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Kaiser Permanente announces huge expansion in Baltimore region, with plans for 10 new facilities

Kaiser Permanente announced plans Tuesday a big expansion the Baltimore market as the health insurer triples the number of health care centers in the area and add tens of thousands of new patients in the next decade.

Kaiser said it would invest and spend a combined $13 billion by 2028 to increase the number of Kaiser centers in the Baltimore region to 15 from 5 in an effort to expand coverage to an estimated 200,000 people from about 64,000 today.


“Kaiser Permenante is a health system, not just an insurer,” said Gracelyn McDermott, executive director of account management for Kaiser. “Our strength is in our integrated model, our coordinated care. Our physicians and providers work together to treat members. ... It’s really about providing easier access to care not only where people live and work, and that access is what is going to drive member growth.”

The insurer operates differently than other carriers in that it runs its own medical centers, employing hundreds of medical and other staff at each center, and providing primary and specialty services directly to patients in an effort to coordinate care and control costs.


Already a dominant carrier in the Washington suburbs, Kaiser has been growing aggressively nationwide and aims to expand its share of the Baltimore market, which is served predominantly by insurer CareFirst Blue Cross BlueShield.

Kaiser first came to the region in 1980 and has been growing steadily. For example, it announced in April it would open a new $247 million medical center in Timonium in the next two years with primary care, urgent care, pharmacy services, surgery and specialty care such as audiology, optometry and pain management.

Other centers opened in Anne Arundel and Harford counties and Baltimore City in recent years. Kaiser expects to open new centers Columbia, Odenton, Owings Mills, White Marsh and Baltimore, among other locations, though sites have not yet been chosen.

Jonathan Weiner, professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health, said taken together the Baltimore-Washington area is Kaiser’s third biggest market, though it’s a distant third. The expansion could have a big impact.

“I believe the Mid-Atlantic region, and especially Metro Baltimore, is being robustly targeted for further growth," he said.

“After studying them for over 30 years, I can say unequivocally, this is a good thing for local patients, the economy and the health care system at-large,” Weiner said. “Given how successful [Kaiser] has been in terms of achieving great care for modest costs, perhaps they will also shake things up a bit when it comes to other local health plans or delivery systems.”

An issue, he said, is that Kaiser hasn’t been so successful in attracting patient outside of California. That could be because new patients don’t like the more limited choice of providers offered at Kaiser centers or contractors, compared with a wide network of providers allowed by popular preferred provider organization, or PPO, insurance plans.

Kaiser patients, for example, can’t always tap services from the region’s renowned specialists at Johns Hopkins or University of Maryland Medical Center.


Anthony T. Lo Sasso, an economics professor at DePaul University in Chicago, agreed that the limits on doctors can put off consumers who value choice, but just having a bigger footprint could induce enrollment.

Mostly, he sees the move as a “full frontal assault on CareFirst,” with the local economy benefiting from the investment in new facilities.

“For consumers, it might mean lower prices, but often in healthcare markets you see providers competing on quality, or perceived quality,” he said. “Under this ‘medical arms race’ hypothesis, cost, and prices, grow in the effort to woo new customers. So the bottom line is that I would think of this primarily as an effort to grab customers from CareFirst.”

CareFirst officials said they were reviewing Kaiser’s announcement.

Kaiser officials say, however, more all-in-one centers can increase the availability of services for the region and could improve health and reduce hospitalizations by increasing preventive care and ensuring maintenance of care for chronic conditions.

In addition to the 13 new medical centers, Kaiser also will maintain two multi-specialty medical hubs. One is open in Halthorpe and the second will be included in the center in Timonium.

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Kaiser operates far more centers in the Washington area. The nonprofit California-based insurer already covers more than 430,000 people in Maryland. Kaiser serves about 12.3 million people in eight states and Washington, D.C.

A report conducted by the Sage Policy Group for Kaiser that also was released Tuesday found that Kaiser’s expansion could more than triple its annual operating expenditures to $1.8 billion by 2028. It also could add 19,000 jobs in the region’s economy, bringing its overall employment impact to 26,000 jobs, Sage found. Those jobs include those Kaiser employs, those who work at its partners and suppliers, and other jobs created by its and its employees’ spending.

“Kaiser Permanente’s unique model of health care delivery outperforms the majority of the marketplace, and when you apply that high level of care to the new members it will be able to reach, residents, businesses and the community have much to gain in terms of economic growth and overall health,” said Anirban Basu, Sage’s chairman and CEO, in a statement.

Al Redmer Jr., Maryland insurance commissioner, said the expansion would be good for individuals and businesses in the state because they would have more choices of plans. It’s possible that more people would buy insurance if they found more plans they liked and were affordable.

The state’s uninsured rate dropped in half to about 6 percent in the years since the federal Affordable Care Act was enacted. Kaiser and CareFirst are the only two carriers to offer their plans on the state health exchange, which is where those without workplace insurance can buy coverage. There are more than a half dozen insurers offering plans to companies in Maryland, though CareFirst is the state’s dominant carrier.

The Maryland Insurance Administration approves insurance plans and their premiums, and officials have been in discussions with other insurers to enter, or reenter, the exchange-based insurance market in Maryland. Kaiser’s expansion could help generate more interest from those carriers and others, Redmer said, which would continue to improve the market.


“Any time you have more access instead of less, that in and of itself is a good thing,” Redmer said. “Having more competition than less, that’s a good thing.”