MMIT Payer Portrait: Kaiser Permanente

Kaiser Permanente, founded in 1945 as a consolidation effort between local hospitals in California and an insurance group for construction employees, has since become the largest integrated delivery network in the U.S. The company operates 39 hospitals,

employs more than 20,000 physicians in its medical groups and offers health insurance products in both the private and public sector markets. Kaiser’s seven regional managed care plans enroll more than 11 million lives in eight states plus the District of Columbia. The seven combined entities form the largest provider-sponsored insurer in the U.S., enrolling 29.5% of all provider-sponsored lives.

Kaiser operates its own pharmacy benefits manager and behavioral health unit, with MedImpact and OptumRx serving as secondary PBMs in some states, though this varies by product line. The company also operates Kaiser Permanente Specialty Pharmacy but contracts with other specialty pharmacies for select services.

While Kaiser offers plans across the spectrum of health insurance products, its Medicare Advantage (MA) segment is particularly notable, as Kaiser is the fourth-largest MA insurer in the U.S. and its plans consistently earn five stars in CMS’s annual Five-Star Quality Rating System. Its MA segment is not growing as quickly as those of other large insurers, however. From the third quarter of 2017 to the present, Kaiser’s MA enrollment grew just 14.5%, compared with UnitedHealthcare’s 54.1% and Humana Inc.’s 49.4%, according to AIS’s Directory of Health Plans (DHP).

DHP also identified Kaiser as one of the five payers whose commercial risk plans were most impacted by the COVID-19 pandemic, losing more than 100,000 lives from 2020. Financially, the company has weathered the storm (so far), posting $3.0 billion in net income for the second quarter of 2021, which Chief Financial Officer Kathy Lancaster attributed to “the stability of Kaiser Permanente’s integrated model, which provides both care and coverage.”

NOTE: Enrollment figures represent the sum of Kaiser’s seven regional managed care organizations, which are listed as separate entities in DHP.
SOURCE: AIS’s Directory of Health Plans as of 2Q 2021; MMIT Analytics as of 3Q 2021.