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Why Kaiser Permanente's Business Model is so successful?

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Kaiser Permanente’s Company Overview

Kaiser Permanente is a leading integrated managed care consortium, established in 1945 by industrialist Henry J. Kaiser and physician Sidney Garfield. Headquartered in Oakland, California, the company is dedicated to improving the health of its members and the communities it serves. Kaiser Permanente provides a full range of services including preventive care, well-baby and prenatal care, immunizations, emergency care, and more. It operates in eight states and the District of Columbia, serving over 12.4 million health plan members through its network of 39 hospitals and nearly 700 medical offices. The company is renowned for its commitment to medical research, education, and the promotion of health policies that improve the health of all Americans. Business Model: Kaiser Permanente operates on an integrated care model, uniting hospitals, clinics, and health plans under one umbrella organization. This allows for a more coordinated approach to healthcare, with physicians, specialists, and care teams working together to provide comprehensive care to members. Kaiser Permanente's model also emphasizes preventive care, with a strong focus on regular check-ups, screenings, and wellness programs. This approach not only leads to better health outcomes but also helps to reduce healthcare costs by catching potential health issues early before they become more serious and expensive to treat. Revenue Model: Kaiser Permanente's primary source of revenue is through its health plan memberships. Members pay a monthly premium for access to Kaiser Permanente's integrated healthcare services. The premium rates vary depending on the plan chosen by the member and the coverage it provides. Kaiser Permanente also generates revenue through its hospitals and medical offices by providing medical services to its members. Furthermore, the company benefits from government funding for Medicaid and Medicare services. This diversified revenue stream allows the company to invest in infrastructure, medical research, and technology to provide high-quality care to its members.

Country: California

Foundations date: 1945

Type: Nonprofit

Sector: Healthcare

Categories: Health

Kaiser Permanente’s Customer Needs

Social impact:

Life changing: affiliation/belonging

Emotional: wellness, therapeutic value, provides access

Functional: integrates, connects, informs, quality

Kaiser Permanente’s Related Competitors

Kaiser Permanente’s Business Operations

Corporate innovation:

Innovation is the outcome of collaborative creativity in turning an idea into a feasible concept, accompanied by a collaborative effort to bring that concept to life as a product, service, or process improvement. The digital era has created an environment conducive to business model innovation since technology has transformed how businesses operate and provide services to consumers.

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Data as a Service (DaaS):

Data as a Service (DaaS) is a relative of Software as a Service in computing (SaaS). As with other members of the as a service (aaS) family, DaaS is based on the idea that the product (in this instance, data) may be delivered to the user on-demand independent of the provider's geographic or organizational isolation from the customer. Additionally, with the advent[when?] of service-oriented architecture (SOA), the platform on which the data sits has become unimportant. This progression paved the way for the relatively recent new idea of DaaS to arise.

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.


A business ecosystem is a collection of related entities ? suppliers, distributors, customers, rivals, and government agencies ? collaborating and providing a particular product or service. The concept is that each entity in the ecosystem influences and is impacted by the others, resulting in an ever-changing connection. Therefore, each entity must be adaptive and flexible to live, much like a biological ecosystem. These connections are often backed by a shared technical platform and are based on the flow of information, resources, and artifacts in the software ecosystem.


Disrupts by offering a better understanding that customers are willing to pay for. Experience companies that have progressed may begin charging for the value of the transformation that an experience provides. An experienced company charges for the feelings consumers get as a result of their interaction with it.


The prevention, treatment, and management of disease and maintaining mental and physical well-being via the medical and allied health professionals' services. It includes diagnostic, preventative, remedial, and therapeutic service providers such as physicians, nurses, hospitals, and other private, public, and volunteer organizations. Additionally, it comprises producers of medical equipment and pharmaceuticals, as well as health insurance companies.

Market research:

Market research is any systematic attempt to collect data about target markets or consumers. It is a critical aspect of corporate strategy. While the terms marketing research and market research are frequently used interchangeably, experienced practitioners may want to distinguish between the two, noting that marketing research is concerned with marketing processes. In contrast, market research is concerned with markets. Market research is a critical component of sustaining a competitive edge over rivals.


Subscription business models are built on the concept of providing a product or service in exchange for recurring subscription income on a monthly or annual basis. As a result, they place a higher premium on client retention than on customer acquisition. Subscription business models, in essence, concentrate on revenue generation in such a manner that a single client makes repeated payments for extended access to a product or service. Cable television, internet providers, software suppliers, websites (e.g., blogs), business solutions providers, and financial services companies utilize this approach, as do conventional newspapers, periodicals, and academic publications.

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