Sidney R. Garfield was born on April 17, 1906, the child of Russian Jewish immigrants who had made their way to America in the early twentieth century. He became a doctor, borrowed money to build a hospital in one of the most remote corners of Southern California, and found that fee-for-service medicine in the desert was financially untenable. His solution — charging workers a fixed daily rate for comprehensive medical care — became the model for the prepaid group practice that transformed American healthcare. When he died on December 29, 1984, Kaiser Permanente served millions of members and was the country's largest nonprofit HMO. The idea that made it possible had been developed in a six-bed facility near Desert Center, California, serving workers who were paid less than five dollars a day.
Garfield opened his Contractor's General Hospital in 1933 near Desert Center in the Mojave Desert, positioned to serve the tens of thousands of workers building the Colorado River Aqueduct for the Metropolitan Water District of Southern California. The project was one of the New Deal's great infrastructure undertakings — a 242-mile aqueduct that would carry Colorado River water to Los Angeles and the coastal cities of Southern California. The workers laboring on it were doing dangerous, physically demanding work in conditions that generated injuries at a steady rate. Garfield's hospital, the only air-conditioned building between Los Angeles and Phoenix, was their nearest medical facility. He had 1,200 patients in his first year of operation.
The problem was financial. Workers would arrive for treatment and then fail to pay — not because of bad faith, but because the economics of Depression-era labor did not leave much room for unexpected medical bills. Garfield was treating patients he could not afford to treat under a fee-for-service model. The solution came through an arrangement with Industrial Indemnity Exchange, the workers' compensation insurer for the aqueduct project. The insurer would pay Garfield a fixed rate for accident and industrial injury care. Workers, for a nickel a day deducted from their wages, would receive all other medical services. The math worked. Ninety-five percent of the 5,000 workers on the project enrolled. Garfield's hospital became financially stable for the first time, and he had inadvertently invented the health maintenance organization.
When industrialist Henry J. Kaiser was building the Grand Coulee Dam in Washington state in the late 1930s, he encountered Garfield's model and brought him north to provide healthcare for those workers under the same prepayment arrangement. Kaiser's construction and manufacturing empire expanded enormously during World War II — he built Liberty Ships in California shipyards at an extraordinary rate — and the worker healthcare model expanded with it. By the end of the war, Kaiser Permanente Medical Care Program was serving over 100,000 Kaiser employees and dependents. When Kaiser opened the program to the public in 1945, the model that Garfield had developed in a desert hospital became accessible to anyone who wanted to join. By 1990 it was the largest nonprofit HMO in the country.
California Historical Landmark No. 992 marks the site of Garfield's original desert hospital near Desert Center, honoring both the man and the idea. The landmark designation acknowledges that something genuinely important happened in this remote place — that the model for millions of people's healthcare was developed by a doctor who was trying to solve a cash flow problem in the Mojave Desert. Garfield continued working with Kaiser Permanente until his death, serving as a planner and visionary for the organization his desert experiment had created. He is not as famous as Kaiser himself, and the company bears Kaiser's name rather than his. But the prepaid group practice that defines Kaiser Permanente's model — the idea that healthcare works better when doctors are paid to keep people healthy rather than to treat them when sick — was Garfield's.
The site of Sidney Garfield's original hospital is at approximately 33.7135°N, 115.403°W near Desert Center, California, along Interstate 10 in Riverside County. California Historical Landmark No. 992 marks the location. The surrounding desert is flat and open, with the Chuckwalla Mountains visible to the south and the Pinto Mountains to the north. Thermal Airport (TRM) is approximately 35 miles to the west. Desert Center Airport is approximately 8 miles to the east.