Will Kaiser Permanente Take the Market in California?

The short answer is “YES!” But it won’t happen overnight. Kaiser Permanente prides itself in playing the role of the tortoise…slow and steady wins the race. Efficiency and quality of care are on their side, but their model and their philosophy limits fast growth.

Kaiser Permanente is going to win the race eventually because of two main factors:

  • Efficiency
  • Quality of Care

How Kaiser Will Become the Largest Provider in California

When Health Care Reform was enacted and later implemented, Kaiser Permanente didn’t break a sweat. 80% of premiums must go toward health care costs. Kaiser Permanente was already there.

Kaiser Permanente’s integrated system, their electronic medical records, their streamlined procedures, and their low payout to brokers are all working together to allow California’s giant HMO to offer some of the most affordable prices and the highest quality of care in the state through their Covered California Kaiser plans.

So what could slow them down from just taking the market in California?

The Integrated Model Requires Slow Growth

For other carriers to grow, they simply need to get contracts with more doctors and hospitals. But for Kaiser Permanente, the health plan, the physicians and the hospitals are all integrated into one system.

To expand, Kaiser Permanente has to build more hospitals. That means purchasing land, hiring contractors, getting permits, building, remodeling, landscaping, and more.

Kaiser also has to hire and train more medical staff. That means advertising positions, doing interviews, training and more.

So, despite the fact that Kaiser Permanente can be very competitive on quality of care and price, they have to be careful not to price themselves too low because they couldn’t handle the influx of too many new members.

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