WWII closed down in three acts. The Italians retired from the field in September, 1943. The Germans left in May, 1945. The Japanese pressed on another four months, not capitulating until the actual surrender document was signed on 2 September, 1945. Even then, there were Japanese belligerants who failed to get the memo and continued their personal war(s). It wasn’t until 1974 that Hiroo Onoda (who did his fighting in the Phillippines) decided he had made America suffer enough. He surrendered early in that year.
Later in 1974, Tero Nakamura (who fought in the Dutch East Indies) arrived at the same conclusion. He, too, decided his war was over. Nakamura, because it was later in the year, is recognized as the last Japanese serviceman of WWII to give up.
In 1945, on the day Imperial Japan officially surrendered, a crowd estimated at 750,000 spontaneously gathered at Times Square in New York City. One of those people was Alfred Eisenstaedt, a staff photographer for Life magazine. At that moment he was roving around Times Square with his camera, looking for something memorable. He glanced at an American sailor kissing a dental assistant, still in her office uniform, and took an impromptu photograph. That is what staff photographers did, back then. It was a form of throwing cookie dough against the wall. Maybe something would stick. The picture was taken and, without bothering to record their names, Eisenstaedt continued his rambling walk, fruitlessly searching for a scene that would memorialize the national catharsis.
It is not recorded what Henry J. was doing that day, but being a reflective man, he might well have been thinking of the injuries recorded and the lives lost in his shipyards since he got that call from General Somervell seven years prior. If he was fair to himself, he would also reflect on how his Liberty and Victory ships contributed to the shortening of the war and thus reduced the potential butcher’s bill.
When Henry J. interrupted his dinner to take General Somervell’s call back in 1939, the nation was a decade into the Depression. Entire areas of the country had depopulated and moved to California in the hope of employment. Getting labor for the prospective shipyards was not an issue. Each day before dawn, the unpaved waiting area in front of the employment office was stuffed with hopeful applicants. The weight of the crowd behind pressed the early arrivals into the high woven wire fencing. By the time the hiring offices opened the men in front looked like waffles.
Most of the men were inexperienced in industrial work and often in poor health. These were dirt farmers from places like Oklahoma. They knew how to worm pigs and plow a straight furrow. They knew nothing about shipbuilding. But they were hard workers, motivated by despondent wives and hungry children. They were burning for employment. And they could be taught.
Henry J. was aware of the questionable health of his labor force, but America was preparing for war. Although the draft had not yet been activated, healthy men could read the clouds and were already starting their preparations. Keep your job if you had one. Save as much cash – in small bills – as possible. Stock up on long-lived items like salt, grains, and blankets. Don’t forget seeds for the kitchen garden. Arrange for your wife and kids to live with her parents until you return. Hope you do. For the others, for the women left behind, there were ships to be built and boots, bullets, and beans to ship thousands of miles. Their men had to have equipment and supplies. Public health was an issue for another time.
Bessie Kaiser – “Health Care Pioneer”
Bessie Kaiser (nee Fosburgh) had long held the public health issue of her husband’s employees in her mind. She was known to do so. The DanaHall.org archives refer to Bessie as a health care pioneer. During the war, when the men were gone and women were recruited to help the war effort by building ships and tanks, bombs and planes, Bessie extended her interests and created the first industrial childcare facilities for middle class women, back when middle class meant “having a job”.
It wasn’t just childcare. In one of her letters to her friend Eleanor Roosevelt, the wife of the then-President, Bessie discussed the possibility of offering affordable medical care to her husband’s workers, to be paid for not with public funds but by the enrollees themselves.
That novel idea started when Henry J. Kaiser met Dr. Sidney R. Garfield and his 12-bed hospital.
Dr. Garfield was a young surgeon looking for work. His travels took him past the Colorado River Aqueduct then in construction. He looked at the thousands of laborers beavering away, and he thought he saw opportunity: these men would need medical care.
In 1933, Dr. Garfield borrowed money (per Kaiser Permanente, July 21, 2011) and built Contractors General Hospital six miles from Desert Center, California, at the intersection of Interstate 10 and State Route 177. There he treated sick and injured workers until he went broke.
The problem was not construction funds, it was insufficient working capital. Although not all men had insurance Dr. Garfield refused to turn any of them away. He usually wound up eating his bill. Other men may have had insurance, but the insurance companies were often loath to pay. The hospital’s expenses soon exceeded its income, and Dr. Garfield worked himself into penury.
Harold Hatch, an engineer turned insurance agent, suggested the insurance companies pay Dr. Garfield a fixed amount per day per covered worker, up front. This would solve the hospital’s working capital problem and, at the same time, shift Dr. Garfield’s emphasis from treating illness and injury to maintaining health and safety. It was a paradigm shift. For the princely sum of 5 cents per day, the “prepayment” system was born. For an additional nickel a day workers could also receive coverage for non-job-related medical problems. Thousands of workers enrolled and Dr. Garfield’s hospital became solvent.
As the aqueduct project wound down, Dr. Garfield prepared to leave his desert hospital and begin an independent practice in Los Angeles. But he got a call from Henry J., who asked him to provide health care to 6,500 workers and their families at the then-largest construction site in history: the Grand Coulee Dam, in Washington state, then being built by, ahem, Henry J. Kaiser.
There was a dilapidated building serving the workers on the Grand Coulee as a type of hospital. Dr. Garfield moved his practice there, renovating and updating the hospital to turn it into a state-of-the-art treatment facility. It is presumed Henry J. funded the improvements. Dr. Garfield then recruited a team of doctors to work in a “prepaid group practice”. The method was a wonderful success with the workers and their families, but the dam was approaching completion and the grand experiment was reaching an end.
Then, WW II burst through the door and America’s mobilization brought tens of thousands of workers, some already in poor health, flooding into the Kaiser docks. As Henry J.’s shipyards expanded it became obvious his employees would need health care. Henry J. was convinced that Dr. Garfield could solve the problem, but it took a special release from President Franklin Roosevelt to free Dr. Garfield from his approaching call to active duty. The release was made specifically so Dr. Garfield could organize and run a prepaid group practice for the workers at Kaiser’s Richmond shipyards. By 1942 Henry J. had established, for his shipyard employees, the first health-maintenance organization.
The war came to an end in 1945 (except for Nakamura and Onoda, of course) and almost immediately the shipyard workforce was reduced to 13,000. Only about a dozen of the 75 members of the medical group remained, but Henry J. had foreseen the value of the HMO and planned for its survival. His struggles were fruitful, and on July 21, 1945, weeks before the end of the Japanese hostilities Kaiser Permanente, in three entities, officially opened to the public. Its organization chart is interesting.
Two of these entities were non-profit: the Kaiser Foundation Health Plan and the Kaiser Foundation Hospitals. The third part, Permanente Medical Group, is for-profit. No published scope of work was found for the Permanente Medical Group(s), but it might be reasonable to imagine that individual physicians joined one or perhaps more of the (for-profit) Permanente medical groups, among whom the member physicians could discuss and, if indicated, refer cases.
The patient flow therefore begins with the marketing arm of the triptych, the non-profit Kaiser Foundation Health Plan.
Dun & Bradstreet notes that The Kaiser Foundation Health Plan “. . . operates as Kaiser Permanente, serves around 12.6 million members in eight states and the District of Columbia. It is one of America’s leading health care providers and nonprofit health plans. Kaiser has an integrated care model, offering both hospital and physician care through a network of hospitals and physician practices operating under the Kaiser Permanente name. Members of Kaiser health plans have access to hospitals and hundreds of other health care facilities operated by Kaiser Foundation Hospitals and Permanente Medical Groups.”
The actual health care business is structured around the second (non-profit) entity, Kaiser Foundation Hospitals. Of the hospitals and to a lesser extent the for-profit Permanente medical groups Dun & Bradstreet says “The hospital group operates nearly 40 acute care hospitals and 680 medical offices in eight states (California, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia, and Washington) and Washington D.C. The company’s largest presence is in California, where the majority of its hospitals (are) located. Kaiser Foundation Hospitals employs more than 21,000 physicians, representing all medical specialties.
Once a member of the Kaiser Foundation Health Plan is accepted at a Kaiser hospital, the (for profit) Permanente physician’s group provides the actual treatment.
Although it was Bessie’s idea, Henry J. took the credit. He used to call the health plan his greatest achievement. And in 1973, Kaiser Permanente was used as the model for the federal Health Maintenance Organization act which encouraged the formation of other HMOs. We have Health Maintenance Organizations today because of Bessie, who cared. And because of the one man who loved her.
Bessie died on March 14, 1951, after a prolonged illness. Henry J. married the nurse who had cared for her (reportedly with his wife’s blessing) on April 10, 1951. Henry J. died on August 24, 1967, at the age of 85 in Honolulu.
Note to the Reader: This article is largely sourced from the Wikipedia entry on Henry J. Kaiser, expanded where appropriate by the credited entries.
This article is for informational purposes only and is not intended as professional advice. Klarise Yahya is not a financial planner. Nothing in this article is presented as investment guidance. For specific circumstances, please contact an appropriately licensed professional. Klarise Yahya is a Commercial Mortgage Broker specializing in difficult-to-place mortgages for any kind of property. If you are thinking of refinancing or purchasing real estate, perhaps Klarise Yahya can help. For a complimentary mortgage analysis, please call her at (818) 414-7830 or email [email protected]. BRE: 00957107 – MLO: 249261