Kaiser Chief Shakes Up Division

In his first major move since taking the helm of Kaiser Permanente, George C. Halvorson has engineered an organizational restructuring that has effectively forced out the president of Kaiser’s California division.

Kaiser said Friday that Dick Pettingill, the HMO’s top operational executive in California since 1999, will be leaving at the end of this month. Kaiser said Pettingill resigned after Halvorson, the chairman and chief executive, decided to eliminate the California division and return to a structure of having a top manager in Southern California and one in the north.

Pettingill, who has been a prominent member of California’s health-care industry, helped to oversee Kaiser’s financial turnaround in recent years. But under his leadership, Kaiser’s image was bruised from a protracted battle with regulators over allegations that Kaiser did not assess or treat ill patients in a timely manner.

Kaiser spokeswoman Beverly Hayon declined to say whether that had anything to do with Pettingill’s departure.

In a statement, Halvorson lauded Pettingill for his leadership and major contributions. Pettingill made no statement through Kaiser, and he could not be reached for comment. Kaiser said the restructuring is intended to streamline operations and will not result in staff reductions.

Under the reorganization, Kaiser’s eight regions will report to headquarters in Oakland. Kaiser, the state’s largest HMO, has more than 6 million members in California and more than 2 million in eight other states.

Kaiser said Dr. Bill Gillespie, executive vice president for patient safety and clinical information systems, also has decided to leave the organization. Dr. Louise Liang, chairwoman of the Institute for Health Improvement, will replace him.

Earlier this month, Leon D. Crandall, president of Kaiser Permanente, announced he was leaving. But that was expected after Halvorson’s arrival in May.

Pettingill’s departure surprised observers. Pettingill, who joined Kaiser in 1995, was seen as a public face of the HMO in California. Although Kaiser has not clashed any more often with regulators than other HMOs, it has been in a long-running battle with the Department of Managed Health Care over a $1.1-million fine for alleged lapses in patient care. Kaiser has challenged the fine, and the case is pending.