Choice at Heart of Kaiser, Pacific Venture : Health care: Deal with the Newport Beach insurer marks a new era of options for workers.

The alliance between Pacific Mutual Life Insurance Co. in Newport Beach and Kaiser Permanente’s California operations is aimed at giving both companies and their workers a streamlined health care service with options unheard of a decade ago.

The 2.2 million members of Kaiser Permanente of Southern California, for instance, would be able to go to the health maintenance organization for routine ailments like influenza and common injuries and, by paying standard deductibles, go to the doctors of their choice for the same or more serious illnesses.

Employers, meantime, won’t be faced with separate sales, administration and billing. The program, called Added Choice, will let each employer deal with only one representative and one set of policies and procedures.

Kaiser of Northern California will offer a different plan for its 2.6 million members by giving them the choice of joining the HMO or Pacific Mutual’s regular fee-for-service benefit plan, though members can switch once a year. The advantages to employers will be the same.

Pacific Mutual, the largest California-based life insurer, and Kaiser, the nation’s and the state’s largest HMO, hope to offer their combined plan to companies this spring.

The alliance marks the first time that Kaiser’s HMOs have allowed all of its California members to seek medical help from non-Kaiser doctors. A pilot program in Bakersfield has existed since 1987.

The venture with Pacific Mutual is a response to increasing demands for greater health care choices for employees and simplified billing and administration for employers. It is also a precursor to President Clinton’s health care reform proposals.

“Both Kaiser and Pacific Mutual face an increasing need for providing choices,” said Michael Berumen, senior vice president for marketing at Pacific Mutual’s group health and life insurance subsidiary.

“We both are very mindful of the need to offer a full range of managed care, and Kaiser is sort of the paradigm of managed care,” he said.

While the alliance is perhaps the biggest venture of its type, so-called point-of-service plans have been proliferating.

“Kaiser had no choice if they wanted to catch up with the rest of the marketplace,” said Bert B. Wagener, president of CIGNA Health Care of California, which has had a similar program operating since 1988.

Health Net in Woodland Hills, an HMO that Pacific Mutual tried to buy a few years ago, has been offering a similar plan for about two years. “It’s proven to be a tremendous success for us,” said Don Prial, a Health Net spokesman.

In California, Kaiser of Southern California is taking the bigger step. It will join with Pacific Mutual in offering a true point-of-service option.

Under the plan, HMO members can opt to see a doctor of their choice for any illness or treatment and be covered by a Pacific Mutual indemnity plan. The Pacific Mutual plan would be a typical group health plan covering most medical needs, Berumen said.

For Kaiser, the point-of-service plan will help to ease the fears some have about HMOs.

“We’ve discovered that it’s a good opportunity to give enrollees a way to test a managed-care system,” said Allan Mann, a spokesman for Kaiser of Southern California. “Employees feel more comfortable with prepaid medicine if they know they can opt for fee-for-service.”

The alliance also will give Kaiser the ability to cover companies that have some of their employees working and living outside the HMO’s service areas. And, since each company has its own working relationship with the Delta Dental HMO, each can offer dental coverage as well, Berumen said.