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Greater LA Service Area Summary

July 2016 Prepared by : Stephen Yen / INROADS Intern Summer 2016

Executive Summary

2© 2016 Kaiser Foundation Health Plan, Inc. For internal use

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Greater Los Angeles is comprised of four Kaiser Permanente service areas, located in Panorama City, Woodland Hills, Los Angeles and West Los Angeles. Each service area is serviced by a Medical Center and multiple Medical Office Buildings (MOBs). The goal of this report is to analyze, strategize, and identify the strengths, weaknesses, opportunities and threats of each service area within Greater Los Angeles as part of the plan to increase membership and retention rates, as well as prospecting for potential new clients. In addition to adhering to the mission statement of Kaiser Permanente which is to provide exceptional care and service to all members, this report seeks to identify Kaiser Permanente's competitive landscape and offer alternatives that efficiently and effectively utilize Kaiser Permanente’s resources.

This report will rely on statistical data (both Kaiser Permanente’s and its competitors), consumer-related information, and introspection to draw conclusions on Kaiser Permanente’s current landscape, as well as paving the way for the future. This analysis will be done individually for the four service areas, and then synthesized for Greater LA to provide an accurate picture of Kaiser Permanente’s current standing in the Greater LA market.

Greater Los Angeles – Regional Overview

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Greater Los Angeles

• 5 Medical Centers• Combined Membership: 1,100,000• APML: 5• Physician Ambassadors: 9• Executive Ambassadors: 11

Source: Greater LA KP Marketing Deck

Greater Los Angeles – SWOT Analysis

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StrengthsInnovative Culture

Technology

Greater LA Management & Project Team –Dedicated Resources

Ambassador Program

Ability to cover larger geographic area and provide consistency within that area to

clients and brokers

WeaknessesLarge structure does not allow for nimble

decision making

New GLA team members not familiar with products or processes

Inconsistency in council development levels and participation

OpportunitiesInnovation

New facilities/Expansion

Employ focused strategies across Greater LA Service Area (e.g. flu shots)

New GLA team members providing energy and enthuisiasm

ThreatsIntense Competition

Substitute Products

Greater Los Angeles – Membership by Service Area

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26

19

24

20

43

54

20

90

31

15

58

89

26

40

22

20

57

80

21

1,4

82

15

66

33

27

15

46

21

02

22

21

9,2

28

16

03

57

29

67

20

22

55

08

23

8,4

83

17

23

52

L A W L A P A N C I T Y W O O D L A N D H I L L S

MEMBERSHIPS BY SERVICE AREA - GLA

2012 2013 2014 2015

Observations:

- Membership have been increasing gradually post ACA years.

- Biggest growths locate in Panorama City and Los Angeles service areas.

- Not Included is Antelope Valley, which falls under Panorama city, although it contracts its own medical center and serves its own client base.

- Based on current growth trends, forecast for future growths appear positive.

Source: KP Marketing Deck (All regions)

Greater Los Angeles – Population Diversity

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27%

9%

15%

48%

1%

Greater Los Angeles Demography - 2016

Caucasian

African American

Asian

Hispanic

Others

Other Misc. Key Stats: - Median Household income of $55,870 (2014

dollars)- 18.7% in poverty- Mean travel time to work (minutes) – 29.6

Source: U.S. Census 2010

Source: U.S. Census 2010

Greater Los Angeles – Key Competitors Grid/ Market share

7

Total enrollment

Individual enrollment

Large group enrollment

Small group enrollment

Source: California Health Care Foundation

Source: California Health Care Foundation Source: California Health Care Foundation

Source: California Health Care Foundation

© 2016 Kaiser Foundation Health Plan, Inc. For internal use only.

Greater Los Angeles – Comparison by Service Areas/General Info

8© 2016 Kaiser Foundation Health Plan, Inc. For internal use

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Los Angeles- Positive net migration, due to increasing job

opportunities and decline in UE rate - Predominately Hispanic, then white, Asian, African

American and others. - Most populous service area- Weakness: diversified neighborhoods, cultural

differences; Vivity

Panorama City- Positive net migration due to housing projects. - Predominately Hispanic, then white, Asian, African

American, and others. - Biggest service area (by area), including the addition

of AV area under Pan City- Weakness: commercial contracts

West Los Angeles- Positive net migration, due to development of High-

tech areas and entrance of big firms; also commuters- Predominately Hispanic, but Whites is close,

followed by African Americans, Asians and others. - Severe gentrification and separation of communities.- Weakness: many competitors; Vivity

Woodland Hills- Negative net migration, possibly due to lack of

opportunities and high standard of living- Predominately white, followed by Hispanics, Asians,

blacks and other. - Geographically divided between Ventura and

Woodland Hills- Weakness: distance between communities

Greater Los Angeles – Hospitals Competitor List

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The following hospitals are Kaiser Permanente’s main competitors in the GLA area.

Cedars-Sinai Medical Center

Keck Medical Center of USC

UCLA Medical Center

UC IrvineMedical Group

Huntington Memorial Hospital

Providence/St. Johns Health Center

Aetna X X

Anthem - BlueCross

X X X X X X

Blue Shield X X X X X X

Cigna X X X X X

Humana X X

Health Net X X X X X X

United Health Care

X X X X

KP X

Greater Los Angeles – The Vivity Problem?

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Vivity is an integrated network of seven high-value health systems in Southern California carried out by Anthem Blue Cross. Anthem seeks to create its own “Fully Integrated Network” in order to compete with Kaiser Permanente for the HMO contracts. Its main allure is its arsenal of high-profile hospitals, such as UCLA and Cedars-Sinai, in its product portfolio, and its price point. So far, its biggest client have been CalPERS when it launched in 2015, and it tripled Anthem’s HMO membership with the contract. In addition, Torrance and MemorialCarevoluntarily put their employees into Vivity. Vivity is gaining traction and by utilizing the prestigious name and lower prices, it is on its way to potentially cut into Kaiser Permanente’s HMO market share.

The rise of Vivity is not to be taken lightly. It is the only major player in SCAL with the capability to directly challenge Kaiser Permanente’s HMO membership base. However, there are several weaknesses in this system which Kaiser Permanente can utilize to their advantage, they are:

- Vivity’s lack of IT integration- Difference in quality of service between hospitals- Still behind in KP when it comes to clinician referrals.- Subpar tele-medicine/virtual physician offerings. - Questionable collaboration: since hospitals compete outside of Vivity

Greater Los Angeles – Key opportunities

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Objectives:

- To successfully propose and install KP’s value proposition and integrated care in its new and existing clients. - To capture new members, new business segments, while maintaining its current membership base. - Ability to identify and vet potential customers to see if they are a fit with Kaiser Permanente’s mission and

vision- DRIVE REVENUE; and capture greater market shares across SCAL.- Build on top of our “Thrive” campaign; erase the old sentiment of Kaiser’s lack of technology and innovation to

keep up with the industry

Key Opportunities

- Bringing healthcare to minorities, elderly, people that cannot afford healthcare easily prior to ACA- Promoting total health, continuous involvement of its patient’s health; positive involvement that leads to good

word-of-mouth referrals. - Accurate pricing that aligns with KP’s offerings and value proposition, but still able for individuals to utilize

Health Insurance Marketplace to purchase KP’s plans- Experience KP and KPConnect- High uninsured rate – public outreach to the uninsured population

Greater Los Angeles – Recommendations (Region wide)

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Here are the suggested actions; based on the overlapping trends observed across all of GLA’s service areas:

- It has been proven that Customer Service is key, especially in health care industry. Allocating a segment in the business with

the sole purpose of offering continuous customer service in many languages is vital. The group must be able to answer

questions from facilities to elementary health prevention, to health care plans, pricing, and offerings.

- More engagement on the grassroots/community level. Increase visibility by actively sponsoring and participating in events

that represents the “Thrive” campaign. (Collaboration with Public Affairs to receive funding, and collaborate with external

companies to increase visibility?)

- Conduct active surveys to gauge the patient feedback and interest of Kaiser Permanente and its offerings; this will offer us a

clearer insight of our pricing model and adjust accordingly to our competitors.

- Direct outreach to small businesses and individuals, since they are segments where it is PPO-dominant or price-averse. Sell

with the KP value proposition.

- Market with the idea of commitment to quality and cultural diversity, perhaps with segments of different ethnicities taking

care of patients of similar backgrounds in a Kaiser facility, to focus on cultural hegemony and quality.