On Tuesday, July 30, Montage Health's CEO Stephen Packer told an audience at a Monterey Peninsula Chamber of Commerce breakfast that Kaiser Permanente, one of the country's biggest health care systems, would be in Monterey County within a year or two, bringing competition to Montage, as well as Natividad and Salinas Valley Health.
Two days later, on Thursday, Aug. 1, Kaiser made the official announcement: The company will begin offering health care services in the Salinas area and Northern Monterey County beginning in January 2025.
"Responding to demand in the community, enrollment in Kaiser Permanente's commercial health plan for 2025 will be available later this summer," according to the press release.
The not-for-profit company, which serves 12.6 million members nationwide, will open a medical office in January at the Boronda Crossing shopping center, 1930 N. Davis Road, in Salinas.
Hospital care will be through Watsonville Community Hospital, just over 20 miles away in Santa Cruz County.
(By comparison, Natividad, the County of Monterey's hospital, is around four miles away and Salinas Valley Health is five-and-a-half miles from Kaiser's clinic.)
Kaiser officials said members will have access to services that include primary and specialty care, pediatrics, obstetrics and gynecology, mental health care, laboratory services, radiology and pharmacy services.
The announcement came with a quote from Salinas Mayor Kimbley Craig, who said the city was "excited at the opportunity for people in Salinas to have more meaningful health care options in our community. The opening of Kaiser Permanente in Salinas will certainly benefit not just our residents, but all of Monterey County."
In his remarks on Tuesday, Packer focused on the word "member," pointing out that Kaiser is a closed model, able to take select patients who become members of the system.
Montage Health's Community Hospital of the Monterey Peninsula takes everyone, he said, including people on Medicare and Medi-Cal, the state's version of Medicaid. CHOMP and Montage Medical Group also take people with no insurance.
The result, he said, is that Kaiser will be able to take healthier patients in less need of services, filtering patients with greater needs to other hospitals, creating greater financial pressure on those hospitals.
He also contrasted Montage to Kaiser, saying Montage is "locally owned, locally operated and locally governed," whereas Kaiser is a large corporation operating out of its headquarters in Oakland.
Packer acknowledged that CHOMP is one of the highest priced hospitals in the state (as are Natividad and SVH), but argued in part it's because of the high number of residents on Medicare and Medi-Cal, making the hospitals dependent on government reimbursement, which is usually less than the actual costs. High labor costs also contribute the cost of care.
Packer said if they could pick up CHOMP and move it to the San Francisco Bay Area, where there are more patients with commercial insurance, their costs would reduce by 26 percent.
Critics of the local hospitals have argued that it's a lack of competition that has driven health care costs in the county.
Kaiser's path to Monterey County has been a lengthy one. The system became a partner with Watsonville Community Hospital in 2017, and was the largest private donor to rescue the hospital when it was in danger of closure in 2022 with a $7.5 million gift. Also since 2022, the company has been making contributions to nonprofits in Monterey County.
According to previous reporting in the Weekly, Kaiser officials approached all four of Monterey County's hospitals in 2021 asking if they'd accept Kaiser's insurance. All four rejected the request.
Kaiser submitted a building plan to the City of Salinas almost a year ago for the Boronda Crossing location, and the permit was approved on Dec. 20, and construction has been underway since then.
Kaiser received approval from the California Department of Managed Health Care on Thursday, Aug. 1, prompting today's public announcement about the opening timeline.
The company may also be looking at opening a second clinic, possibly in Marina, sources told the Weekly in January.
(1) comment
On the Medicare Advantage side of services, Aspire had a monopoly from its inception (which was many years after Medicare Advantage plans came into existence) until two years ago. Medicare.gov now lists two companies (Aspire and Imperial) servicing Monterey County. However, though Imperial has dozens of local doctors listed as Primary Care Providers), they currently do not have an in-network local hospital, requiring its members to travel to Hollister for scheduled hospital services. Perhaps Kaiser will also include its Medicare Advantage plans in their mix of offerings, but again it appears it will require patients to travel to Watsonville for scheduled hospital services. Perhaps CHOMP, SVH and Natividad will broaden their scope of accepted Medicare Advantage plans, though this likely will take some serious lobbying efforts.
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