Kaiser Permanente

Kaiser Permanente



Kaiser Permanente is one of the nation’s largest not-for-profit health plans. Kaiser’s national structure is made up of two types of organizations: Kaiser Foundation Health Plans (KFHP) and Permanente Medical Groups. Kaiser Foundation Health Plans works with employers, employees, and members to offer prepaid health insurance plans. They serve about 11.8 million members. Permanente Medical Groups are physician-owned organizations that provide medical care for Kaiser Foundation Health Plan members in each respective region. They have about 60,000 nurses and 30,000 physicians.  Kaiser Permanente has a forty percent share of California’s health insurance market for employers and individuals.Their growth is about eight to nine percent every year. Their revenue is currently at about $70 billion and and they plan to be at $100 billion within the next 5 years.They are in the process of building a medical school.   




Kaiser Permanente believes that innovation happens at the very ground level inside a company i.e. from everywhere, by anyone, at any time. In the past, the company had an innovation department but realized it didn’t work out well. Clearly, it is the people working with the products and the customers on a day to day basis that is most likely to realize the gaps and needs for changes and improvement.

The company constantly strives for innovation and does therefore strongly encourage their employees to share their thoughts and ideas internally. Indeed, they strives to make it easy for the employees to forward ideas via their boss or manager. Furthermore, Kaiser Permanente motivates their employees by having awards such as “the best internal idea of the year”.

Kaiser Permanente´s key tips when it comes to innovation and project input: (Process)

  • Know your project metrics and make them available for anyone. For Kaiser Permanente, what decides if a project should go into project is if: (1) the project increase customer value (outcome) and (2) if it reduces cost.
  • Motivate your employees to stay innovative and reward them.
  • Be efficient and productive. Before starting a new project, share the idea internally in order to find out if some kind of research has been done already “someone might have the same idea as you do”.
  • Don’t give up easily.
  • Risks is worth the chance but do a lot of research before you make your decision.
  • Dev teams are grouped by region. They operate interdependently. Some decisions are made at the team level, some are made at the National level. Innovation happens mostly internally with ‘internal funding mechanisms’. Everybody is welcome to share ideas. For example, an accountant won the contest for building the best flu season prediction algorithm.
  • Company is focused on two things: Its benchmarks (patient outcomes, and cost of care), and well as strengthening its vertical integration in the healthcare industry.



Kaiser Permanente, as a non-profit organization, had two very clear measures when looking at output and results for their projects and products. They mentioned they measure success based on two metrics:

  • Improve patient outcomes.
  • Reduce Cost.

Any initiative or new idea can be tested against those two factors and if they are meeting the goal of improving customer satisfaction and reducing the cost then the idea is working. Therefore, any outcome of their projects are measured against these two clear and simple metrics. Also, the purpose of having two measures of success is for the whole company to align and create a clear and simple goal of each project started and/or implemented. More, to measure the customer satisfaction, they analyze data for measurement in addition to direct interact with the clients.