Dr. Robert Pearl, newly elected as CEO in 1999, faced a massive new challenge: saving Kaiser Permanente from imminent bankruptcy. From 1999 to 2017, Dr. Pearl transformed Kaiser Permanente from a dysfunctional organization to one of the largest and most lauded in the U.S. Dr. Pearl strategically shifted the organization from the lowest-cost provider to one with superior quality and service at a competitive price. He achieved this goal by applying an "art to science" approach to drive down operational costs and persuading otherwise reticent doctors.

This case continues the story of Dr. Robert Pearl, who had guided the Permanente Group of Northern California through challenging years in the health care industry. While Kaiser Permanente had a long history and well-established reputation on the West Coast, creating a profitable health care system in the mid-Atlantic region proved difficult for a number of reasons. For one, Kaiser Permanente had not made a mindful transfer of the history, culture, and mission from Northern California to the operations of its Kaiser Permanente Mid-Atlantic States. And market dynamics were different on the East Coast, making it difficult for Kaiser Permanente to compete on its core strength: care delivery. To address these problems, Dr. Pearl dispatched seasoned physician leaders from Northern California, assigning them help transform the mid-Atlantic operations. He focused on a strategic and operational plan to provide 15 to 20 percent better quality and service and 10 percent lower price compared to the competition, and on recruiting dedicated primary care physicians willing to be more flexible about their scheduling and the specific hours they worked.