Kaiser Permanente (KP) PESTEL Analysis
Kaiser Permanente (KP) is an American managed care organization that was founded in 1945. KP has its headquarters in Oakland, California with operations spread throughout eight states in the US. As of 2020, KP runs three divisions. The divisions are Kaiser Foundation Health Plan, Kaiser foundation hospitals, and the KP regional medical groups.
PESTEL Analysis
A Pestel analysis is Important as it allows businesses to monitor the external environment and consequently mitigate threats and leverage opportunities (Rothaermel, 2018).
Political
The political aspect of the Pestel analysis refers to government regulations and laws that regulate the industry of a business organization. Various federal regulations regulate the managed healthcare industry in the US, for instance, the Affordable Healthcare Act. In recent times, the Federal government has removed specific provisions from the ACA. Moreover, there have been calls to abolish the ACA. If the act is repealed, KP would have to increase the cost of its premiums to cover losses. Unfortunately, not many Americans would not be able to afford the new premiums which would translate into a loss of customers for KP.
Economic factors
The economic element of the Pestel analysis deals with factors involving the economy. Such factors include inflation rates, unemployment and recession, among others. Amid the Corona Virus pandemic, many businesses have closed, and unemployment numbers in the US are on the rise. Consequently, most members with commercial insurance are moving to Medicaid and ACA plans which translates to losses for the KP.
Social-cultural
Socialcultural factors include society’s values, norms and culture and how these impact on the firms’ operations. The retirement of the baby boomer has presented an opportunity for the managed care industry to develop care plans for this demographic group. With the dawn of the OVID-19, which puts these group at the highest risk of infection, KP has had to make accommodations to its plans to cover screening and admission costs for COVID-19 patients.
Technology
Technological factors refers to the influence of technological advancements on the behaviour of firms
The COVID-19 pandemic has resulted in a growth in demand for telemedicine services. Consequently, this is an opportunity that KP should leverage to stay relevant and as part of Corporate Social Responsibility. Moreover, projections in the past years have shown that the healthcare industry is likely to adopt the use of A.I and machine learning especially in hospitals for diagnosis and also in the manufacture of drugs. KP can adopt these technologies in its hospitals to increase efficiency and save on labor costs.
Ecological
Ecological factors include environmental issues like global warming and sustainable economic growth among others. The healthcare industry is one of the highest consumers of energy in hospitals and in the manufacture of pharmaceuticals. Consequently, the industry is also a major contributor of greenhouse emissions. Organizations in healthcare industries have a corporate social responsibility to participate in environmental conservation efforts. KP has set several goals aimed at environmental conservation to be achieved by 2025. For instance, KP has set measures to be carbon net positive and to buy food from sustainable producers.
Legal
Legal factors are closely related to the political factors and include court rulings and decisions made by tribunals (Roathermel, 2019). Healthcare organizations in the US also face various legal challenges. For instance, in 2014, KP was used by the DHMC for allegedly blocking access of mental health access by making patients wait for long periods in between payments. The case resulted onto a $ 4 million for KP.