Kaiser officials say they remain strongly committed to their traditional model of health care and will continue to offer it in tandem with the network option. As HMO enrollment rose dramatically over the past 15 years, HMOs that employ their own full-time medical staff or form exclusive alliances with physicians groups like Kaiser's lost more than half their market share. Nationally, Kaiser's market share has been eroding over the past several years, spokesman Daniel Danzig said. This year, Kaiser appears to have regained lost ground as it made its rates more competitive, Danzig said. In the mid-Atlantic region, Kaiser estimates that its market share declined in the early 1990s before rebounding somewhat over the past two years.
Some analysts lament the long-term trend.
Beyond patient preferences, another factor favoring virtual HMOs is their relatively low overhead. They can expand swiftly without investing in bricks and mortar. They've had to water down what they do and make a variety of concessions and changes in order to appeal to a broader cross section of the public. Amid an onslaught of price competition, some other differences between the nonprofit Kaiser and its commercial rivals have been blurring. Priding itself on the collegiality of its medical staff and a deeply ingrained professional culture, Kaiser historically refrained from using some of managed care's more controversial management techniques.