and a very likeable fellow. We put him in charge of the Ohio region as the hospital administrator. And he worked there very well.

Chall

About San Diego I have some other questions. From 1957, when these persons were appointed whom you were opposed to for one reason or another, until 1961, when you began to look into San Diego--that's anywhere from three to four years--had you been trying to work these problems out, and had they been festering so long that you just sought quickly this opportunity?

Cutting

Yes, we had been trying what was essentially a management committee, made up of the health plan manager, the hospital administrator, and someone from the financing side, and three doctors. So there were six of us. We spent hours and hours very uncomfortably trying to work out something. I think the most important decision we ever made, probably, was who could use the electric typewriters, and who couldn't.

Someone, I think Felix Day again, bought a carload, it seemed like, of manual typewriters at a very good price just about the time the electric typewriters came along. Of course, all the secretaries wanted electric typewriters. So we had to establish the criteria for the pecking order of who would get an electric typewriter. And that's the kind of thing that we spent hours on.

Chall

I also was interested in knowing, when you were under this kind of tension, and then finding the opportunity for the hospital, whether or not, because you were old friends and you had been a part of this growing up period, whether you consulted with Dr. Garfield. He hadn't been appointed to the board yet, but he had a position still. You might have wanted to talk to him about this. I wondered whether you had, in fact, and what he felt.

Cutting

Oh, I'm sure we talked it over with him at long length. As I remember it, he was fairly non-committal. He thought it was probably a good idea. He was always strongly in favor of a strong physician role in the management program. So I'm sure that he concurred in the idea. As it developed, of course, we offered the Kaiser people to come in with us in San Diego, but not as prime, not in charge.

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We were going to be in charge, we wanted their expert help, we felt they were experts.

Chall

I note from Dr. Smillie's draft that it took two votes to get the necessary majority vote to go to San Diego. One was a vote of the partnership at a meeting which was not quite sufficient. So then you went to a mail ballot shortly thereafter. Did you have to do any lobbying at all to get the necessary votes? Do you recall that?

Cutting

I remember that in the lobbying, we tried to meet with the various groups of physicians. Now, by this time, there were units in San Francisco, and Oakland, and Walnut Creek, and then South San Francisco, Vallejo-- We made tours, anyway, and I'm sure that during those tours, the question may have come up.

Chall

Had there been any contact between you and Dr. Kay as to their expectations, in southern California, of what you were going to do?

Cutting

We called Dr. Kay before we did anything about it, and asked him if they had any intention of going down to San Diego. If not, did they have any problem if we did, and the answer was no. Subsequent to that, he has been a little less definite in his no, I think. But basically, we felt that we had perfect clearance, as far as the southern California group was concerned, to go ahead.

Chall

Then, were you surprised when Kay and Edgar Kaiser went to Hawaii to see Henry Kaiser about this, and then by Henry's subsequent stand on your project?

Cutting

I didn't remember, until I read Dr. Smillie's note, here, that Dr. Kay had gone to Hawaii.Smillie, "History: Chronology," 6. I know that Mr. Kaiser came back from Hawaii, here. I remember very clearly the meeting in his office with Edgar Kaiser and Gene Trefethen, and Mr. Kaiser, at which time he was very irate. he said he would certainly consider it a conflict of interest, and he would destroy the whole program. "Do you really mean that, Mr. Kaiser?" He said, "Yes, I do." I said, "In that case, we won't go." He said, "Can you make that decision?" And I said, "Yes, I think I can."

Chall

That probably took you by surprise. Or had you contemplated that this might be part of the scenario?

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Cutting

I had heard that he was upset. I think there was an exchange of letters, memoranda that indicated he had felt that it was a conflict of interest. And in fact, I'm not sure but what there was a legal opinion of what conflict of interest really meant, and so on. Kind of vague, in legalese. I was surprised at his adamancy. I think Edgar and Gene Trefethen were, too. They stood looking out the window, rather embarrassed, while Mr. Kaiser and I were talking.

Chall

What made you think that you could turn your medical group around after having spent some little effort getting them moved towards the project itself?

Cutting

I felt I had that much respect and clout with my medical group at that time.

Chall

And was it difficult?

Cutting

No.

Chall

I get the feeling that there was a difference between the approaches of Henry and Edgar Kaiser to problems of this kind. Edgar Kaiser, for example, was willing to allow the northern California medical group to proceed, and perhaps Trefethen, to see how it would develop.Smillie, "A History of the Permanente Medical Care Group," 105-107. But Henry Kaiser immediately was totally upset by it, and there was no negotiating. In this case, and in other cases, were there differences in their styles?

Cutting

Oh, yes. All three were different. Mr. Kaiser was adamant, abrupt, made up his mind and pounded it out on the table. Mr. Trefethen was more business-like, but obviously had to carry out the position of Mr. Kaiser. Edgar was the kind, softer, more gentlemanly--trying to make peace.

Chall

Was he a moderating--

Cutting

Moderating. As much as you could moderate with Mr. Kaiser. [laughs] I'm sure he had an effect on Mr. Kaiser. But he was definitely a moderator.

Chall

As long as Henry Kaiser was on scene, then, he was in charge.

Cutting

No question about it.

Chall

And after that, would there have been difficulty between Edgar and Mr. Trefethen on things of this kind?

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Cutting

No, I don't think so. Mr. Trefethen kept in the Central Office running the business. Edgar took to the skies; he traveled, getting business contacts around the world. He did an awful lot of traveling those years after that. Public relations, and developing business.

Chall

For the business. So that their impingement on the medical program, by this time if it were running smoothly, was less and less?

Cutting

Yes, almost nil.

Chall

Dr. Garfield, in his interview, his oral history, has said of this whole project with San Diego, "This caused the layman to realize the need of some kind of joint venture."Garfield interview, tape 5, side 1, 10 September 1974, 5-6. I wondered whether there was a quid pro quo regarding reorganization of the management team when you backed down? It did take place, although it took place a couple of years later. Did it just happen to come about?

Cutting

I think it had a profound effect. Mr. Kaiser was by no means stupid; he got the message that we weren't happy, that something ought to be done. And I'm sure he told Gene and Edgar to get busy and straighten things out. What they did was to bring Karl Steil up from southern California.

Chall

That was a year and a half later, so something must have been going on to prepare the group for that, or prepare the management for that. In my dates I have September, 1961, as being the date when the San Diego plan went down, after disapproval of Mr. Kaiser. Then it wasn't until December of 1962 that Karl Steil came in to replace Mr. Tennant. So that was, I figure, something more than a year. Were you being consulted about this? I mean your medical group during that time.

Cutting

According to Smillie's notes, we sold the hospital in May of '62.

Chall

Yes, that is a different date. I'm glad you pointed that out.Smillie, "History: Chronology," 6. See also "A History of the Permanente Medical Care Group," 106-107. Thank you.

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Cutting

It didn't seem to me it was very long.

Chall

Now, in the appointment of Karl Steil, were you consulted at that time? Was that appointment made with your acceptance?

Cutting

I don't remember being consulted about Mr. Steil either.

Chall

[laughs] Isn't that interesting.

Cutting

I may have been told about it. It may well have been that Dr. Garfield, knowing Mr. Steil, could have told me, "Look, here's the fellow that's been through the fire with Ray Kay. He is a fellow that knows how to work with the medical group." I think maybe he gave me a good introduction.

Chall

Eased the way. Now, Mr. Steil brought up Martin Drobac to be his assistant here. Did he work out well with you?

Cutting

Martin wasn't particularly effective. He wasn't around too long, I don't think. I think he was not particularly happy with the health plan job; he had his sights set a little higher. And I think he moved up, or out, pretty much of his own volition, pretty soon.

The Team Approach Begins to Work: Karl Steil, Frank Jones, Felix Day

Chall

All right, now you've got this team, a staff you were satisfied with. This was Karl Steil, Frank Jones, and Felix Day. Can you give me some idea of how you worked things out with them? What was your team approach that worked with them that hadn't with the preceding team?

Cutting

Mr. Steil immediately tried to create an atmosphere of openness, of willingness to work. No deals under the table, and this sort thing; everything was on top of the table. He included me in discussions with health plan, as to their forecast of new members, and so on. He put me as head of the Permanente Services Organization, which was really a group of the heads of the departments that worked for him and for us--for the medical group.

He managed to present a feeling of honesty and forthrightness. We argued, sure, but we felt we were arguing from the same figures, the same book, and our books were open to him, and his books, the

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hospital books, were open to us. There was just no suspicion and feeling that he was trying to pull something over on us. I reacted to that very quickly, because that's the way I like to work.

Chall

Did you think that he respected the professionalism of the doctors more perhaps than the others?

Cutting

No question about it. He respected their training, what they were trying to do with their life, and what they meant to the organization. He realized that the program was nothing without the physicians, was nothing without taking care of the health of the people. His role was to help the process of health care.

Chall

What about Mr. Jones? How did he work with you?

##

Cutting

He came up as an ambulance driver in the Richmond Field Hospital, so we'd known him the whole time. He was very friendly, everybody loved him. He started out without much experience in the health plan, but he picked it up. His relationship with the unions, with the members, the public, was excellent. He, too, was open and honest, and they seemed to respond to him.

The Eden Medical Group

Chall

There was also, during the time, and you did discuss it once before with me, the San Leandro project, Eden, it was called. That went on from '53-'62--shortly before, I suppose, Mr. Steil came in. It was brought right into the medical plan. Dr. Smillie in writing about the Eden group says that the physicians at the Eden Medical Group had been compensated on base salary, plus incentive payment for each patient visit. Hence, he says, "They brought to the Hayward medical center a style of practice which resulted in greater physician productivity at that location than at most other Permanente locations."Smillie, "A History of the Permanente Medical Care Group," 109.

They operated under a sub-contract of the Permanente Medical Group, not a direct contract with the Kaiser Foundation Health Plan. Was that another type of experiment? Did you then decide that it would be better if they were brought into the one health plan organization?

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Cutting

Yes. Dr. John Mott, a wonderful gentleman, very fine man, finished his residency in surgery with us. John was a pioneer in spirit. He was a little restless within the confines of the partnership of Oakland which seemed to be a little bit too bureaucratic. He, and David de Kruif, and George Ekhart, and a pediatrician lady, Edna Schrick--she later went to Hawaii--decided to start a little clinic in San Leandro.

John and I were very good friends. It was really my arrangement with him that allowed him to do it. And we did give him a base salary, plus so much per office visit; I've forgotten how much it was now. There's no question but what they made it work. John was a terrific worker, kept the clinic open day and night, satisfied the patients; did beautifully for almost ten years.

There's no question but what they were productive and enthusiastic. But eventually, they needed a little bit more money on the per visit basis. It hurt me to tell John, but we sat down, and I said, "Look, I can't do this, because this is just getting into a fee-for-service, getting one step away from prepayment. As long as you can keep it at one prepayment level, fine, piecemeal, on a per service, per visit, basis but I just can't start increasing it. Why don't you come on back into the partnership." So he took a big breath, and he said, okay, he would.

Chall

But then did they stay out in the Hayward area?

Cutting

They stayed in the Hayward area.

Chall

That allowed them a little more freedom.

Cutting

Yes. Built them a nice hospital and clinic. I can probably get that date for you. [checking the Directory of Physicians, The Permanente Medical Group, 1969] Let's see if this goes back far enough. No. His residency with us, '48-'50. I believe '53 is right for Dr. Mott's clinic. The new clinic and hospital started in 1962.

Chall

Where did Dr. Mott go? Did he stay in Hayward?

Cutting

He stayed in Hayward until Sacramento opened. And he, as a pioneering spirit, was the only guy that was willing to go to Sacramento. He burnt his life out making Sacramento a success.

Chall

A question that I find here for you [on Chall's outline]--at about this juncture it seems appropriate: Dr. Saward has the impression that the northern California Permanente Medical Group was mainly

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interested in creating optimal conditions for physicians, whereas the Oregon group was mainly interested in creating optimal conditions for its members. Do you want to comment on that?See interview with Ernest Saward, M.D., The History of the Kaiser Permanente Medical Care Program, an oral history conducted 1985, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 1986.

Cutting

[chuckles]

Chall

[laughs] Besides just chuckling.

Cutting

Not particularly. [laughter] I think it is very admirable that each area has something that they can feel is a little better than anybody else.

Chall

You don't claim that that's accurate?

Cutting

I don't think it is accurate. I think we are as aware of our members as anywhere or anyone else.

Minorities and the Medical Staff

Chall

During these first years, before and after 1962, which we're talking about now, during all that time of developing one clinic and hospital after another, what was the practice, in terms of hiring medical staff, with respect to blacks and Orientals?

Cutting

1962?

Chall

Up to, and then following the time when you were able to work harmoniously with Steil and Jones and the others.

Cutting

I think we talked about the postwar era, of the McCarthy kind of spirit, worrying about liberal thinking. I think the prejudice toward the blacks was involved in the same thing, or at the same time. It seemed to be part of it.

Chall

What do you mean?

Cutting

We had one resident in Ob-Gyn, I think, a black man, that we took on, and we were criticized for doing that by Mr. Kaiser.

Chall

Henry?

Cutting

I believe so. To the point that we had considerable difficulty with keeping him for his contractual year, then letting him go.

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Chall

Then you let him go? Why was Mr. Kaiser opposed?

Cutting

He would have to tell you that.

Chall

I see. [laughs] Well, now you really--you aren't being fair. Were other people opposed, on the medical staff?

Cutting

As far as I remember, none on the medical staff objected.

Chall

Did it cause tensions in the medical staff that this would happen?

Cutting

At that time there probably were relatively few well trained black physicians. The concept of Howard University as the source of training for most blacks was not comparable to some of the better schools. I know that has improved, and it's no longer a problem. We have many blacks now. Females? Well, same thing. Gradually they earned their way into full acceptance.

Chall

And Orientals?

Cutting

And Orientals, same. There was a period when we had a lot of foreign graduates in our intern/resident program. Lots of Indians, who were a problem, because they didn't have English. You couldn't read their writing, and you could hardly understand their speech, so that it made relationships with the patients difficult. But many of them we still have with us.

I think all that is well under the bridge by now. It certainly was a gradual awareness and learning, understanding.

Expansion to Cleveland, Ohio, 1969

Chall

Now, let's go to Cleveland. As I understand it, this was started-- I don't want to get my dates wrong--1964. It began under Dr. Saward's sponsorship, when the meat packer's union came to him.

Cutting

Yes. Dr. Saward and Avram Yedidia.

Chall

Right. And they set up a plan that didn't succeed at first. Dr. Garfield has said that, in setting it up, you departed from the genetic code, one of the principles which guided and made Kaiser Permanente successful. It was not followed in Cleveland or Denver--having integrated facilities.Garfield interview, tape 4, side 1, 9 September 1974, 10-11. I guess it wasn't until

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you did develop integrated facilities, that is really finding a place to build a hospital in the right place, that it was successful in Cleveland.

However, during a period of several years, Dr. Saward and Mr. Yedidia had a group there called the Community Health Foundation. You were asked to take it over. And I understand that you went to Cleveland and looked it over and thought that it would be a good move, and came back and reported this to the Kaiser Permanente Committee.

Cutting

I think Mr. Steil and I went together. We felt that since it had been developed by our own people in much the fashion of our program, although it didn't conform entirely, it was a shame to let it go down the drain. So that we thought it was probably worth salvaging, and to give it a try.

Chall

And you did have some money available, I guess, from the Kaiser Family Foundation for extensions outward.

Cutting

Loan and gifts.

Chall

In terms of its being under the sponsorship--the administration in a sense--of the northern California region, what exactly was your responsibility there?

Cutting

Reviewing the physicians, deciding whether Dr. [Sam] Packer was the doctor that should head the program, or not. He was the senior physician there. We went back several times, talked to the staff, talked to each of the members of the staff individually about each other, and so on. My role was really to make the decision that Dr. Packer, I felt, was the one to be the physician in charge. Mr. Steil looked at the clinic books and the accounting, business side of it, and made some suggestions.

We were driving out to the airport one time, and passed all these big industrial plants--tremendous area, lots of workers out there on the west side of Cleveland. There was a little convalescent hospital that was for sale, so I said, "Why don't we pick that up?" That's how we happened to get started on the hospital on the west side.

Cleveland is a peculiar city in that it's divided by a river-- that catches fire once in a while, because there's so much oil in it--between east and west. Those that live on the east never go to the west, and vice versa. So it was a difficult city to really try and put together.

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Chall

Most of your work was on the west side, then, if you built your hospital eventually there.

Cutting

Yes, and we have one on the east side also.

Chall

What's the relationship now between the Cleveland medical group and the whole Kaiser program? Are they still under your aegis in northern California?

Cutting

No. They're an autonomous region, just as southern California is, Denver, and Hawaii. They are members of the Kaiser Permanente Committee, and it's the same. Maybe the constituents are a little different as to the board of directors of the hospital/health plan there, as it is here, and some others. But it's essentially the same. It's a self standing region.

The Kaiser Permanente Committee, 1967

Chall

During that period the Kaiser Permanente Committee became a functioning committee. You've been looking at it, naturally, for all those years. Can you give me a little background on the way it functions, and how you feel it works in terms of its general team approach, and the understanding of its members toward their function?

Cutting

It originated really because of the disparity of response to visitors. Visitors would come to this building [Ordway Building]. Dr. Keene would talk to them, and they'd get one story. Some of them would end up in 1924 Broadway, and we'd see them, and they'd get a different story.

Chall

About how the program worked? They were interested in the health plan?

Cutting

Not opposite stories, but different slants to what is important, and so on. They were wondering if they could start something, and they got different kinds of advice. Our popularity, reputation, was growing, so that we got a tremendous number of visitors. Just really quite overwhelming. And we felt that there ought to be some kind of a consensus, some kind of a common way of handling the problem.

This evolved into, "Well, maybe we ought to sit down together and talk about what we are and how we should respond." And that was really the way the Kaiser Permanente Committee started. It

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started as the regional managers, and the medical directors, from each of the then regions, and four, I think, from the Central Office. Dr. Keene, Bob Erickson--you've got that somewhere.

Chall

Probably. If we don't have it we'll get it.

Cutting

About an equal number of us and the Central Office people. It was intended not to be a management tool. We weren't making decisions for anybody, but we would get a consensus of ideas, and exchange ideas. One of the earliest decisions that we did make was to go to Ohio. We arrived at that by a big blackboard; I think this was down at Pebble Beach, where we were taking consensus. We had a list of possible decisions: yes, we'll go; no, we won't go; maybe, yes; maybe, no. [chuckles]

Chall

All the possibilities.

Cutting

All the possibilities, and then we checked them off. Finally decided to go. That's when Ray Kay said, "If northern California goes to Ohio, then we want to go to Denver." There had been a little talk about somebody wanting to start something in Denver. So we--

Chall

Shared.

Cutting

[laughs]

Chall

I see. That's interesting how it came about. The health plan had been struggling with committees for many, many years, and to some degree to no avail, but this one really was a committee which knew what its purpose was, and there was no animosity or suspicion among people from the start.

Cutting

It knew what its limitations were, that it was to associate with each other, to get acquainted, to surface common problems, and to get a consensus where possible. But not to try to manage any one region's business. And it's been very, very helpful. Probably the most significant development, or has been, to hold, to congeal, to maintain, the partnership idea between the industry and the medical group.

Chall

That's fine.

Cutting

They alternate being chairman or president, whatever they call them, between a doctor one year, and a non-doctor the next.

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The Growth of the Central Office

Chall

That brings us into the growth of the Central Office. That has also come about gradually, hasn't it? As the Central Office was growing, how did you relate, as medical director, to the Central Office? In what ways, beyond your own team there of Steil, and Day, and Jones--did you reach out?

Cutting

We had very little relationship with Central Office. What there was was rather ineffective. Usually it was that I would call up and say, "Why in the world are you adding any more people there? Look at your budget, it's bigger than ours is."

Chall

And whom would you call and complain to about that?

Cutting

I'm sure I called everybody. [laughs] With no effect.

Chall

As it grew were you in fact upset with the growth? Did you see it not of any value?

Cutting

As it was growing, we felt that it was growing beyond its need, beyond its function. But admittedly, that was a limited viewpoint. We were in the trenches, and the ivory tower is always criticizable.

Chall

How have you felt about it in the last few years? You've changed your opinions?

Cutting

Moderated it somewhat. [chuckles]

Chall

Where do you feel that it serves its purpose? A purpose?

Cutting

It servers an important service in legislative functions. That is, monitoring and influencing legislation, both state and federal, which affects probably all the regions. It is certainly effective, in financial dealings with the insurance companies, and banks, in borrowing money.

I think it's less essential in the personnel side, less essential in some of the legal side except for the legislative. But I wouldn't want to be quoted as to criticizing. You see, I've been out of it for eight years.

Chall

So, as you looked at it eight years ago, you felt this way, I assume.

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Cutting

The other side of the fence always seems to be spending more money than it should.

Chall

I'm just interested in your perceptions. [laughter] Somebody else will talk to Dr. Keene about his perceptions.See interview with Clifford Keene, M.D., The History of the Kaiser Permanente Medical Care Program, an oral history conducted 1985, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 1986.

Research: Basic and Applied ##

Chall

One of its responsibilities has been research; over a time, I think it assumed that responsibility. I don't know who was responsible for the research prior to that. However, research goes back a long way.

Cutting

Yes. A certain amount of the dues is allocated to research. It needn't be a Central Office function; it actually isn't. It is allocated to the regions, though there is a certain fund that the president likes to have to use for whatever he wants to spend it for, toward research, or public relations, or what not.

Chall

How do the regions handle it? Is it handled by the regional manager, or is it divided with the medical group in some way?

Cutting

It's handled through the hospitals. It must be handled through a non-profit organization, so it is a function of the Kaiser Foundation Hospitals. As such, the board of directors, I suppose, it being a Central Office function, is responsible for it. But it is the regional hospital that develops the protocols, reviews the protocol for research, then makes the applications to the government for outside grants, and coordinates inside monies and outside grants, and so on, for priorities of research.

Chall

I was interested in noting, when I went through some of the papers in the Kaiser collection in The Bancroft Library, that Dr. Garfield was asking for research monies as long ago as 1943. He asked the Permanente Foundation for monies to do some research on new methods for the cure of syphilis, for the publication of a medical journal, for care of the sick and destitute coming in ill before they got their jobs, and more. This all had to do with the health plan, plus, research. He asked for funds to cover it and did get close to $50,000.E.E. Trefethen, Jr. to Sidney R. Garfield, M.D., 1 November 1943, Henry J. Kaiser Papers, Series 2, Carton 22, The Bancroft Library, University of California, Berkeley, (hereafter cited as TBL). See Appendix, 108.

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There was a lot of memoranda and letter writing because there wasn't assurance that this was legal, so that the attorneys were in on it, as well as Trefethen, and Garfield; it was a big problem. However, he wanted also a preliminary study and analysis of a program for rehabilitation of disabled physicians discharged from the armed services.

The first edition of the publication of the Permanente Foundation Medical Bulletin came out in July, 1943, with a report on appendicitis. This was sort of in-house research, in a way, as to what you were all doing.

Cutting

The first one was, I guess in '43, probably. We had an excellent bulletin going there for a number of years. They're all in the library. Dr. Collen was the editor of that. We all contributed articles to it. Yes, that would be research.

Chall

Of a kind.

Cutting

Eleemosynary or whatever you want to call it. [chuckles] Not, I guess.

Chall

Not exactly.

Cutting

Not exactly research. Charitable? I guess research.

Chall

Now, your material was sort of in-house, I think--what you were doing, like the report on appendectomies, major and minor surgeries, and whatever else there might have been of interest to the physicians. In 1945, I see that Clifford Kuh reported on the value of the periodic health exam, which is always something that you were concerned about.

Cutting

That was before there was a Central Office, as it were, that was the foundation, which was part of the hospital.

Chall

There were also, in your various annuals, reports and articles on research.

Cutting

I've been intending someday to write a report on our research, because I think we've done a lot of excellent research.

Chall

Yes. The Kaiser Foundation Research Institute, was that founded in 1958?Kaiser Foundation Medical Care Program, 1960, p. 7, lists various research projects and where they are located.

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Cutting

In Richmond?

Chall

I'm not sure, I don't know about that. I took this from the annual reports of 1960 and 1961. Weren't you an advisor for the Kaiser Foundation Research Institute? I find a clue in there somewhere.

Cutting

I was a medical director of it, or advisor, after I retired--1976, '77, and '78. The research institute was established, yes, as far back as--you said 1958?

Chall

Yes.

Cutting

I think that's probably about right. The formal research institute started in Richmond, as a facility for basic research. They were studying DNA--nematodes, and all kinds of non-clinical, basic subjects. That was disbanded after ten years, I guess.

Chall

The research institute?

Cutting

No, that basic research was discontinued. The title of research institute remains today, of course. They're meeting next door, that's the Institutional Review Board for the research.

Chall

But that is handled now through the Central Office?

Cutting

That's regional.

Chall

Oh, I see, so your own regional group is meeting?

Cutting

Yes.

Chall

Dr. Collen did a lot of research, too, with respect to medical methods, and the multiphasic testing, and all of that sort of thing. Was that done under the auspices of the research institute? Well, actually, it's not basic research in the same sense that the other was.

Cutting

Not basic research. That was applied research, you might call it. I might carry on the story of San Diego. Dr. Collen, as I said, was to be the medical director of San Diego. When that fell through, instead of putting him back as medical director of San Francisco, we put Dr. Smillie in that, and we created Medical Methods Research.

It happened at that time, a number of things coincided. Computers were just beginning to come in. Automated technology; the automated chemical analyses, laboratory technology, and so on.

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We had been doing multiphasic examinations before. Dr. Collen had been primarily involved in that. Dr. Garfield had asked him to, because the longshoremen wanted him to.

So Dr. Collen had been doing that. But here it looked as if there was an opportunity to develop a really automated program, combining special procedure of a multiphasic program--going from one room to another, and doing it in a good procedural manner. Combining that with a lot of automated and computerized height and weight measures, and blood pressure, plus the laboratory program.

So that gave us a tremendous amount of experience, of source, of patients going through this multiphasic program. We had some that came in on their own, or didn't come in, and some that they asked to come in every year, as a comparative study. We got much of the money from outside grants for that, too.

So for ten, fifteen years, we have amassed just a tremendous resource of material that still is being used to go back to see what effect the pill had, what effect smoking had, and drinking, and all the questions that were on the questionnaire, and in the laboratory. We drew blood which is back in Washington now. They bought it. Every once in a while, somebody wants some sample of thousands and thousands of blood samples and serum. That is the Medical Methods Research, and Dr. Collen is still involved in that, and has amassed a very impressive history, and bibliography, and is world renowned for his work.

Chall

The study of the so-called Medical Care Delivery System, I guess that's been done by other doctors trying to establish the standards-- Dr. [Leonard] Rubin, and maybe others?--does that have any relationship to your own study on total health care?

Cutting

Not Dr. Rubin's. That is a quality assurance. There are two ways of looking at quality. One is to go through a chart like a cookbook and see what the doctors have done, and rap their knuckles if they haven't done so many blood tests, or taken so many EKGs for a heart patient or something.

Dr. Rubin's idea isn't a cookbook, but a process. You find an x-ray was taken in emergency; see what the emergency doctor read as no fracture. The next day the x-ray man says there may be a little crack in it. Did that report get to the doctor? Did the doctor get to the patient? Was the process completed? If not, then you can involve the nursing, the doctor, the whole procedure; so it's exciting, it's fun, and it's worthwhile.

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The other, the cookbook kind, every committee spends all of its time trying to agree on what should be done. They never can do that. So that's Rubin's. Total health care is different. Do you want to hear about that?

Publications and Public Relations

Chall

I do, but first I want to get through this business of the Central Office or general administration. The magazine, the little paper here, Planning for Health, comes out periodically. Volume II, number 5, I saw in one of the Kaiser cartons. It was dated January/February, 1957, so I assume it was probably begun in 1956. What was the motivation for this kind of publication, and is this a Central Office activity?-

Cutting

No, that's regional.

Chall

This is regional?

Cutting

Each region does its own. Wait a minute, they're beginning to come out--they look like Central, at that.

Chall

They all have the same basic articles, and then there's material within it that relates to the region, or sometimes it's just to the area, like Hayward has its own information about its own staff and facilities, similarly Oakland.

Cutting

It's regional. Planning for Health is northern California. Pulse, Portland calls it The Pulse, so it's regional. Health plan puts them out. It was a way of communicating with the membership. As the membership began to grow and get large, somebody came up with the idea that we ought to do a better job of informing them as to new facilities, and new telephone numbers. Communication.

Chall

What about all these publications that one finds in various Kaiser clinics? They're also for members, are they regional?

Cutting

They are regional.

Chall

Who publishes those? I mean, within a region, and in what office, who makes decisions about those little pamphlets, the films, the recorded messages that you can get over the telephone? Where does all that come from? Who does it?

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Cutting

Nowadays they've got a public relations department in every hospital, plus a regional central public relations, in 1924 Broadway.

Chall

Must have a good size staff there, too.

Cutting

Yes, they have. And they print out all kinds of things. There are other publications.

Chall

I'm sure that these are just ones that somebody on the staff for this project has gathered up for our files.

Cutting

Here is a Portland one, called The Pulse. And there are in-house ones, ones directed not to members, but to staff, to hospital staff.

Chall

So that's a growth, of, you might call it a sort of regional Central Office.

Cutting

Sure. Oh, yes.

Chall

How do you look at that?

Cutting

I think it's getting pretty bureaucratic. But I'm an old timer. [laughs]

Chall

You have to go through too many layers in order to get something accomplished? What do you mean by bureaucratic?

Cutting

I mean bureaus, too many separate organizations, which beget bigger organizations. The public relations used to be somebody in the health plan office that would take problems that arose from the public, and patients, and so on. And it's grown to having editors, and assistant editors, and probably fifty people in there.

In each hospital, now, there's a public relations person. And maybe they do good; we've grown, we're awful big. But the larger we get, the larger any institution gets, the more it tends to grow, and the harder it is to change course. It tends to grow in the same direction, rather than to conserve, or to change and contract.

Cost Effectiveness and Cost-Benefit Standards

Chall

In terms of how things work, the issue of cost effectiveness has always been a concern of the health plan. It is, of course, of tremendous concern, nationally, now. Dr. Garfield, according to

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Dr. Neighbor's oral history, had what Dr. Neighbor termed "Garfield's theory of the economy of shortages."Neighbor interview, tape 5, side 2, 12-13. He gives a couple of examples. I'll see if I can recall one.

He says that Dr. Garfield was concerned with the number of patients that doctors saw. That if the schedule was such that the doctors were kept very, very busy, that they would tend to work better and harder, and get more accomplished--it's a more efficient operation. I had been also told that Dr. Garfield found at one time, this was early, that blankets were being stolen. So he instituted some such thing as one blanket per bed, so that nobody would be interested in stealing blankets because if they did, they would know that there would be no blankets for the next patient.

Of course, Mr. [Scott] Fleming and others write about the business of the pencils.Scott Fleming, "Evolution of the Kaiser Permanente Medical Care Program: Historical Overview" (Oakland: Kaiser Foundation Health Plan, Inc., 1983), 14. But I think it's more interesting to consider the theory of the economy of shortages from these other standpoints; also from the standpoint of how many hospital beds there would be per patient. Dr. Garfield was quite concerned about that. And then there's the story about Mr. Day checking the drains and the traps in the sinks. What's the theory of the economy of shortages as you knew it from Dr. Garfield, and as you saw it in practice?

Cutting

I never remember him checking the number of patients that a doctor sees.

Chall

Is that standardized?

Cutting

Yes, by the physician group. A half-hour for a new patient, fifteen minutes for a return, something of that sort; standard. And then you can make variations. A doctor can ask for twice that much or something, but there has to be some kind of a standard because people who make the appointments have to know roughly how much time to allow--you can't rush to a doctor each time you get a phone call and say, "How long do you want Mrs. Smith?" So you have to schedule.

Dr. Garfield was not looking over our shoulders as to how hard we were working that way. As early as Coulee, he was looking over our shoulders to see whether fellows were sitting out on the docks smoking while patients were waiting in the waiting room to be seen. He would give us hell for making patients wait.

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I don't remember the blanket deal. I do remember how proud he was when he got some whole set of stainless steel knives, and forks, and spoons during the wartime. You couldn't get that. I've forgotten, must have been fifty of each maybe. And within two weeks they were all gone. Every nurse, everybody, had furnished their own home. Sort of discouraging.

The economy of shortage, I would say, was in not building a hospital too much ahead of time; or office space before you get the members. Build your hospital as your best estimate, but conservative estimate, and then if you got more members, why, you'd have a couple of tough years before you could build again.

So we would run a little tight on office space, a little tight on beds, rather than building a hundred beds that we weren't going to use for another five years. So there was an economy of shortage if -you look at it that way, but--

Chall

Dr. Smillie has written that, during the 1960s, Garfield's cost consciousness continued. The executive committee, he writes, examined expenditures large and small. As an example of that, is the purchase of scintillation cameras for isotope scanning.Smillie, "A History of the Permanente Medical Care Group," 120. How does the medical group examine this kind of thing? Can it examine such expenditures, and to what extent?

Cutting

The medical group determines whether we get what we want. Then the dues structure determines how much of it we can get. For instance, if we want a new cat scan: we've got one in Oakland, but it's a couple of generations old, maybe; we'd like a new one. Doctors there would say, "It's really time we got a new one. Hayward got a new one, we want a new one."

The executive committee would vote--now the board of directors of the medical group--on the recommendation of the regional hospital administrator, Dr. [Walter] Caulfield. He will say, "I think it's time that we should get a new one for Oakland," and the executive committee will approve it. This all within the general constraints of the budget, which is set in July for the following year. So Caulfield knows about how much he can spend. Really the regional hospital administrator is a relatively new job, within twenty years. [Gerald C.] Stewart was the first one, and then Caulfield.

##

Cutting

The request might be for a microscope, or it might be buying electric beds, or curtains for the hospital, or something. But as far as medical equipment, and so on, that would be a doctor's request, which would have to conform with the budget.

---

Chall

So the budget is made up first, in terms of what? Is there something set aside for capital equipment, like a new cat scan, and things of this kind, money that's in reserve for such things?

Cutting

In establishing a dues structure, the first is the forecasted membership, which tells you how many members. Then you've got the members. Then you ask what is necessary. Are we going to open up a new hospital? Do we need six more million-dollar cat scanners, or something? And each hospital, each medical center, will develop a budget, a request, and it'll come up and be sifted through as to priority, and come up with a total amount of money.

Plus of course the wages and salaries that are forecasted. An increase of 5 percent, 6 percent, or something. The union people, therefore the others, will get it, the doctors will get it. So it's all lumped into an amount of money, and you look at that with the number of members. If the dues are way up here, you say, wait a minute, we can't hike our dues, we've got to cut down, so we go back to the budget.

Chall

Regular budget process in a large organization.

Cutting

It goes up and then down again.

The Doctors and Idealism in the Medical Care Program

Chall

I wanted to talk to you about the differences in the health plan let's say between the 1970s and the 1980s. I wonder if you have seen a falling away from the idealism as the plan has matured, and the membership is larger. Is the same spirit still among doctors, as there used to be because there's no consideration of money between them and the patients? The idealism de Kruif saw in the 1940s?

Cutting

Just what do you mean by that?

Chall

In the 1940s Dr. de Kruif saw a spirit, he called it the spirit of the Good Samaritan, that was there among the doctors because there was no consideration of money between them and the patients. And that, of course, is part of your philosophy. I was wondering if you still--as the plan is larger and doctors are coming into HMOs because that's the way to go--find the same spirit, as you knew it, among doctors who are coming in?

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Cutting

Oh, I think it's still there. Yes. It may not be quite as apparent as it was in a smaller group of fifteen or twenty doctors, pioneers. As you get larger, it does attenuate to a certain extent. I don't think the Good Samaritan concept is particularly apt.

Chall

May not have been then, either.

Cutting

Yes. The comfort, the satisfaction, of being able to provide care without worrying about the patient having to pay for each of the services that you give, and on your side, not having to tally up and count everything that you give; the ease and freedom to provide what you want to provide is there, very much. That's why the doctors join us, with that freedom of practice.

I think the realization that appropriate care is what we want--we don't want inexpensive care, we want appropriate care. That's the best care, and I think every doctor feels that very strongly, just as much as we ever did.

Chall

Dr. Kay, in a speech that he made just a few months ago, said, "I hope we will attract doctors primarily because of interest in, and dedication to, our pattern of practice, rather than salary, as I'm sure that our strength in the past and the future comes from the doctors."Raymond Kay, M. D., "Kaiser Permanente Medical Care Program: Its Origin, Development, and Their Effects on Its Future." (Presentation before the Regional Conference, January 28, 1985). You agree with that?

Cutting

Sure. Sure. Salary is awful good these days, and it's getting tougher on the outside, and we're doing a better job. Probably more than we should. [chuckles] Again, old timer speaking, but I think our physicians are selecting us because the amenities, the freedom to practice, the satisfaction of working in the group, the pride of working with other good physicians, is the thing that attracts the good doctors.

Chall

How about the attitudes of doctors, as the pioneers no longer have that much control? At one time, I think it was in the seventies, doctors wanted to get into leading roles within the partnership. You had long terms then, and I think the doctors were getting a little restless. At least, some of them wanted to come into leadership roles, and so, as you said, you did lower the tenure of executive director and chiefs-of-staff. What about these doctors coming in? Were they an irritant to the pioneers? Or did you see yourselves in those roles when you were younger and setting things up?

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Cutting

No, there are as many different kinds of doctors as there are people in any other clime. Some are very ambitious, and some are very talkative, and some are very quiet. There's a place for all kind of personalities.

Chall

How do they find their places? You were not one of the leading talkative ones in the early days, in the pre-Tahoe days, and afterwards, and you gained your position because of your kind of personality, and the role that you played. What about other doctors coming into the so-called team. Who wins out? How do they find their places, whether they're exacting, whether they're quiet? Do they all find a niche somewhere, or do you lose some?

Cutting

I'm sure we lose some good possibilities. I'm sure some that we take because they seem more apparent, are not necessarily any better or as good as some that are quieter. On the other hand, there's room for the aggressive, the active. It's a matter of selection in life. I don't know how one gets chosen this way, one way or another.

Chall

But you do have the doctors coming in with all these various personalities, and they find their places?

Cutting

Sure. Every doctor's different, just as any group of people are different.

Chall

Was it difficult for the executive board to give up some of its long term tenured leadership roles to this new group of doctors pushing for power?

Cutting

No, I don't think so. It became apparent that probably a finite term was appropriate. And they could be reelected; reelection is possible, is usual, as a matter of fact, so far.

Chall

It's 11:48. I know you have to be at a meeting by 12:00.

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Dr. Cutting's Post Retirement Activities in the Medical Care Program ##

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Medical Consultant, the Kaiser Permanente Advisory Services, 1976--

Chall

I think we're going to talk about your activities since your retirement, and catch up on a few other matters we may have omitted. Let's start with your responsibilities with the Kaiser Permanente Advisory Services.

Cutting

The Kaiser Permanente Advisory Services was an organization that was developed in 1976, just at the time of my retirement. Again, we were bombarded by requests for help, advice, and so on, from a number of clinics, people, organizations of various sorts, around the country, looking for ways to start a program somewhat like ours.

They wanted a quick fix, do-it-yourself kind of a tool, some of them. Some of them were programs that had made a real effort, and were finding that they were not getting along. Others were just interested in knowing more about us, because they were considering the possibility of starting such a program.

Chall

Were these the same kinds of groups that were coming in that caused you to set up the Kaiser Permanente Committee, or were these people asking different kinds of questions?

Cutting

These were a little more specific. The ones that we responded to were the ones that really had something going in interest or actual attempts. The ones that we responded to, to originate the Kaiser Permanente Committee, were more apt to be foreign visitors and general people. But the KPAS group were specific little groups that were trying to really look seriously into starting a program.

Some of them had. One of them particularly had something going pretty well except that the health plan manager and the medical director couldn't stand each other. They couldn't stay in the same room. And it was pretty obvious that they had to do something between themselves before they were going to get a program that would be viable.

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Other medical groups were thinking about developing a program. They had a long way to go because some of the physicians in the group really weren't too enthusiastic about it. They knew nothing of the marketing or the way to establish the prepayment program; forecasting, budgeting, and things of that sort.

As medical consultant, I was a doctor of a two-man team.

Chall

Who was the other person on the team?

Cutting

The other man was John Boardman. He died not too long ago. Beautiful fellow. Soon after that, Bill Slayman joined us, a third person. He had been a health plan manager in Cleveland, and had a long history with Kaiser Industries. He knew public relations, and so on. So we traveled around the country, and it was a very interesting number of years.

It is still in existence, though in the last few years it's tapered down considerably. It was supported by Kaiser Family Foundation.

Chall

The rise of these requests, did they come after the legislation for HMOs, and that kind of change?

Cutting

I'm sure that was a stimulus. It began to give the whole idea a little more credence and acceptability.

The Kaiser Foundation Research Institute, 1976-1980

Chall

Then you had duties as a medical director of the Kaiser Foundation Research Institute. We discussed the institute the other day, but I didn't know exactly what your own role in this might have been.

Cutting

More titular than anything else, perhaps. It was a very pleasant few years. It was to supervise the research institute. It's a program well organized, and can go on without any such person pretty well, but it needs a physician as director. And since I was at this time loose, having been retired from active practice and administrative work, and not yet seventy, they couldn't quite put me on the shelf, so I inherited that position.

Chall

This is when it was applied research?

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Cutting

Clinical, applied research. Most of the projects were from the northern California region, although the crew in the research institute also managed the outside grant applications for other regions; for the Vancouver / Portland region, or southern California region, and so on.

Chall

Were you advising in that capacity?

Cutting

A little advice on that, but primarily it was related to regional, northern California region.

Chall

How long did you do that?

Cutting

Four years.

Co-Director, Total Health Care Program, 1982--

Chall

During the last decade or so, maybe longer than that, there has been a change in medical practice, to some degree, with the use of paramedics and nurse practitioners, and a little more movement into the mental health field in Kaiser. You were telling me the other day about being an old timer, and not being too happy about the growth of the central offices, and I wondered how you looked upon the use of nurse practitioners and paramedics in the medical field here.

Cutting

I think it has exciting possibilities. There are places where the nurse practitioners can do a tremendous job. There are places where they have been a little disappointing.

Chall

In each case where, do you think?

Cutting

They have been very helpful in pediatrics, though in general the pediatricians have been slow in accepting the idea of using nurse practitioners. I think because so much of the pediatric practice is really nursing to the baby, sort of, it's almost a nurse practitioner's role. In outside practice, I'm sure they use nurses, not even nurse practitioners, to a great extent in the pediatrician's office.

In the Ob-Gyn department, prenatal workups and prenatal following is an excellent place for nurse practitioners. For physical examination--they do a perfectly satisfactory general physical examination. They can evaluate, can follow their patients.

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They do an excellent job in health education, and can give the attention to the non-sick patient's problems; the stress, the marital problems, the smoking, the obesity, and so on.

A general physician will tell a patient to stop smoking, but that's about as far as he goes. Whereas, the nurse practitioner can spend more time discussing reasons, and introducing health education programs, and so on. The nurse practitioner is not equipped to take care of the really difficult diagnostic and sick patients. Therefore, she turns her energy and her interest to the health maintenance side.

The problems with nurse practitioners is that they do take more time with patients. Their costs are lower, but it pretty much washes out as far as economy is concerned.

Chall

In terms of the patient, preventive care is what you used to stress in the early days. Does this fit into the preventive care aspect of the health program?

Cutting

It certainly can. We've got it in varying degrees in all of our medical centers, some considerably more than others. Again, it depends primarily on the interest of the physician in the medical center, to spark the new idea, the new concept, of medical care.

Chall

Is the problem at Kaiser still one of accessibility of the client to primary care? This, I see, is discussed practically from day one. It has always been an area of concern.

Cutting

There's no question but what it is a problem. I think it's a problem of any physician's practice, but, as you enlarge the membership, enlarge the mass of people that you're taking care of, it becomes more acute. The telephone system begins to break down. In the past, in history, we have used up the entire telephone system of the entire Walnut Creek city, for our hospital. And they gave up, they can't do anything until they get some more equipment; so that it's a tremendous, massive problem, just the pure telephoning.

We always can take care of the acutely ill patient in the emergency departments open twenty-four hours a day. We can always take care of the urgent patient, through emergency or through a drop-in, or a non-appointment program, if a patient really needs care. The patient who calls up and wants a physical examination can be kind of startled if it's two, three, four months down the line. It seems horrendous. And yet it really is perfectly appropriate, although we would like to have it much quicker, better accessibility than that.

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So the problem of accessibility depends really upon the acuteness of the need. We think that we can adjust to that pretty well, although it's not always highly satisfactory from the patient's standpoint.

Chall

With all of those little pamphlets and things that we looked at the other day, in which this kind of information is available, is that sufficient? If a member learns to use the system properly, then is the fact that you have to wait three months for an appointment--that kind of accessibility--a problem still?

Cutting

No, once the patient learns to use the system, I think they do very well. They have attached themselves to one physician, one primary physician, and he can explain that he wants to see them in six months again. He remembers the patient if the patient calls up. The patient can get to that doctor, the doctor's nurse, and there is personal accountability there, so that they can come in and be seen. It works very well once the system is understood.

Chall

Yes. Is what you're telling me what Dr. Garfield was speaking about in 1974, and at other times--what he called the "new medical care delivery system approach." He claimed it was a great deal better and less expensive than the current approach to medical care. "I would urge you," he said, "to get on with it as soon as possible."

This was his speech that he made to the executive committee of the Permanente Medical Group, on April 24, 1974.Garfield, et al, "Historical" Remarks, 6. You and he and Dr. Collen spoke. What was he talking about?

Cutting

Dr. Garfield, for years, has said that we've got a sick plan, not a health plan. That we can be pretty proud of the organization, the prepayment to a group of physicians and hospital, to provide care under the prepaid, group practice, mode. It reverses the usual economics of medicine; the sick patient is the liability, and the well member is the asset, but we don't pay as much attention to the well people as we should because they're the ones that really support the program.

He pointed out that the membership is a mixture of sick, asymptomatic ill, of the worried well, and the well, and what we do is to mix them all together and dump then into a sick care system. They have to be shuffled around in a rather inappropriate way, an inefficient way, to get to the appropriate care that they need. Wouldn't it be better to identify their needs before we dumped them into this system?

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We know that 60 percent of the doctor's office visits don't require the expertise of a physician. Therefore, a physician spends half of his time trying to find something wrong with well people. He doesn't have any time left to really spend, with interest, in the health maintenance, in the habit, the lifestyle changes, the health care, health education side. So let's identify the needs of these patients before they come in.

Ideally, the multiphasic screening program, with the health questionnaire, provides a good base view of the needs of the patient. That, together with a physicial examination. Why not have the physical examination be done by a nurse practitioner, who does a perfectly adequate examination? There would be a primary care physician next door to refer and to consult with, who would take care of the sick patients that come through.

This would make the nurse practitioner, the provider of care, the captain of this patient's care. She will work out with the patient a program for continuity of care, put that into a computer so that there can be monitoring of compliance of the treatment as to the months and years. Add to that a health education department, where the nurse practitioner can send the patient, not across the street or down the corner, but right next door, right in the same department.

So a patient can't help but go through the health education department where there is real attention again to stop smoking, or where there are pictures of why, and what happens, and through which a patient can begin to get some impact. Not just tell a patient to lose ten pounds, but a place where there would be instructions on diet and nutrition, and so on.

This would comprise a health hazard appraisal program, breast examination programs, and so on, so that you have a key to a patient's general health. Add to that a mental health consultant that can help the nurse practitioner develop an ease in talking to patients about psychosomatic problems, and also to make an easy, informal referral to the mental health counselor, rather than having to make a formal phone call to the psychiatry department, which people don't like to do very much. Here is, again, a mental health counselor right next door, on the same team.

Chall

Has that worked out? We've already talked about some of these things happening, without calling it by name. Is this Dr. Garfield's--

Cutting

Total Health Care Program.

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Chall

It has been developing.

Cutting

It's been in progress now for three years, and it's worked very well. The actual program is based, as a research project, in that new members joining the Oakland area are divided on a random basis between two groups: the Total Health Care group, and the traditional medical group. The traditional goes their usual way. When they want to see a doctor, they call up, and try to get into the system.

The Total Health Care group, the major group, are contacted by letter, encouraged to come in. We want to see them, and we give them an appointment for the multiphasic program, to start them in this Total Health Care outreach. It's too early yet to give any very hard statistics, but we do have an extensive evaluation program going on--that's the research part--trying to identify the utilization, the satisfaction, the accessibility, the terminations.

We find that during an open season, it looks as if fewer Total Health Care members terminate than traditional. Of course, the other question is the cost. Eventually, we'll know better about mortality, but that's way down the line, if we ever get there. So much of it is difficult to put down in figures, but we are trying to get as objective an evaluation as we can.

Chall

So this is your work as investigator of the Total Health Care Program that you are now doing. And you and Dr. Garfield were co-directors, or co-workers.

Cutting

He was primarily doing it. He gave me the title because I was interested and talked about it, but he was really running it. When he died, it fell onto my shoulders. I've had to pick it up.

Chall

How did Dr. Garfield take his ideas and get them out there so that they could be tried? With whom?

Cutting

It's not easy. There is a lot of inertia in a medical center. In a medical department, most physicians tend to be satisfied with the status quo, and you have to find someone who's willing to take a challenge, to try something new. Dr. Robert Feldman was the doctor that Dr. Garfield worked with, he's been managing the clinic.

The two of them together developed it with the concurrence of the administration, hospital administrator and physician-in-chief Dr. [A. Joseph] Sender, in Oakland. The research is largely supported by the family foundation, with additional support from Central Office, Mr. [James] Vohs' private kitty, and some from the northern California region Mr. Steil, and Dr. [Bruce] Sams.

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Chall

I think it's quite interesting that Dr. Garfield always had an innovative approach, even as he grew older and the health plan became established. Perhaps it was because he wasn't caught up in the establishment, day-to-day, that he was outside enough to be able to look at things from a different perspective. But he didn't lose that creative touch, did he?

Cutting

He certainly did not. Idealistic, enthusiastic, persistent. He worked day and night twisting arms, and doing everything necessary to further a trial. Some of the things are probably so idealistic they won't really hold water, but you never know. Certainly without trying you won't get anywhere. A motivated, tremendously innovative man.

Chall

And he obviously could motivate others?

Cutting

He had a very persuasive, quiet, shy way of twisting your arm. [laughs]

Chall

So as the present investigator of the Total Health Care Program, do you have to carry on arm twisting, and prodding the same as Dr. Garfield did? How is your working relationship with Dr. Feldman?

Cutting

Excellent. Good.

Chall

So he's a pioneer in this sense?

Cutting

Yes.

Chall

There are always pioneers, you just have to find them, I guess.

Cutting

That's right.

Chall

And you're starting this, the pilot program in Oakland, and not moving it into Hayward, or Fremont, or other centers?

Cutting

We are asked to give a report of it next week in Richmond, and the week after that, or two weeks or so, in Fremont. Santa Clara started a similar program when the San Jose, the Santa Teresa group started a somewhat similar program. I haven't caught up with them in the last couple of years to know what they're doing now.

Dr. Mott, when he went to Sacramento, started the multiphasic program, and parts of the so-called Total Health Care concept.

Chall

Is he retired?

Cutting

He died.

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Dr. Cutting Reflects on the Kaiser Permanente Medical Care Program and His Part in It ##

Chall

Have your ideas about the plan changed over the years? Or have they just been extended, from the time you started until today?

Cutting

Oh, I think the fundamental principles that were identified early are still as valid as they were then. They can occasionally be modified for a while, but the best combination is what we had in the beginning, and what we have in the best of the organizations today.

I think it's remarkable. Sort of like the constitution of the United States, it's stood the test of time surprisingly well.

Chall

Do you think that Kaiser Permanente, the health plan, has suffered as a result of size, and if there's a limit which affects the cost-benefit ratio to the detriment of the patient and the doctor?

Cutting

No question but that size tends to attenuate the spirit, the motivation, the enthusiasm, perhaps. This isn't a necessity, but it usually happens with any institution, I think. The larger the institution, the more difficult it is to change, to adapt to changes. And certainly medical care is changing in the country, so, even though our principles are the same, we have to adapt to changing competition, to requirements for benefits and things of that sort. Changing technology.

A one-hundred bed hospital with twenty-five or thirty doctors which can develop an esprit de corps, an enthusiasm, a pioneering spirit dedicated to an identified, particular group of members, would be ideal. As you get bigger, it becomes more difficult. Training personnel: receptionists, their attitudes, nurses' attitudes. The union's influence in a large institution has real effect, a different influence.

The so-called Hawthorne Effect of a small group, enthusiastic pioneers, is a real true factor. If we could develop that in a hundred different little Hawthorne groups of enthusiasm, it would be ideal.

Chall

Tell me about the Hawthorne Effect, I haven't heard of that.

Cutting

I don't know much about it either, but I know there's a so-called Hawthorne Effect. That is the spirit that can be developed in a small group of people that is there only because it's small, because it's pioneering, because it's something new. And when it gets old, it kind of fades off.

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Chall

I see. Dr. Neighbor lamented that in his oral history in 1974.Neighbor interview, tape 5, side 2, 12-13. He felt it keenly, and I don't think that I've seen it discussed in anybody else's interviews. Dr. Garfield might not have expressed it, because he was always looking ahead. But Dr. Neighbor did feel it keenly.

Cutting

I've always wanted to develop a program with a module, a small group of our physicians, much like the Total Health Care, not necessarily nurse practitioners, but maybe some. Two or three or four primary care physicians would have a certain group, maybe the hod carriers, or something of that sort, as their group, and they'd be proud of how they could take care of that particular group.

Then you'd get interested in what their occupational problems were, and their home life. It would be to me a more meaningful kind of a group. I'm going to keep on working along that line for a while.

Chall

Let me ask you one final question. In terms, over the years, of your friendships, they remained strong with Dr. Garfield and Dr. Neighbor, I assume.

Cutting

Very strong.

Chall

Where did you find your other friends? Were they within the group here, I'm thinking of the health plan people? And were they mainly with your original pioneers, or did you branch out to some of the younger people?

Cutting

Oh, I have a vast group of friends.

Chall

In and out of the program?

Cutting

In and out of the program. I think our best friends, as it were, were Dr. Garfield and Dr. Neighbor. Good friends with Dr. Olson, who was at Coulee when we were there. Dr. Moore, the Moores, we were classmates. He's dead now. A good many of those old friends are gone, I'm afraid.

Chall

That's true.

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Cutting

We have lots of friends outside of the program. The neighbors where we lived, and so on. Mrs. Cutting made lots of friends in the neighborhood, through the kids at school, their parents. Doctors' wives, doctors, down the line.

Chall

I understand in the early years the doctors' wives, because they weren't accepted in the medical auxiliary, were part of what was known as "Garfield's Girls," and that your wife had many of their socials and meetings in your home.

Cutting

Yes, "Garfield's Girlies" were a very active bunch, and I think it played a very important cohesive role in the early days. Their picnics and their sales--garage sale type of things, and all that sort of thing.

Mrs. Cutting was extremely active in a lot of areas in those days. She actually hired most of the help during the wartime, and found housing for most of the doctors during that time. She drove a station wagon between the Oakland Hospital and the field hospital and first aid stations. When our purchasing agent was drafted in the army she had to learn purchasing. She was--

Chall

A very capable woman.

Cutting

She was an active gal.

Chall

Now, is there anything that you would like to say to sum up? Is there something on your agenda that we haven't covered?

Cutting

You've done a pretty good job. It's been a very satisfying, fulfilling life. I think it's been very interesting to go through the cycle of being questioned, and ostracized, and criticized, to being respected, and emulated, and challenged by competition.

Chall

Well, if there's anything else you find you want to set in there, you can do that when you're reviewing. Thank you for your time and for your thoughtful and candid interview.

• Transcriber: Michele Anderson
• Final Typist: Keiko Sugimoto

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Tape Guide -- Dr. Cecil Cutting

Interview 1: February 26, 1985 1

Interview 1: February 26, 1985 1
• tape 1, side A 1
• tape 1, side B 11
• tape 2, side A 21
• tape 2, side B 30

Interview 2: March 6, 1985 35

Interview 2: March 6, 1985 35
• tape 3, side A 35
• tape 3, side B 44
• tape 4, side A 52
• tape 4, side B 60

Interview 3: March 19, 1985 69

Interview 3: March 19, 1985 69
• tape 5, side A 69
• tape 5, side B 77
• tape 6, side A 85
• tape 6, side B 92

Interview 4: March 21, 1985 96

Interview 4: March 21, 1985 96
• tape 7, side A 96
• tape 7, side B 104

Appendix

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November 1, 1943

Sidney R. Garfield, M. D.,
Permanente Foundation Hospital,
Oakland 11, California.

This will confirm and supplement the understandings reached in our previous discussions concerning the carrying out of certain programs authorized by the trustees of the Permanente Foundation. At our meeting with you on July 22 certain projects were discussed and authorized and since then various conferences have been held with you and the programs have been started. In order, however, that we may have a more definite understanding, the following arrangements are confirmed in regard to this work:

1. The trustees of the Foundation have authorized the disbursement of the following amounts for carrying on the following activities:
   • (a) The sum of $25,000.00, for the purpose of obtaining the necessary equipment and for the training of personnel and for the establishment and operation of a clinic for the intensive treatment of syphilis in the East Bay area;
   • (b) The sum of $10,000.00, to cover the expense of medical treatment and hospitalization of war workers, particularly in the shipyards, who have come to this locality and who, before obtaining employment, have become injured or sick and are unable to provide for their own medical treatment;
   • (c) The sum of $5,000.00, for the purpose of making a statistical study of the evaluation of the medical care program in various communities;
   • (d) The sum of $5,000.00, for the purpose of making a preliminary study and analysis of a program for the rehabilitation of disabled physicians discharged from the armed services;
   • (e) The sum of $2,500.00, for the purpose of purchasing supplies for occupational therapy program for injured and disabled shipyard employees.

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2. In our previous discussions it was decided that due to the fact that you now have available at the Permanente Foundation Hospital a staff who can carry on the above work, it would be advantageous for the present to make arrangements with you for carrying out these programs. We understand that at the present time a large portion of the program can be carried on by various members of your staff on a part-time basis in conjunction with their other duties, and that in this way substantially greater results can be obtained from the funds allocated them by setting up a separate organization in the Foundation to carry on this work. This will also result in a material economy in manpower. At a later date when some of these programs become more fully developed, it may then become advisable for the Foundation to set up an entirely separate organization to continue this work. For the above reasons, we suggest that the following procedure be adopted for the time being and until further notice from us that a different arrangement shall be made:
   • (A) SYPHILIS TREATMENT PROGRAM:
   •     C. B. Pringle, M. D., and Miss W. Beck have been selected to organize the clinic, and have been sent to Chicago for a period of from one to two months for training in this work. The Foundation will compensate you for their salaries and expenses during this period. Upon their return you will prepare and submit for our approval the plans for the clinic and the equipment list which upon approval will be ordered for us and at our cost. As soon as possible thereafter you will submit to us a proposal for the operation of the clinic either under an arrangement whereby you will operate the clinic for us at our cost or under an arrangement whereby the clinic staff will be carried as a separate organization, whichever arrangement shall prove the most efficient and practical. With your proposal for operation you will also submit a budget for estimated monthly operating costs, and at that time we will determine the method of operation and allocate operating funds.
   • (B) TREATMENT OF INDIGENT WORKERS:
   •     It is understood that you will provide medical care and hospitalization for such workers and will bill the Foundation for the cost of such services at your regular rates. Where possible, the eligibility of the patient for treatment under this program will be determined prior to admission to the hospital or clinic, and we will provide the services of

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     ― 110 ―
     an administrator at the hospital who will pass upon the eligibility of the patients. It is recognized, however, that it is not possible or practical in all instances to determine the status of the patients prior to treatment, and you may therefore render bills to the Foundation for the treatment of patients whom you believe are entitled to care under our general standards of eligibility, although their eligibility was not determined prior to admission, and if, upon review, such patients are eligible, reimbursement will be made for services rendered for them in the same manner as if their qualifications had been previously approved. It is understood that the Foundation has allocated an amount of $1,000.00 a month for this purpose, but that further sums in the discretion of the trustees may be made available.
   • (C) STATISTICAL PROGRAM:
   •     Two statisticians, Ethel Palmer and Martha Eaton, have been employed at a salary of $185.00 and $190.00 a month, respectively, to prepare preliminary data for this program. It is understood that you will bill us monthly for the salaries of these two statisticians. Their preliminary survey when completed shall be submitted to the Foundation, together with recommendations for the manner in which the work shall be continued. At that time further approval for the carrying out of the program will be made.
   • (D) PRELIMINARY STUDY AND ANALYSIS OF PROGRAM FOR REHABILITATION OF DISABLED PHYSICIANS DISCHARGED FROM THE ARMED SERVICES:
   •     Dr.. Kuh, Dr. Jonas and Dr. Rice are devoting a portion of their time in making a preliminary study of the methods by which a program for the rehabilitation of disabled physicians may be carried on. We expect that this program will become a major post-war program of the trust, and at this time it is desired to prepare the preliminary work to make this program effective at the proper time. It is understood that you will bill us monthly for the time of the doctors spent in this work.
   • (E) OCCUPATIONAL THERAPY PROGRAM:
   •     A list of supplies for the occupational therapy program of patients at the hospital has heretofore been submitted and has been approved. The sum involved in this list

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     amounts to approximately $1,000.00. It is understood that additional supplies of the same nature will be purchased for the account of the Foundation to carry forward this program. The total amount allocated for this, however, is limited to $2,500.00.

It is further understood that monthly reports will be submitted to the Foundation, to the attention of the undersigned, upon all of the foregoing activities, and that any of the foregoing arrangements may be modified by the Foundation at any time.

If the foregoing meets with your approval, will you kindly sign and return to us one copy of this letter.

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Biographical Data

Cecil C. Cutting, M.D., is one of the pioneering physicians of Kaiser Permanente. Dr. Cutting was Chief Surgeon at Mason City Hospital on the construction site of Grand Coulee Dam, where a group practice prepayment plan was developed for Kaiser workers and their families. In 1942, Dr. Cutting became the first Chief of Staff of the Permanente Foundation Hospital in Oakland, and in 1947, he was elected a Director of The Permanente Medical Group. He served in both capacities until 1957, when he was elected Executive Director of The Permanente Medical Group, holding this position until his retirement in 1976. For the next five years, Dr. Cutting was Medical Advisor to Kaiser-Permanente Advisory Services and Medical Director of Kaiser Foundation Research Institute.

A graduate of Stanford University and the Stanford University Medical School, Dr. Cutting interned at Stanford Lane Hospital in San Francisco. He fulfilled his resident training in surgery at Stanford Lane Hospital and San Francisco City Hospital. During his tenure as Chief of Staff for TPMG, Dr. Cutting also served as a Clinical Instructor in Surgery at the Stanford University Medical School from 1943 to 1945.

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IndexUnless otherwise specified, all place names are California. KPMCP refers to Kaiser Permanente Medical Care Program. -- Cecil C. Cutting, M.D.

• Advisory Council, 54, 59, 63.
  • See also Permanente medical groups
• Agnew, George, 9
• American Medical Association, 11-12
• Ash, Donald, 25
• Babbitt, Hal, 8, 66
• Baritell, A. LaMont (Monte), 15, 24, 26, 39, 40, 41, 49, 51, 57-58, 63
• Baroni, Peter, 36n
• Bayse, James, 36n
• board of directors. See Kaiser
  • Foundation Hospitals/ Kaiser
  • Foundation Health Plan
• Boardman, John, 97
• Brammer, Verne, 70
• cardiovascular surgery in the KPMCP, 64
• Caulfield, Walter, 92
• Central Office, 83, 84-85, 102
• Cleveland, Ohio, KPMCP in, 80-82, 83
• Collen, Morris F., 15, 21, 24, 27, 40, 41, 49-51, 57, 58, 63, 70-71, 86, 87-88
• Cook, Wallace H., 42
• Coulee Dam, Kaiser Company medical program at, 4-12, 91
• Cutting, Cecil C.
  • as administrator, 65-68, 73-74, 81
  • committee memberships, 40-41, 57, 63
  • education, 1-3
  • ideas on centralized administration, 84, 90
  • non-medical activities, 105-106
  • retirement projects, 96-103
  • as surgeon, 28, 64-65
• Cutting, Mildred, 6, 10, 14, 18, 106
• Dannenberg, Thurman, 35
• Day, W. Felix, 39, 49, 69-72, 76
• de Kruif, David, 29-30, 78
• de Kruif, Paul, 28, 30, 32, 93
• Denver, Colorado, KPMCP in, 83
• De Silva, Joseph, 54
• doctors
  • idealism of, 93
  • selection of, 34-35, 95
  • See also Permanente medical groups
• Drobac, Martin, 76
• Eden Medical Group. See San Leandro Kaiser Permanente Clinic
• Ekhart, George, 29, 78
• Erickson, Robert, 83
• Fabiola Hospital, 14-16, 20. See also Oakland, Kaiser Foundation Hospital in
• Feldman, Robert, 102-103
• Fitzgibbon, Paul, 18-19, 24, 36, 40-41, 49
• Flint, Thomas, 31
• Friedman, Melvin, 24, 40, 41
• Garfield, Helen Chester Peterson (Mrs. Sidney R.), 17-18
• Garfield, Sidney R., 4-9 passim, 12, 14, 15-16, 17-18, 19-20, 22-23, 24-25, 30, 31, 32-34, 36-37, 38, 40-42, 44-51, 56, 66, 72, 75-76, 80, 85, 88, 90-92, 100-103, 105
• Garfield, Virginia Jackson, 16-17
• Gill, Gerald, 15
• Gillett, Ray, 4, 6
• Grant, Donald, 15, 24, 36, 41, 64

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• Harbor City, Kaiser Foundation Hospital in, 54
• Harbor Hospital (south San Francisco), 26
• Haugen, Norman, 15, 24, 41
• Hayward, California, Kaiser Foundation Hospital in, 78
• Inch, Thomas T. (Tod), 55
• Industrial Indemnity Insurance Company, 26
• Jones, Frank C., 76-77
• Kabat Kaiser Institute, 37-39
  • Vallejo, 29-30, 39
• Kaiser, Alyce Chester (Ale), 17-18, 42, 44-45
• Kaiser, Bess (Mrs. Henry J., Sr.), 18, 34, 46
• Kaiser, Edgar F., 7, 8, 22, 73-75
• Kaiser, Henry J., Family Foundation, 81, 97, 102
• Kaiser, Henry J., Jr., 28-29
• Kaiser, Henry J., Sr., 15-16, 18, 19, 22, 24-25, 29, 33, 43-47, 54-56, 57, 61, 71, 73-75, 79-80
• Kaiser Foundation hospitals. See city in which hospital is located
• Kaiser Foundation Hospitals/ Kaiser
  • Foundation Health Plan, 46-47
  • board of directors, 48-49
  • management, 55-56, 60, 63, 66, 70
  • See also Central Office
• Kaiser Foundation Research Institute, 86-87, 97-98
• Kaiser Permanente Advisory Services, 96-97
• Kaiser Permanente Committee (Kai Perm), 81-84, 96
• Kaiser Permanente Medical Care Program (KPMCP)
  • 1944-1950, 24-42
  • 1951-1958, 43-68
  • 1959-1970, 69-106
• Kaiser Permanente Medical Care Program (continued)
  • expansion of, 80-82
  • financing for, 90-93
  • quality assurance, 91
  • total health care program, 98-103
• Kaiser Permanente medical care programs, regions and areas. See region in which program is located
• Kay, Raymond M., 24, 39, 43n, 53-54, 62, 73, 76, 83, 94
• Keene, Clifford H., 31, 39, 55-57, 63, 70, 82-83
• King, Alexander, 25, 41
• King, Robert, 20, 36, 40-42
• Kuh, Clifford, 25, 86
• Lei, Beatrice, 25, 36
• Liebgold, Howard, 38
• Link, George E., 43, 58
• Liu, —, 28
• Mead, Sedgwick, 38
• Medical Care Delivery System, 88
• medical groups. See Permanente medical groups
• Medical Methods Research, 51, 87-88
• medical societies, relationships with KPMCP, 19, 27-28, 30-32, 36-37
• Merritt Hospital (Oakland), 15
• Miller, Michael, 8
• Moore, Richard, 4, 6, 12, 25, 29, 105
• Mott, John, 29, 78, 103
• Napa, Kaiser Foundation Hospital in, 26
• Neighbor, J. Wallace, 6, 8, 10, 11, 25-27, 36, 40-41, 57, 105
• nurse practitioners, 98-99
• Oakland, Kaiser Foundation Hospital in, 14-15, 20-21
• Olson, Charles, 9, 10, 105
• Ordway, Alonzo B., 8

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• Packer, Samuel, 81
• partnerships. See Permanente medical groups
• patent ductus arteriosus, surgery for, 64
• Permanente Foundation, 16, 22, 54
• Permanente Health Plan, 20, 22, 25, 26
• Permanente medical groups, 55-56, 57-62
  • northern California, 25, 40-42, 44-53, 57, 62-63, 66-68, 69-79, 89, 92
  • southern California, 52-54, 73
• Permanente Services Organization, 76
• Portland, Oregon, KPMCP in, 89
• publications and information, KPMCP, 89-90
• quality assurance, 88-89
• race relations in the KPMCP, 79-80
• regions and areas, 63, 85. See also region in which program is located
• Reinhart, Arthur, 69
• Reis, Joseph F., 8, 43, 58
• research in the KPMCP, 85-89, 97-98, 102
• Richmond, Kaiser Foundation Hospital in, 14-15, 22, 27
• Rubin, Leonard, 88-89
• Sacramento, Kaiser Foundation Hospital in, 78
• Sams, Bruce, 102
• San Diego, Northern California
  • Permanente Medical Group venture in, 69-76
• San Francisco, Kaiser Foundation Hospital in, 26-27, 49-50, 69-
• Sanger, Evelyn, 9
• San Leandro Kaiser Permanente Clinic, 29, 77-78
• Saward, Ernest W., 78, 80-81
• Schrick, Edna, 78
• Searcy, Geraldine, 6
• Sender, A. Joseph, 102
• Slayman, William, 97
• Smillie, John S., 35, 43n, 87
• Steil, Karl T., 75-77, 81, 102
• Steil, Paul J., 39
• Stewart, Gerald C., 92
• Stollery, Stubb, 47
• Tahoe conference, 19, 48, 54, 56, 58-62, 63, 70
• Tennant, Fred, 66, 69, 75
• Total Health Care Program, 98-103
• Trefethen, Eugene E., Jr., 20-21, 22, 25, 43, 56, 58-62, 73-75
• Vallejo, Kaiser Foundation Hospital in, 26
• Vancouver, Washington, KPMCP in, 25
• Virginia Mason Clinic (Seattle), 12-13
• Vohs, James A., 102
• Waddell, Todd, 8
• Walnut Creek, Kaiser Foundation Hospital in, 42, 44-45
• War Manpower Commission, 20
• Weinerman, Richard, 38
• Wetherall, Winifred, 6
• Wiley, Eugene, 7, 12
• Working Council, 47-48, 52, 54-55, 57-58, 60. See also Permanente medical groups
• World War II, and the Kaiser
  • Company medical programs, 14-22, 106
• Yedidia, Avram, 80-81

Malca Chall

Graduated from Reed College in 1942 with a B.A. degree, and from the State University of Iowa in 1943 with an M.A. degree in Political Science.

Wage Rate Analyst with the Twelfth Regional War Labor Board, 1943-1945, specializing in agriculture and services. Research and writing in the New York public relations firm of Edward L. Bernays, 1946-1947, and research and statistics for the Oakland Area Community Chest and Council of Social Agencies 1948-1951.

Active in community affairs as a director and past president of the League of Women Voters of the Hayward Area specializing in state and local government; on county-wide committees in the field of mental health; on election campaign committees for school tax and bond measures, and candidates for school board and state legislature.

Employed in 1967 by the Regional Oral History Office interviewing in fields of agriculture and water resources. Project director, Suffragists Project, California Women Political Leaders Project, and Land-Use Planning Project.

About this text
Courtesy of Regional Oral History Office. The Bancroft Library. University of California, Berkeley. Berkeley, Calif., 94720-6000; http://bancroft.berkeley.edu/ROHO
http://content.cdlib.org/view?docId=hb8p3006n8&brand=oac4
Title: Cecil C. Cutting, M. D., History of the Kaiser Permanente Medical Care Program
By:  Cutting, Cecil Cooper, 1910-, Chall, Malca, editor
Date: 1986 (issued)
Contributing Institution: Regional Oral History Office. The Bancroft Library. University of California, Berkeley. Berkeley, Calif., 94720-6000; http://bancroft.berkeley.edu/ROHO
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