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Marketing Transit Services to Business (1998)

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Chapter 8 Kaiser Permanents ease Study This case study provides an overview of the ECHO Kaiser Permanente's marketing operations. Kaiser is the largest Health Maintenance Organization (HMO) in the United States. Although much larger in scale than transit agencies, Kaiser faces a similar task in marketing to business. Kaiser must sell employers on using its HMO and other health insurance options, and then in must sell employees who may have other choices besides Kaiser for health -c,-- - ~ Insurance. This chapter covers the history of Kaiser Permanente and the market conditions faced by the organization. There has been rapid change in the health care industry, and the last few years have seen tremendous growth in HMOs and in Point- of-service (POS) options for health care. The field is also quite competitive, which means that market research and marketing are crucial to Kaiser. Hi In response to this new level of competition, Kaiser has had to be more aggressive about costs, and has had to focus on developing a clearer and stronger marketing message to retain existing customers and to lure new ones. Kaiser also has responded by increasing the stature and role of marketing within the organization. Even more striking has been Kaiser's decision to explicitly link the marketing function with operations at the national and local levels, a common practice in product-oriented industries such as auto production, but an innovation in the service-oriented health care sector. Kaiser's general approach has been to handle most of its marketing and sales in house. It has developed a state-of-the-art of telemarketing operation, and it has used teams of Kaiser employees as its main marketing force. Recently, however, it has started to use brokers to help sell to smaller businesses. Kaiser has been collecting its own customer satisfaction information for many years. This program first focused on comparing different Kaiser Divisions and on measuring customer response to new Kaiser initiatives. Later on, the survey Pat S-]

K8IS~ P~Tla~ Gem ShUY also looked at key questions such as whether a customer would choose to repurchase Kaiser or whether they would recommend Kaiser to a friend. The survey also began to incorporate a random selection of non-users to better understand the outside perceptions of the organizations. More recently, Kaiser has started to consider the value of an independent firm to conduct customer satisfaction surveys, since findings from an independent source may have more credibility in the marketplace. Finally, Kaiser has been working to develop a brand image. The objective is to have a recognizable brand that people automatically associate with certain values, such as low-cost and high-quality health care. [~rIRit~Illllll~llllllI~!~lllill~,[~dllPlllUll(r Kaiser Permanente is the country's largest health maintenance organization (HMO). Founded in 1945, it is a non-profit, group-practice prepayment program with headquarters in Oakland, California. As of January, 1997, the organization's membership totaled over 7 million members, a majority of whom in 37 Americans IS a Kalser Permanente Member. enrolled through their employers. 424 For perspective, this figure translates to 1 in 37 Americans as a Kaiser member. Kaiser's service coverage is equally broad, with business units in ~ 7 states and the District of Columbia. Kaiser remains one of the largest employers in the state of California, and, including all USA operations, the organization reports 90,000 technical, administrative, and clerical employees and ~ 0,000 physicians on their payroll. In ~ 996, revenues totaled $13 billion. Kaiser's history began just prior to the second World War. In ~ 933, Dr. Sidney R. Garfield established a prepayment health plan for workers on a construction project in the Southern California desert. Several years later, Henry I. Kaiser asked Dr. Garfield to develop a similar plan for his employees at work on the Grand Coulee Dam project. By ~ 942, this program had been extended to include workers and their families at the Kaiser-managed shipyards in the San Francisco Bay area and Vancouver, Washington, as well as at a Kaiser steel mill in Fontana in Southern California. In 1945, Kaiser was formally incorporated, and the plan opened for community enrollment. After establishing a presence in California and the Pacific Northwest, Kaiser expanded operations into Hawaii in 195S, and Colorado and Ohio in 1969. In the late 1970s and 1980s, Kaiser embarked on an aggressive expansion plan; by 1986 the organization had extended its reach to include Dallas, Texas, the Washington, DC area, Maryland, Virginia, Connecticut, parts of New York North Carolina, Kansas City, and Georgia. In recent years, Kaiser has broadened its geographic coverage and increased membership by acquiring other plans or by establishing affiliations with other groups. This new strategy led to an affiliation with the Community Health Plan of Albany, New York in ~ 996, P8g8~2

Kd - ~ and an arrangement with Group Health Cooperative of the Washington Puget Sound area in early 1997. Until 1996, Kaiser's organizational structure was based around 12 separate regions, with Northern and Southern California operating as two separate units. In September of 1996, Kaiser announced a new organizational structure, replacing the previous regional model. The new mode! established several distinct divisions and ~ ~ local markets: N~ast ah skin - Includes Massachusetts, Vermont, central New York, east New York, and Connecticut · Knead DN~bn - Includes Cleveland and Akron in Ohio, Washington, D.C., a suburban Maryland/Northern market, and the Baltimore area A___ no MU - BI DIVE - I - Includes Atlanta, Georgia, and Raleigh/Durham and Charlotte, North Carolina Southwest Dhtshn - Composed of 2 local markets in Dallas and Fort Worth Texas Rosy MountaN DNbion- Includes Denver and Kansas City rthwat Dabs- Includes the greater Portland Hawal- Considered a special local market ,, Oregon, area · N~rn em forms and S0U~ eaefor'N - Managed as separate divisions until January of 1997, when both were consolidated into a single division. This new divisional structure is designed to improve Kaiser's ability to respond more aggressively and more quickly to local market demands. While the divisions offer a larger organizational structure, at the core of Kaiser's health care delivery system is a business partnership between Kaiser Foundation Health Plan & Hospitals and 12 Permanente Medical Groups. The Kaiser Foundation Health Plan (KFHP) is a non-profit, public benefit entity that contracts with individuals and groups to arrange comprehensive medical and hospital services. Kaiser Foundation Hospitals (KFH) also is a non-profit, public benefit corporation, but one which is largely focused on hospitals in California, Oregon, and Hawaii. KFH also owns outpatient facilities in several states, provides or arranges hospital services, and sponsors charitable, educational, and research activities. The Permanente Medical Groups are partnerships or professional corporations of physicians, one in each Kaiser Permanente division. The Permanente Group subscribes to the "group practice mode! HMO," in which physicians work Page W

Kd. ~ C" SO together in multi-specialty groups. In several parts of the country, Permanente physicians partner with local physician groups to enhance their service within these communities. Otherwise, the Permanente Groups are comprised of physicians who care exclusively for Kaiser Permanente members. Kaiser has successfully integrated the elements of health care into the largest coordinated health care delivery system in the country. Under the single umbrella of Kaiser Permanente, the organization has coordinated physicians, hospitals, home health, support functions, and insurance. Kaiser asserts that this integrated health care system is the organization's unique advantage, an advantage which leads to the organization's unique ability to foster innovations and quality improvements. In Kaiser's words, putting people and systems together as part of the integrated network "enable us to provide better quality health care than in a fragmented system." GIE3 Recent discussions about the health care industry focus on several key concepts: "managed care," Health Maintenance Organization (HMOs), and "fee-for- service" plans. Managed care is an umbrella term for an emphasis on preventive care, and the elimination of unnecessary services. Managed care also involves negotiated price discounts - generally by larger employers or pools of small- to medium-sized employers - and smaller copayments and deductibles for consumers. HMOs are one form of managed care and focus on early detection and treatment, as well as on all types of preventive care. HMOs also tend to eliminate or reduce financial barriers so that members will be encouraged to seek preventive care or, at the very least, respond early to receive treatment for a sickness. Because HMOs receive captivated or fixed monthly per-person fees from employers, they have financial incentives to keep members healthy. Finally, "fee-for-service" is the traditional health care model, in which insured customers pay 20 percent of the cost of seeing a private physician, while the insurance company pays the remaining 80 percent, less a deductible. The gross figures for health care spending and for HMO enrollment speak to the changing landscape of the health care industry. In 1995, the nation's total spending for health care increased 5.5 percent to nearly $1 trillion, an estimated average of $3~621 per person. Total expenditures for 1995 were $988.5 billion, up from $937.~ billion in 1994. Total health care spending as a share of the gross domestic product (GDP) remained at 13.5 percent. Spending for Medicare grew even faster than spending in the private sector, primarily because the private sector has garnered greater savings from managed care. By law, Medicare must base its managed care payments on a formula related to Medicare fee-for-service costs. Therefore, under current law, Medicare may not benefit from discounts and other factors that generate savings for the private sector. This is the primary reason why private sector spending grew at a rate of 2.9 percent in 1995, while public sector spending grew 8.7 percent in that year.423 P~11~4

Kdw ~ ~ Sew GrowtI, in tile number of HMOs has been equally striking. From 1976 to l99S HMO membership has risen nearly tenfold, and over 53 million people have left fee-for-service plans in favor of HMO plans.124 New estimates suggest that HMO service is, at the very least, an $80 billion a year market.425 Before ~ 980, fewer than 10 million Americans belonged to HMOs; by the end of 1994, an estimated SO million Americans, or 16 percent of the population, were HMO members.426 Point-of-service (POS) plans (a blend of HMO and fee-for-service plans, under which members are allowed to go outside of the network for specified services) also have experienced a growth in popularity. The latest industry figures indicate that virtually none of the country's major employers offered POS plans in 1990, but 34 percent did so last year, according to a Hewitt Associates study. A recent KPMG Peat Marwick study echoes that finding: 40 percent of firms with at least 200 workers offered point-of-service plans in 1995, compared to 23 percent in 1993. Participation in POS plans more than doubled in three years, going from an ~ percent share of total enrollment in 1992 to IS percent in 1995.427 These spin-offs have been especially popular among small- and mid-sized employers because it offers employees an "out" while retaining the managed care cost savings. 4 2494 259~2894 2994 3094 34 POS plans, for example, are now offered by most HMOs. Eight out of ten health maintenance organizations now offer a POS option, according to the Washington, D.C.-based American Association of Health Plans (AAHP). Five years ago, the figure was close to four in ten.427 The extremely competitive nature of the health care industry has forced almost all of the players to offer a very similar set of products. New players, new companies, and new insurance products have significantly increased the level of competition in the health care industry and, in turn, produced significant pressures on price. The result has been a challenge for Kaiser. Kaiser's current market share in each of its distinct areas varies greatly; it has a stronger presence in what were the older regions and smaller slices of the health care markets in the newer areas. In 1995, the reported figures included a market share in Northern California hovering between 22-24 percent* while in Atlanta, Georgia, Kaiser fought hard for S percent of the local market (as a proportion of file total population). *Market share for health care is usually determined In two ways: either by using Kaiser membership as a proportion of He total population, or by using Kaiser membership as a proportion of the insured population. Using He first methodology, Kaiser's market share In Northern California calculates to between 22-24%, while He second memos generates a figure closer to 30%. Kaiser's market share varies from 24 percent to 5 percent of the local market Eases 5

Kid ~ C" I~ Kaiser sells its product- I,ealthcare - to employers and individuals. Nonetheless, as with most healthcare companies, close to 80 piercers of Kaiser's business is with employers, while the remaining 20 percent involves direct sales to individuals. In line with these figures, Kaiser's marketing efforts are primarily geared toward attracting employers, although a proportion of marketing efforts are focused on individual consumers. Figure 8- ~ shows a list of the insurance products sold by Kaiser to employers in what was previously the Northern California Division anal what is now part of the consolidated California Division. Note that a different set of products is sold to companies of 50 employees or less than for companies with 5 ~ or more employees. For clarification, Kaiser defines point-of-service, dual choice and out-of-area plans as follows: Point~f4ervice - If enrolled in a POS plan, the employee may make the decision to receive health care services from a Kaiser Permanente facility, or from any non-Kaiser Permanente provider at any time. If the care is received at a non-Kaiser Permanente facility, the employee will be reimbursed according to the PM Group Benefit plan, resulting in higher out- of-pocket costs. Dual ewes Each year, during open enrollment, an employee will be able to choose either a traditional Kaiser Permanente HMO plan or PM Group managed care indemnity plan. The employee must remain within the chosen plan until the next open enrollment opportunity. Out oft a Plan - Employees whose firms are located within a Kaiser Permanente service area, but who live too far away to take advantage of the Kaiser Permanente facilities, would be covered under a Permanente Medical Group managed care indemnity plan. ~2 ~ Kaiser has offered the HMO plan for decades; the POS plan, however, is relatively new to both Kaiser and the health care industry. The point-of-service hybrid initially appealed to highly paid employees, including many top managers, who could afford out-of-network care whenever they wished. Point- of-service also attracted workers who relied on specific providers to treat chronic or unusual medical conditions or employees who traveled frequently and needed care away from home. P - 86

Kid ~ C" Sib Figure Ill: Kaiser Products and Serviettes For [ - t8 will 3 t0 50 [~l010 Onploy" Beah0'S Advantage HMO plans bow outpatient ($5, $10, $15) and prescription ($5, $7) copays; 100 percent coverage for inpatient services · Full range of preventive care services, including physicals, well-baby care, eye and hearing exams · Age-rated or composite billing The Hail b$UM" Plan 0 Salerno each Two HMO benefit plans and two Point-of-Service benefit plans Added eho - ~ for SmaD BUS& - S _ Point-of-service product · Four plan options offering Kaiser Permanente in-network HMO care ($5 to $! 5 outpatient copays) and 70 percent coverage for out-of-network services; out-of-network deductible ranges from $250 to $500 per member, out-of- pocket maximums vary accordingly mended Chow · HMO and out-of-area product · Provides Kaiser Permanente HMO plan ($0 to $15 outpatient copays) for employees residing in the Kaiser Permanente service area; provides Kaiser Permanente Insurance Company's PPO through Community Care Network (80 percent PPO coverage with $5 to $! 5 outpatient copays) OR indemnity coverage (80 percent with $ ~ 5 to $20 PPO outpatient copays) for employees residing outside the Kaiser Permanente service area. O~f-Area Plans · Available in combination with all other products, excluding the HIPC · Provides Kaiser Permanente NO plan ($0 to $15 outpatient copays) for employees residing in the Kaiser Permanente service area; provides Kaiser Permanente Insurance Company's PPO through Community Care Network (80 percent PPO coverage with $5 to $! 5 outpatient copays) OR indemnity coverage (80 percent with $! 5 to $20 outpatient copays) for employees residing outside the Kaiser Permanente service areas sup,1emantal Ben0m Programs · Optical coverage through Kaiser Permanente HMO · Dental coverage available through Delta Dental · Chiropractic coverage available through the American Chiropractic Network (ACN) P8q8~7

Kin ~ C" Sly For Ilbnts with 51 or More ~ghb hnpioy~s 1 1 Dual Chow · Dual option product · Provides coverage through Kaiser Permanente HMO plan ($0 to $15 outpatient copays), PPO coverage through Community Care Network (90 percent to 70 percent PPO coverage with $5 to $20 PPO outpatient copays), OR an EPO plan ~ ~ 00 percent to 70 percent coverage with $ ~ 0 EPO of flee visit copays); employees select their plan of choice (Kaiser Permanente HMO OR Kaiser Permanente Insurance Company's PPO/EPO) at open enrollment Added [ho - _ POS3 ~ Point-of-service product · Provides coverage through Kaiser Permanente HMO plan ($0 to $ ~ 5 outpatient copays), PPO coverage through Community Care Network (80 percent to 70 percent coverage), AND indemnity coverage (60 percent to 50 percent) coverage; deductible ranges from $250 to $2,000 per member; out- of-pocket maximums vary accordingly Anise · HMO and out-of-area product · Provides Kaiser Permanente HMO coverage ($0 to $ ~ 5 outpatient copays) or Kaiser Permanente insurance Company's PPO through Community Care Network (90 percent to 70 percent PPO coverage with $5 to $20 PPO outpatient copays); employees select their plan of choice (Kaiser Permanente HMO OR Kaiser Permanente Insurance Company's PPO/EPO) at open enrollment Out~f-Area Plang · Available in combination with all other products, excluding the HIPC Provides Kaiser Permanente Insurance Company's PPO coverage through Community Care Network (80 percent PPO coverage with $5 to $ ~ 5 PPO outpatient copays) OR Indemnity coverage (80 percent with $15 to $20 outpatient copays) for employees residing outside the Kaiser Permanente service area SUppb_~! B-fit Program Optical coverage through Kaiser Permanente HMO Dental coverage available through Delta Dental Chiropractic coverage available through the American Chiropractic Network (ACN) Pages 8

Kdw ~ tot She ll~Lllp41RlllBl~llall~llllIt'ld,luillilll0elldlnIll~u To improve the focus and quality of its marketing function, Kaiser recently began an organizational restructuring. The departmental reorganization began with the hiring of a new Senior Vice President of Marketing and Sates for Kaiser Foundation Health Plan and Hospitals, in November of ~ 995. The Senior Vice President of Marketing and Sales is now responsible for all marketing and sales functions. This position reports directly to the President and Chief Operating Officer of Kaiser Foundation Health Plan and Hospitals. Prior to November of 1995, marketing and sales were primarily the separate responsibility of the Regional (and now Divisional) Managers. Now, the snore centralized marketing function and the location of marketing in Kaiser's central office operations arm encourages the melding of the marketing and operating functions. The new role of marketing is outlined in Figure 8-2, Product Development, Roles & Responsibilities. The Program (or "central") office is responsible for strategic product design, organization-wide prioritization, assessing the business case, conducting feasibility analyses, developing the promotion plan, market testing, client training, and communication. The central office also directs design efforts at the divisional level. National Product Development leaders receive direction from and work out of the central of rice. The individual divisions are responsible for coordinating with the central office to establish priorities. This coordination has been labeled the "National Team" for product development. Divisions also are responsible for assessing the operational feasibility of new products (i.e. answering the questions "can existing systems absorb new customers?" and "do divisions need to make systemwide changes to accommodate the new product or service?"~. Regulatory compliance and adherence to stakehoIcler agreements also are the responsibility of each division. Finally, divisions tailor products to local demand and oversee the training of divisional personnel. The training process is facilitated by training modules for each product (although the modules are developed at the national level). Local markets also bear a part of the product development responsibility. Local areas must coordinate implementation and provide divisional managers and the central office with feedback on performance. Local markets also are viewed as primary generators of neat ideas; ideally, product ideas floor from the local markets to the divisions and then on to the central office. Figure 8-3, Product Development Phases, diagrams this product process. b P - 80

Kdw Pats Cam Sew Figure I-2: Produet Dav010pment Program Off - · Strategic Product thesis Roles and ResponserKbs · Prioritization (Program and Divisional VP's Team) Business CasefFeasibility Analysis & Promotion Plan · Market Testing (Pre/Post Raunchy Client for Training and Communication · Directs National Design Efforts in Divisions for Strategic Products Division Dblshn Prioritization as a National Team Assesses Operational Feasibility with National PD Leaders Regional Compliance Stakeholder Agreements · Enhar~ces/Customizes Product · Oversees Training in Division (Modules Created by HPl) Local Marks ~ Coordinates Implementation · Provides Performance Feedback · Implements Design at Customer Interface · Communicates Strategy Monitors Performance Idea Generation Pat

Figure I-3: Product D0v010pm0nt Phases _ _ I~ ~L __. a_ In__ · Screening · Prioritization · Feasibility Study and Asscs~nent · F'nalReconunendation , . . -: . . . . .- . l; ': -''' ':'' '''1 1 Be a~ff~e~t_t · Marica Need · Idea Generation · Conecpt Dc~elopn~cn k~dbB/ ~ - i.1 wet :'.~1 1 2 ~ ~,,. ~ --in = ~'a = - ~ I. Em_ - EM - ·T - ck Product Perfonruance J Succc" B. ~ · HandotT · T'ainin8 · Product Launch ~ ~ - · Assemble Team · Work Plan · Product Desi~/Deve10pn~ent · Maricel Testing, Planing Materials · Sample Intpiemeatat~on Plan , _- ~is,- : . . . ~ ~ ~ELArs~E' ~ 'L. _ '~v'~;~1,~ ~,9t' :y'~ Am= it'' ~ . . . ' i .' ' . 'I' . .' ~ 'a ~ "' - ., :' :- . . . ' ' , ' .::: ': '' . ' :': ., , : :- ' ': ' ' ': ' : . A= Kaiser's first step toward refining the organization's marketing message has been to rethink the organization's marketing goals mission, advertising approach, and the product development process. At the heart of this rethinking is a shift toward "brand management"; in this case, thinking of Kaiser Perrnanente as a brand with specific equity in the marketplace. David Aaker, E.T. Grether Professor of Marketing and Strategy at the Haas School of Business at the University of California Berkeley (and author of Builcling Strong Brands, The Free Press, ~ 996, and Managing Brand Equity, The Free Press, 1991), has been hired by Kaiser as an independent consultant. Aaker argues that just as an organization may sell a tangible product or service, a company also sells a set of perceptions (some intangible and irrational) as wed] as a collection of values - or even what the company stands for - to the consumer. Aaker believes this is all part of a company's "brand."424 In a sense, branding identifies the customer's series of expectations about the service, and then delivers on that promise. Together, the brand values, customer perceptions, and buying expectations create a relationship with that product or company which can transcend price by engendering deep loyalties. This loyalty is particularly useful in "confused markets" where customers are bombarded with multiple appeals. Page I-8

Kd" ~ C" Sol Aaker also believes that to develop an effective brand a company or organization must be very clear about the product, relationship, and value it is selling to the customer. Further, a "clear and effective brand identity, one for which there is understanding and buy-in throughout the organization, should be linked to the business's vision and its organizational culture and values. It should provide guidance as to which programs and communications will support and reinforce the brand and which will detract and confuse."433 By working toward this clarity a company can develop a solid "value equation" for the customer: a clear sense of what the company is offering the consumer in the purchase relationship. Aaker translates this value equation into equity that can be leveraged in the marketplace to attract new customers. One company that has a clear brand identity is The Body Shop, which as Aaker notes, has a core brand identity that is "its profits-with-a-principle philosophy." Swatch watches, Saturn cars, and Tide laundry detergent are other products and companies with clear brand identities. Saturn cars offer a long-term, almost familial commitment to the buyer, while Tide offers mothers a reliable product to help them care for their families. The Walt Disney company is another organization with a clear brand identity and a focused brand vision. Once a company has developed a brand vision, Aaker argues that senior-level managers with decision-making power must develop a brand strategy. Kaiser's marketing function believes that a clearer brand vision and an explicitly stated brand strategy will refocus Kaiser's market research efforts, communication strategy, sales performance targets, and account management. To develop its own brand strategy, Kaiser has outlined the following list of tasks: · Defining customers · Understanding what those specific customers want from Kaiser · Deciding what the core values are for the organization · Brand basis for positioning strategy against competitors · Aligning communications, products, and strategic partners with the promise · Using a brand strategy to drive operational performance I= Traditionally, Kaiser has segmented potential customers using demographic or regional analyses. More recently, however, Kaiser has used its research into customer purchase decisions to realign its market segmentation. As part of its brand-related market research, Kaiser researchers asked what do people value? Paging

Kin ~ C" Sly Being seen? Being heard? Being treated? Being cured? With answers to these questions, key market segments for Kaiser broke into the following categories: LOW ply Customers focused almost exclusively on the cost of service. Kaiser is a popular option among this segment because among HMOs (which tend to be less expensive than fee-for-service or POS plans), Kaiser is usually the low-cost leader. t0 it to mB ~b~a~ht, gibe - Customers interested in uncomplicated medical information; treat doctor as an expert in a business relationship. Research has demonstrated that most customers view Kaiser as a blue collar, almost socialist organization committed to serving the "common man." The "give it to me straight, doe" segment relates to Kaiser's no-frills, unpretentious approach to health care. Hugh Who - Customers focused on physician-patient relationship without the usual costs associated with fee-for-service care. Mothers with young children (who are therefore often in need of pediatric care) often fall into this market segment. ~rys~Ig E ~t EM - Customers interested in alternative, holistic therapies; customers who also want one-stop shopping for every aspect of their physical and emotional well-being. Since Kaiser is a comprehensive medical provider, "crystals and wheat germ" customers often opt for the Kaiser plans. Kaiser's market segmentation approach has helped it to better understand the various markets to whom it appeals, and for whom Kaiser has brand identity. Such research also assists Kaiser in the development of advertising and promotional copy. The pricing of health care products and services is an extremely competitive business, and is rarely uniform across division, employer size or employer industry. Nonetheless, there are several patterns in Kaiser's pricing strategies. With larger employers, there is a greater likelihood that Kaiser will establish a price based on experience with the company. When evaluating "experience," Kaiser reviews patterns of utilization and general expenses; to calculate a price, Kaiser projects this experience one to three years in the future. This is usually called "prospective" pricing. For smaller employers, Kaiser relies instead of pooling or community ratings. Since it is almost impossible to determine statistically relevant patterns of utilization with small sample sizes, Kaiser instead pools smaller employers together and then determines a collective price for the group. Community Page 8-8

Kid ~ C" Sly ratings operate similarly, with establisI,ed conventions for"bundling" employers by size and industry category. Ir~ To identify employers, Kaiser often relies on purchased employer lists from a variety of sources. Dun & Bradstreet remains an excellent clearinghouse of information on small- to medium-sized companies in a specific area. Contact names and addresses for larger employers are easily obtained through any Fortune 500 listing. Kaiser tracks and manages these larger, national accounts internally through its "National Accounts Program." Kaiser also purchases lists from media companies that broker Kaiser's radio and television advertising. Westar Media company in San Francisco, for example, is a large wholesale media company. Companies pay Westar to run advertisements; Westar in turn bundles advertisements from various companies and sells the bundled ads as blocks of advertisements to television and radio stations. (By bundling ads, Westar is able to negotiate for better prices or airtime.) From this type of brokering, Westar has obtained contact names and addresses for thousands of companies in specific markets. Kaiser has purchased data from Westar to survey potential employers before a full-scale marketing effort, or to use the lists as the basis for a telemarketing campaign. Kaiser has had great success with this type of database. ME Internal Sales Forge and Brokers Depending on the target customer, Kaiser has employed both an internal sales force and brokers who are not employed by Kaiser. Until recently, however, Kaiser was reluctant to outsource the sales function because the product offered is extremely complex. In addition, to remain in compliance with many state and federal regulations, Kaiser has to keep detailed records and follow a structured process in talking with potential customers. If Kaiser is ever audited, this information will be vital. Without extensive (and expensive) training, Kaiser has been concerned that external sales representatives would be ill-prepared to handle these responsibilities. Nevertheless, market forces have moved Kaiser to use brokers rather than to continue to rely strictly on their own sales forces. Because Kaiser's market among larger employers was seen as stagnant or shrinking due to downsizing, Kaiser needed to emphasize selling to medium- and small-size companies. However, medium- and smalI-sized companies often cannot afford to dedicate personnel solely to selecting or administering health care programs. Often, the individuals who perform this function wear many hats, leaving them little time Pained

KIl80r 1~ll~ Ga88 Study to become experts on health care benefit administration and emerging technologies. Worse, many human resource employees are unable to contrast the very technical aspect of today's benefit plans. Thus these human resource personnel look to brokers to assist them in choosing employee benefits packages, including health care plans. Such brokers work on commission. 129,130 In a change from prior practice, therefore, Kaiser began paying brokers in the Northern California region to sell its small group products. Up until that time, Kaiser had relied solely on its internal marketing and sales teams to sell its health plans. To encourage broker participation, Kaiser mailed notice of the new commission offer to approximately 3,800 eligible brokerage firms and individual brokers in Northern California. Figure S-4 shows an example of promotional literature for small businesses. In the Northern California area, Kaiser pays commissions on a "sliding scale," which declines as the first-year premium gets larger. For instance, 6 percent commission is paid for $31,000 to $50,000 in first-year premiums, and 4 percent commission is paid on first-year premiums of $5 ~ ,000 to $ ~ 00,000. There are no commission reductions on renewals. Eight percent is the highest commission paid to brokers, and is payable to sales in the small group market of 3 to 50 employees. In addition to healthy commissions, Kaiser attracts established agents by holding seminars on healthcare financing that count toward an agent's continuing education requirements. Te le mar keying Recently, Kaiser has implemented internal "call centers," or "high tech" phone call generating and answering centers, to sell health insurance products.** Through highly trained telemarketers, Kaiser targets customers and employers with the best potential to buy products and services through direct selling, lead qualification, or the cultivation of customer information for fixture marketing efforts. The small- and medium-sized employers are developed from the Dun & Bradstreet, Gallup, and Westar databases mentioned earlier. ** l[ndust~y estimates for the number of call centers in the UNITED STATES today are as high as 60,000. According to the Direct Marketing Association, Dose centers were responsible for producing nearly $360 billion In total UNITED STATES sales in 1995. That figure could grow as high as $600 billion by 2000.134 Pat

Kaiser P - nit lea S1= : Pagers . ... I.... Figure I-4: Kaiser Promotional [iteratur0 Running a small business in wives t-.ard v`Por~r 1~g his `~d ,no'~ in.. it~--iQ u'r.-e~:.nty. All '> aft) yr'c~1~e go ,~..~y other ink t~:att~rs to Arcs o,- ::>=s`;] Is ~ Alar 1~31~3 cove~ace. t~Jnicn is Hahn <aider ?~ r~3~.er~t~ v~fc~r;s casts` ~ ~ a~;!~>it~.;ef ' :0,~,tt t - ~1i"~> thy 5!~10~l ~ICj[,~:~.~ - fit Bitt ~ .t~:l Llt~ tj~`r[;r j5,r~fl`~. Miff fly v - ' `-.!~:' `~~>,`' I l-~ !;t~7 Bit. person<; i2=t r0~ ~ iti~c3t.~( li ~ i.., Sty) '1~-'; 0~. i "\'4~' )~~3 flit' 'I)';; 1~.~07e I? .~:'.~i ~--lt.ent~- ~v'l~OrC. to I'COCiOd rot:: i. `~.c-~Jr->ll~ll1~S. KA1~ - F ~ _ If t~1~.'~ A! ~ .-- Business Advantage k4.,'i\!(''`~ '.''0t 3~' t`~t r employs- tree ac~;i''t<.~.~:~s Act; Coverage which can be custom-tailored to the needs of your work force. I;- yolk =~lp'~c:~ieSs rle8C~` to `-~C~'t-£~', '~l;9t!Ca?, O' (~;,`~.:)rcl(:'t~ (`r.,;.~r~-.~-.~?? <.~.~:r i~C~a,1~?~-~ {;,li'.~'S ~ uses ;3 `'c;riery 'c' c.~oice`- ,r tills it r)~ftil Co.,:~rE3~.~e, s; t!-;at en~pl<~`fees set the It. ;~i~ r~ tr`a t's .,,~. or ;;-. Quality personalized health care from their own teen, of physicians. A: liaises ?~as~enr~e, special en~p'~asis is placed on oLlilo.ir,`! ~ OnC-tO-OrlO '~-13tic'~sh~p, Skeet petri the physic argot ;t,~ pain,. .-.~e n drape .~; i~teal-1 care. Tacks Why your employees-can choose their c: Kaiser Perr,~ane~te ~< star. Arced ides card get eas`; ~e~e.~.l to specialists - ;~;itho'`;- porno thrc>~'q~, Urn i.~s~'ra~ce company. Kaiser ?e~r~?~ente's rates for health ·-~`ere.~e a e ext<ome.y con-~p~t `.ie ..,,.h plans starting at just 572.97., > gr~;~c Alp for Business Acvant2~e ~o.~dn~t be easier. .Arld "here are virt.,~at,y no claim forms t3 bitt C Ut. :. , ~ .L arm, ~ ~ a I to, ''ourselI ilO`r`' <~ for ~e~n~.~-~?n~e Business Advantage Ha ~ help yoc ~ s-.~al' Is; 5~\' heat... -of labors infer nation o' ~ cite. Cain your Broker or call KAISER pERMANENTE at m Ire, ·~r2t;, ~h.~'1(, ran ,-!~:~:~I~i~ ., Or., ",;,j;t' ~'t4,~^'', 0~ ': :,~'~-'t' :':~-;-'i:'Sl'l~,

Kdw ~ Can Say With the help of Information Management Associates (IMA), a Shelton, Connecticut, provider of marketing software, Kaiser began using a call-center in California in June 1996 to respond to incoming calls prompted by new direct mail and television advertising campaigns. IMA, whose call center software and systems start at $150,000 and go up to $350,000 or more, helped train Kaiser representatives, who are now increasing enrollment in Kaiser by providing salespeople with qualified sales leads.434 Some 120 phone representatives in both Southern and Northern California call prospects to discuss HMO plans and options. If the customer is interested, the phone representative sets up an appointment for a salesperson to visit and also sends them information about the plan. All of the information about the customer and tile appointment is immediately sent to a salesperson's computer by the phone representative. As a result of the new call center operation, the number of Kaiser's customers (individuals rather than employers) in Southern California grew from ~ 5S,000 at tile end of 1995 to more than ~ 80,000 as of October 1996. But just as important to Kaiser is the continuer! flexibility the company feels it has in running its own call center instead of outsourcing the function. Along with having a central phone bank on-site, the Kaiser call center is a "virtual" center, in that phone representatives can dial into it from their homes or elsewhere and answer customer inquiries or make outbound calls. Additionally, by being able to alter its call-center programs quickly to meet the changes in its HMO plans, Kaiser believes it is better reaching its customers. Several companies in addition to Kaiser have had well-publicized successes with call centers. Federal Express is continuing to outpace its competitors in part due to its package-tracking technology integrated with a call center, which handles more than 12 million calls a year. General Electric uses its in-house center to increase repeat customer purchases, and has reduced the cost of servicing customers from $67 million in 1995 to less than $20 million today. 130 ~-Pel~ Kaiser has used traditional avenues to advertise its products, including radio and television advertisements and print media geared toward local markets. (See examples attached.) Kaiser's more innovative advertising has come through the sponsorship of medical research, funding community initiatives, producing health-related plays for adolescents, and visible involvement in national health care issues. P8gS 8-17

Ka 811r P - net - _ - _ Kaiser's Division of Research in Oakland, California, has made numerous important contributions to medical, epidemiological, and health services research. The division conducts long-term studies on a base of close to 3 million northern California Kaiser members. The division has published over 500 studies. In 1992, funding for the division was $9.2 million, and a staff of ~ 80 is currently at work on 50 research projects. Funds are primarily competitive federal grants and contracts. The division also has close collaborative ties with the University of California at Berkeley, San Francisco, and Davis; Stanford University; and the California Department of Health Services. 1 2 ) . . Kalser's more ~innovat~ve advertising has ome through medIoal research, Community inItIat~ves,and visible Involvement In nationalh0alth ears lBS8RS Kaiser also operates a Center for Health Research in Portland, Oregon, whose purposes include serving the public interest through research, demonstrations education, and community service. The study base include 378 Northwest Divisional members, and involves a permanent staff of ~ 5 investigators and 200 technical assistants. Center collaborations include work with the Oregon Health Sciences University as well as universities throughout the states of Washington and Oregon. In 1992, Center funding was over $48 million, primarily through competitive federal grants and contracts. Finally, Kaiser founded the Research and Evaluation Program in 1987 in Los Angeles, California, to perform clinical research, health services research, and epidemiological studies. The study base involves 2.2 million members from the southern California area. Study efforts - some funded through external research grants- include large-scale studies on epidemiology, medical outcomes, and the cost-effectiveness of health services. The following research projects now underway have been well publicized in local and national newspapers: · National Institutes of Health awarded Kaiser physician William VolImer, MD, a five-year grant to find the best asthma treatment mode for children ages 4-14. · Researchers in Northern California have demonstrated for the first time that large-scale prenatal population screening for Cystic Fibrosis (CF) carriers is a viable method of identifying couples at risk for affected fetuses. A year- long screening program involved approximately 5,100 Caucasian and Hispanic women in early pregnancy. · Kaiser initiated a multiregional demonstration project to improve health service delivery to its elderly health plan members, age 65 and over. The $ ~ .6 million project, funded by the Garfield Memorial Fund, consists of demonstrations in a number of Kaiser Permanente divisions. · The Northwest and what was originally the Southern California regions are participating in the first major test to determine the effectiveness of the drug tamoxifen in preventing breast cancer to high-risk women. The five to Pagers 1

Kdw ~ C" Sew seven year, $60 million National Cancer Institute study was launched in 1992 at more than 270 sites in the US and Canada. In addition, Kaiser has been involved extensively in studies that track the health of pregnant women and their babies. Most recently, Kaiser completed a three- year study that tracked the deliveries of approximately 7,000 women prior to cesareans. Kaiser also was chosen to conduct a Center for Disease Control study on the immunization patterns of some 100,000 children. Again, many of these studies have been publicized in local, regional, and national newspapers, and are often used in Kaiser's literature to reinforce Kaiser's image as a health- conscious HMO committed to the public interest rather than to its bottom line. As a non-profit entity, Kaiser is required by law to contribute to the "public good" of the community. In other words, in lieu of paying taxes, Kaiser '~pays" communities through useful research projects and by funding community initiatives. In ~ 994, Kaiser's national community service spending exceeded $127.5 million. Programs supported through these funds range from contributions and grants to dues subsidy, charitable care, programs for children, and research. The following is a quick review of several of these efforts: Kaiser Permanente's Dues Subsidy program provided free or reduced-cost health benefits to nearly 136,000 low-income individuals and families not eligible for Medicaid, at a cost of $46.6 million. Kaiser provides an estimated $6 million in charitable care (care for those who are unable to pay for care and were not covered under any of Kaiser's programs). · Kaiser contributed close to $20 million in community contributions and scholarships. Education benefited heavily as did community programs serving the elderly, children, health services, minorities, and persons with disabilities. Over 1,500 organizations were assisted. Kaiser also has received considerable attention for its "RAVES" (Real Alternatives to Violence for Every Student) program. The program was developed by the Mid-AtIantic States markets to teach and promote conflict resolution skills across grade levels, as part of a program to reduce violence. Over 688,000 children and teachers have seen the RAVES program. Again, the RAVES program and the other community initiatives have brought local and national media attention to Kaiser. Kaiser, in turn, has viewed the attention as an opportunity to publicize Kaiser's commitment to the "working man" and to solidify its image as an alternative to the for-profit HMOs (who are ostensibly more interested in their bottom line). Page &s

P - ~20 Kd. ~ C" Shy mm_ Costs Kaiser Health Plan and Hospital's total annual budget is close to $13 billion. The organization currently spends between $7 to $10 million (or less than 0.1 percent of their annual budget) developing a new product such as a POS plan, which is on the low end of the scale for the health care industry. Obviously, enhancing a feature on an existing product to develop a "new" product is considerably less expensive than developing a new product or service entirely from scratch. Kaiser marketing personnel pointed out a drawback in measuring the costs of product development for services: usually a new "service" is really a new "process," a considerably more elusive and therefore immeasurable quantity The new National Advantage is one such example. The National Advantage program is a nationwide HMO plan that offers employers with wide geographic coverage one point of contact at Kaiser. This program "eliminates the hassles of coordinating benefits options across multiple locations" by offering administrative ease through a personal representative who is "the single point of contact from initial purchase, through enrollment, billing and renewals." Kaiser personnel had difficulty estimating the cost of this new program. Measures of Effectiveness How does Kaiser measure success? Kaiser spends considerable resources in measuring the quality of its service as perceived by consumers, employers, and the general public. In addition, Kaiser conducts benchmarking of its processes as compared to other industries. With regard to marketing, Kaiser uses three different measures to evaluate success: general awareness about the organization, number of persons who "consider purchasing," and the growth rate for the organization. After a successful marketing campaign, a greater number of people should know about Kaiser than before the advertisements were aired. A second measure is the number of persons who previously did not consider purchasing Kaiser, but have now changed their minds and are considering Kaiser as a possibility. An increase in the growth rate of the organization is the final measure of marketing success. If specific markets within the organization meet or exceed forecast, then Kaiser knows that a marketing campaign has been effective. Kaiser also tracks the general effectiveness of marketing efforts by comparing the cost of sales to the revenue generated Mom sales. If, for example, marketing to individuals, is costing the company far more than the revenue gained through enrolling members, then Kaiser re-evaluates and re-prioritizes its marketing effort. In general, marketing to employers is far less expensive than marketing

Kdw ~ ~ Sew to individuals since a single employer can generate multiple enrollees. Finally, Kaiser compares its marketing costs to other companies both in and outside of the health care industry. To encourage innovation, Kaiser has been particularly aggressive about researching how companies outside of the health care industry develop, price, and manage new product development. customer Satisfaction Kaiser spends considerable effort and funding on tracking customer satisfaction. From 1988 to 1993, Kaiser's customer market research was re-organized to follow a system called STAR: Satisfaction, Tracking, and Reporting methodology across what were then 12 regions. STAR used the same questionnaire and survey instrument for each region, except that individual operating units could add their own questions. To administer the questionnaires, (45 questions, ~ 0 minutes each), Kaiser used Computer-Assisted Telephone Interviewing (CATI). One hundred (100) surveys were completed and tabulated per market per quarter. The STAR program measured member satisfaction and the impacts of service initiatives. Results from the first five years of STAR enabled Kaiser to develop internal benchmarks, and showed that member satisfaction varied greatly from region to region. Further, the key drivers of satisfaction were largely dependent on what the industry calls "care `delivery variables," such as interest and attention of doctor, ability to see regular doctor, appointment access, and phone access. STAR also has been sensitive enough to record the impact of performance improvement initiatives. For example, after panel-based compensation for physicians was introduced across all regions, STAR results reported increased satisfaction with "ability to see your own doctor." In another example, re- engineering appointment making and implementing a call center improved members' satisfaction with phone access. The ability to track a few key issues over time and the option to track the impact of initiatives were two positive aspects of the STAR market research program. Unfortunately, there were problems with the STAR information. For one, comparison between Kaiser divisions was not the relevant comparison for Kaiser. What they really needed to know is how they compared to the non- Kaiser competition. In fact, the internal benchmarking may have inhibited the drive for performance improvement. In response to these concerns, from 1994 to 1996, Kaiser introduced external benchmarking into the marketing effort. Therefore, in 1995 Kaiser began to include a statistically significant random sample of non-members in the phone survey. Questions asked of non-members were as comparable as possible to the Kaiser member survey. The result: external benchmarking redefined the challenge as a gap between image and performance. Pagers

K`ser ,m'~ ease saw Currently, Kaiser is in the process of determining whether survey research conducted by an internal or external group would prove best for conducting market research for external benchmark data. Internal surveys would have the advantage of providing control of timing, sample, and context; however, an internal survey offers little credibility outside of the organization. In their evaluations of HMOs, for example, Newsweek and Consumer Reports award fewer points when the HMO conducts consumer satisfaction research in-house rather than with an independent firm.423~424 Kaiser agrees; leaders within the organization fee] that external surveys are more difficult to control and are of a more uneven quality, but have the advantage of more credibility in the marketplace. When Kaiser audited its market research spending, they realized that a considerable percentage of marketing funds were being utilized to assess customer satisfaction through the STAR and other programs. While this was certainly useful information, the STAR data and tracking sidestepped the more fundamental series of questions Kaiser needed to ask. These more relevant questions involved members' repurchasing decision rather than service satisfaction. For Toyota, for example, the core issue to track for Lexus owners is not whether customers are satisfied per se, but rather whether customers recommend Lexus cars to their friends or whether they purchase yet another Lexus. The case was similar for Kaiser; the organization needed to know whether existing customers chose to repurchase Kaiser health plans and whether Kaiser members recommended the plan to their friends and family. To accomplish this more subtle level of market research, Kaiser focused on assessing the repurchasing decisions at the consumer level. The flow of marketing research at Kaiser now begins with identifying loyal customers and then conducting extensive interviews and surveys of these members. Less loyal and even "disloyal" customers also are targeted and surveyed. The primary purpose of the interviews and surveys is to determine the key elements that separate the customers who choose to repurchase Kaiser health plans from those who purchase another health plan. From these critical questions Kaiser begins to develop a profile of core and ancillary target consumers. Future marketing efforts then become focused around the core consumers; meanwhile, the organization as a whole reviews the issues that discourage consumers from purchasing Kaiser. If organizational changes can be made to capture less loyal or even "disloyal" customers without sacrificing organization goals, objectives or brand vision, then Kaiser moves forward with these changes. Other Measures of Effectiveness Kaiser also has looked to external resources to obtain survey results and to establish benchmarks for measuring performance. Large companies, state offices of personnel management, and the HEDTS Medicare/Medicaid requirements are sources Kaiser pursues. Palled

Kd - ~e~s~ · Larger Pompanos - Larger companies and employers often conduct their own surveys to establish employee satisfaction, usually to determine whether or not to continue a relationship with Kaiser or other employee- benefit -providers. · Stab Of - 1 of P~rsonnd Managarnent - Through its office of Personnel Management, for example, the State of California surveys its civil employees to determine levels of satisfaction for available health care plans. These surveys offer comparable results by plan, and are generally well known for quality of data. The data also is very accessible: a booklet costs only $~.95, or a diskette with data may be purchased for a nominal fee. · Con~uliants- On several occasions Kaiser leas hired the Gallup company to survey member employers of all sizes. in addition, the survey sample included employers not purchasing service from Kaiser. The employers offered information on Kaiser's reputation and general perceptions about the company. · Sells - As of January I, ~ 997, more than 4.9 million Medicare beneficiaries were enrolled in a total of 336 managed care plans, accounting for 13 percent of the total Medicare population. That represents a ~ 08 percent increase in managed care enrollment since 1993. In 1996, an average of 80,000 Medicare beneficiaries voluntarily enrolled in risk-bearing HMOs each month. Medicare beneficiaries can enroll or unenroll in a managed care plan at any time and for any reason with only 30 days notice.435 As the number of beneficiaries enrolled in managed care plans has increased, the Clinton Administration has been working with states, insurers, health care professionals and consumers to assure the quality of care provided in that setting. Several initiatives to evaluate care are already underway, including the Medicare HEDIS, which was developed in partnership with the Kaiser Family Foundation to establish "a proven performance measurement system that will minimize reporting burdens on managed care plans serving Medicare beneficiaries." The Health Care Financing Administration, a federal government entity under the auspices of the Department of Health and Human Services, began requiring plans to submit Medicare HEDIS data as of January ~997. This HEDIS requirement included two surveys within 1997 alone. · N8'l- The National Committee for Quality Assurance is an indepenclent non-profit organization based in Washington, D.C. NCQA has worked with consumers, health care purchasers, state regulators, and the managed care industry in developing standards that evaluate the structure and function of medical and quality management systems in managed care organizations. NCQA's Standards for Accreditation of Managed Care Organizations evaluate a managed care plan's performance in the areas of quality management and improvement, utilization management, credentials, members' rights and responsibilities, preventive health services, and medical Fast

Kit ~ C" Sit record-keeping. Accreditation by NCQA demonstrates a managed care organization's commitment to principles of quality and continuously improving the clinical care and services it provides. While there are no universally accepted stamps of approval, accreditation by NCQA is generally understood to be a more accepted measure of HMO quality. As Newsweek points out, "Otto get [NCQA approval] a plan is judged on 50 different characteristics, like how well it checks out doctor's credentials. Of the 222 plans in the country that have been reviewed by the NCQA, only 37 percent won full accreditation. An additional 39 percent got partial accreditation, percent received provisional accreditation and 12 percent were denied accreditation." 424 As mentioned earlier, Kaiser has hired the Gallup company to conduct polls of employers to better understand how Kaiser is perceived in the business community. These surveys and interviews have been very effective in prov Kaiser with a "snapshot" of the employer marketplace. · Ic wing In contrast, Kaiser does not use any survey instruments to gage community support. Instead, the organization monitors regional, neighborhood, or local responses when presented with major issues affecting Kaiser. For example, last year Kaiser proposed relocating the Oakland Kaiser facility to an unused football field on the Merritt Community College Campus. As part ofthis relocation, Kaiser proposed collaborating with the college to develop vocational training programs in nursing and medical technical specialties, and committed to spending millions of dollars in funding for community initiatives. However pro- community the proposal, the response from the Oakland City Council and from the entire East Bay area was resoundingly negative. Editorials fitted the newspapers and "anti-Kaiser" headlines appeared in the Oakland Tribune and San Francisco Chronicle. The consensus was that Kaiser was cheating Oakland by relocating. Kaiser executives viewed the Merritt Community College relocation as a failure in their community relations. Kaiser executives agreed that they had done a poor job of outreaching to community leaders, and had failed to involve community groups in the decision-making process. = Concepts from the Kaiser Permanente case study that may be transferable to the transit industry include the following: Kaiser Permanente has focused on developing a "brand image" for the organization. This requires the development of an image via advertising and promotion, and absolute adherence to that image in the delivery of products and services. Some transit agencies accomplish something similar to this when they reinforce a particular image of themselves with slogans, promotions, advertising, and graphic design. Key to the success of this approach for transit, however, is ensuring that the image cultivated fits the Paqe~24

Kdw ~ Gem Sew . service and vice versa. While this is not exclusively a "business-to- business" marketing approach for Kaiser, it is still key to attracting the employee members, Elicit make up 80 percent of Kaiser's customers. Kaiser has reorganized to tightly integrate its marketing and sales with product development and operations at both the national and local levels. This type of organizational structure would be unusual in transit, but it is still important that these functions work closely together to ensure that transit service is responsive to the needs of businesses and employees. · Kaiser conducts extensive and ongoing customer satisfaction research. Similar research in transit would help to identify routes or areas which need improvement, and also would indicate the impact of marketing promotions or service changes. Kaiser also is asking hard questions, such as intent to continue to use the service. Such questions to transit passengers might help identify problems as well as areas needing more marketing affection. Kaiser found it necessary to market to small business, but impossible to do so with its own sales force. Its alternative approach was to use insurance brokers, who receive a commission for selling Kaiser's services. While transit agencies are not likely to be able to provide a sufficient commission to insurance brokers to interest them in transit-related programs, insurance brokers might be willing to provide literature on transit services as a service to their employer/clients. Kaiser focuses a lot of effort on service to the community, partly because it needs to do so as a private non-profit organization, and partly because it furthers Kaiser's image as an organization interested in the greater good of the community and in furthering health care through research. Although transit does not have the advantage of excess revenues to put into community service, transit agencies often get pressed into helping with community events. Like Kaiser, the special community services that are provided by transit should be seen as part of marketing, and should be promoted so that transit gets appropriate credit. Pat I-~

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