Question

Conduct an internal audit of the organization known as Kaiser Permanente and answer the following questions;

1. Description of the organization
2. Historical financial performance and current financial condition
3. Major resources and competencies
4. Internal value chain

Answer 1

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1. Description of the organization
   Kaiser Permanente is an American Integrated Management Consortium, based in Oakland, California, United States, founded in 1945 by Industrialist Henry J. Kaiser and Physician Sidney Garfield. Kaiser Permanente comprises the Kaiser Foundation Health Program, Inc. (KFHP) and its regional working subsidiaries; the Kaiser Foundation Hospitals; and the Regional Permanent Medical Groups. It comprises 3 separate, yet interdependent entities. As of 2017, Kaiser Permanente is the biggest United States Managed Care Organization operating in eight countries (Hawaii, Washington, Oregon, Colorado, Maryland, Virginia, Georgia) and the District of Columbia.
   
2. Historical financial performance and current financial condition
   Operating revenues totalled 79.7 billion dollars for 2018, compared to 72.7 billion dollars in 2017. Operating revenue was $1.9 billion, or 2,4%, compared to $1.7 billion* in 2017, or 2.4% of operating revenue. Operating net incomes in 2018 amounted to $0.6 trillion, up from $2.1 trillion in 2017. In 2018, net revenues stood at $2.5 billion over $3.8 trillion over 2017, reflecting stable operating revenues and investment markets volatility. Capital expenditure amounted to 3.4 billion dollars in 2018, down from 3.3 billion dollars in 2017.
   
3. Major resources and competencies
   They emphasize research that can influence our care within and beyond our systems, including clinical research and research into health systems. They provide expertise in study design, data management, analysis, and statistical methodology to make health information workable. The teams are involved in biological statistics and clinical information. Departmental and regional researchers have access to rich resources from a data warehouse to lab services and clinical research space. Dedicated personnel have experience in supporting a wide range of projects, starting with data-only studies and qualitative research.
   
4. Internal value chain
   Value Chain - They are a health insurance company that has integrated forward in the value chain by delivering health care services through hospitals, medical clinics, and physicians. The hospital Kaiser Permanente is one of the largest healthcare delivery system in the US which practices vertical integration. It has contributed to the merger of healthcare companies upwards, the business units established within this corroboration become internal suppliers and practice domestically. vertical integration has aided the hospital to gain comparative advantage and advance their efficiency to offer health insurance at a cheaper cost compared to their counterparts. The discrete storage locations holding stocks of inventories are maintained by the hospital. it is internal because being vertically integrated has aided the hospital to acknowledge it's purchases and balance its inventory levels.