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HMO-Based Practice

Lucinda Romero, MD FACS
The Permanente Medical Group
Department of Surgery
401 Bicentennial Way
Santa Rosa, CA 95403


My personal experiences with an HMO system are discussed, but you are encouraged to visit the website in order to appreciate the big picture of the original Health Maintenance Organization (HMO) and to see what career opportunities are presently available.

In Colorado

I started working for the Colorado Permanente Medical Group (CPMG) in 1996. I had been working as an associate for a solo practitioner in Boulder and wanted to leave that practice, but remain in Boulder. Fortunately, making the move to work for CPMG where the only patients treated were within the HMO was not perceived as being in direct competition with my former employer, so the legal hassle of the “noncompete clause” was avoided.

In Colorado, the hospital for the HMO was community-based. In California, the hospital was owned and operated by the Kaiser system. Kaiser has found that owning and operating its own hospitals is more cost efficient.

Over time it became clear that more than two CPMG surgeons were needed. Basically, making hospital rounds every other weekend was tiring. CPMG agreed to hire another surgeon, but not before the personal decision had been made to move to California.

The positive aspects of working for CPMG were:

  • Contracting with an excellent community hospital that included strong radiology and emergency medical groups. The hospital managed to stay well staffed and had enough operating rooms available for the volume. At one point availability became tight and within a couple of years, more operating rooms were made available.
  • Computerized patient records. Kaiser is quite advanced in terms of information technology. Colorado was the first region to implement computerized medical records. A computer terminal was available at my desk, in every exam room and in the minor surgery suite. This system provides easy access to enormous amounts of clinical information.
  • An HMO can be an ideal system for physicians that enjoy clinical research and Kaiser supports many clinical research projects annually.
  • Support for further education is available. For example, CPMG paid for me to learn medical acupuncture and allowed the use of acupuncture in the clinic. The opportunities for educational leave vary by system. In Colorado, a sabbatical of 1 to 2 months is offered for every five years of service.

In California

It is pretty easy to move from one Kaiser facility to another. For any physician job available, applicants coming from the Kaiser system are given priority. I had worked in Colorado long enough to have become a shareholder, so I was eligible to become a shareholder after only one year after moving to Santa Rosa. Being a shareholder entitles the physician, among other things, to receive an end of the year bonus (provided the medical group has made a profit). Note the health plan is a non-profit organization while the medical group, which Kaiser has an exclusive agreement with, is for profit. The medical group, which includes all of Northern California, is The Permanente Medical Group (TPMG).


Physician’s salaries are partly determined by the reported income from private practitioners within the given community. A top baseline salary for a senior surgeon would equal 80% of the reported surgeon income for the same community. Pay can increase somewhat by taking more call or working after hours. In my case, I always have plenty of after hour time and can choose to be compensated with pay or time off.

An educational fund of $1,500 is available annually to cover meeting expenses, books, etc. The educational fund cannot be used for travel. The entire fund is at the physician’s discretion.

Licensing fees, exam fees, DEA registration, malpractice, and society dues are paid by TPMG.

The retirement benefits are excellent and seminars with professional financial consultants available. TPMG also has a loan program for first time homebuyers in California. TPMG provided up to 10% of the purchase price (maximum of $1,000,000) of a home interest free for 10 years at which time the loan is due.

Typical Work Week

  • Surgery one day per week
  • Clinic 4 days per week.
  • Call 1 out of 5 to 6 days.
  • On call days, patients are not scheduled unless the physician schedules them.
  • The call surgeon reviews all consults within the computer referral system and triages them for nurses to call and make appointments.
  • Call can be taken call from home, but cannot be more than 30 minutes away (not a trauma hospital).
  • A wide variety of general and vascular surgery exists. The group consists of five general surgeons, one other general surgeon who also does vascular, and one board-certified vascular surgeon.

Summary of the Positive Aspects

Being a Kaiser physician is satisfying for many reasons:

  • The group is large enough so that call is rarely more than once a week or every fifth weekend.
  • Office management, billing and collections are managed for the physician.
  • Having the choice of additional time off or additional pay in compensation for overtime.
  • Assistance in purchasing a home. I actually live within 30 minutes of the hospital on 15 acres of rolling pasture with three mares and two colts.
  • Benefits can be retained when working as little as 60% of full time.
  • The physician has the freedom to take care of patients, as the physician thinks is best. Our Executive Medical Director, Robbie Pearl, has stated Kaiser members will be cared for as we would like our own family members to be cared for.

As for the Negative Aspects

  • The facility in Santa Rosa is too small and will not be expanded for at least five or more years. Only four operating rooms exist. There is no interventional radiology suite nor interventional radiologist. The ICU is too small and can limit the ability to schedule certain cases (eg, aortic surgery). These are all frustrating issues that are encountered on a daily basis. These issues should be improved on over time, but it seems to take longer in this system than it would in the private sector.
  • Unlike a fee for service system, there is no great monetary reward for working more or harder within the HMO system.
  • HMOs are bureaucratic systems so there are additional procedural trainings, internal regulations, etc., which are necessary to structure such a large system. All the physicians have to be brought up to speed when changes are made.
  • Physicians do not have a personal nurse or office assistant, although administrators have designated assistants.