Kaiser Permanente

Making it easier for consumers to shop for health plans

Kaiser Permanente, the $53B integrated healthcare system based in Oakland, CA., was founded over 60 years ago when industrialist Henry J. Kaiser partnered with Dr. Sidney Garfield, the physician who conceived, designed and created the first pre-pay, prevention-based clinical model in the U.S.  The original health maintenance organization, Kaiser Permanente built its storied organization around one health plan design – the HMO.

Around 2003, when the marketplace began to change and employer groups sought to consolidate their health plans, Kaiser Permanente began to develop, market and sell deductible health plans to its employer groups. KP launched its deductible health plans quickly without a product portfolio strategy or strategic approach to product naming. Consequently by 2007, it had over 300 health plan names in its portfolio yet only 130 of them were distinctively different plan designs. In fact, multiple names were used across the company to sell the same plan design. The confusion and waste was hurting sales, organizational morale and the KP brand.

Focus groups revealed health plan branding and communication was confusing across the entire health insurance industry. We spoke to brokers, benefits managers and consumers across the country, all of whom declared their frustration with how healthcare insurance companies approach product naming and their desire for a more intuitive and standardized industry naming system. All of this pointed to a huge opportunity for KP — create an intuitive, flexible and consumer-led health plan naming architecture that will be the best practice in the industry.

Our vision for solving the problem was fundamental — understand what consumers want and give it to them. To this end, we learned consumers shop for health insurance primarily based on cost. Brand preference was secondary,  even tertiary when choosing a health plan. Furthermore, when shopping for health plans, consumers wanted to easily and quickly understand the plan design with clear, descriptive and transparent communication. This critical insight gave us confidence KP could win with consumers if they empowered them with a simpler, more intuitive approach to health plan naming and communication. We also believed the best naming system should be inherently flexible given the dynamic nature of annual insurance rates.

The final solution we designed and KP approved was a numeric based “naming construct” created to organize and arrange the essential costs of each health plan design in an intuitive and standardized format — (Plan Type) followed by (Deductible) followed by (Co-pay) followed by important (Exceptions). What’s more, the naming construct was designed to be timeless and price agnostic, allowing for annual price fluctuation and rate changes without having to rename the plan every year.

Ultimately, our naming solution rationalized KP health plans portfolio from over 300 health plan names to just over 100, saving the company millions of dollars in related administrative and marketing costs. What’s more, satisfaction rose among key stakeholders including KP employees.