Kaiser Health Plan And Hospitals Report Strong Financial Performance And Increased Investment In Improving Care
Published: Nov 04, 2004
OAKLAND, Calif., Nov. 3 /PRNewswire/ -- Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals (KFHP/H) and their subsidiaries today reported continued strong financial performance through the third quarter of 2004, making possible increased funding of facilities and technologies to better serve the health needs of its membership.
"This solid financial performance coincides with the successful beginning deployment of KP HealthConnect, Kaiser Permanente's $3 billion electronic medical record system, the largest of its kind in private healthcare," said Chairman and Chief Executive Officer George Halvorson. "KP HealthConnect promises to be a major step forward in partnering with patients, physicians and the rest of our care team to maximize individuals' health at every stage of their lives."
For the nine months ended September 2004, capital spending increased 47 percent over the same period last year. In the third quarter of 2004 alone, capital spending was up 66 percent over the third quarter of 2003. Capital investment totaled $1.4 billion through the third quarter of 2004 compared to $945 million for first nine months of 2003.
"We expect to continue to increase capital spending as we end the year," said Chief Financial Officer Robert Briggs. "We anticipate capital spending for the year will total over $2 billion."
"As a not-for-profit organization, our prudent financial performance translates directly into increased investment in providing the care, convenience, services and quality that enables our members to thrive," Halvorson said. "It also enables us to invest in improving the health of communities we serve through direct health coverage and care for low-income families and partnerships with safety net organizations such as community clinics, health departments and public hospitals." In addition, Kaiser Permanente contributes to the community through technical assistance, research, education, workforce development and extensive employee involvement in community programs.
For the nine months ended September 2004, KFHP/H reported an operating margin of 5.7 percent, compared to 4.5 percent for the same period a year ago.
For the quarter ended September 30, 2004, KFHP/H reported net income of $466 million and operating income of $456 million on operating revenues of $7.0 billion. For the quarter ended September 30, 2003, KFHP/H reported net income of $235 million and operating income of $251 million on operating revenues of $6.4 billion.
"Net income continues to be driven by many factors, including pricing, increased net nonoperating income from improved realized returns on our investments, and favorable pharmaceutical costs," said CFO Briggs.
For the nine months ended September 30, 2004, net income was $1.3 billion and operating income was $1.2 billion on operating revenues of $20.9 billion. This compares to net income of $842 million and operating income of $857 million on operating revenues of $18.9 billion for the same period last year.
Membership for the nine months ended September 2004 remained flat at 8.2 million.
About Kaiser Permanente
Kaiser Permanente is America's leading integrated health plan. Founded in 1945, it is a not-for-profit, group practice prepayment program with headquarters in Oakland, California. Kaiser Permanente serves the health care needs of 8.2 million members in 9 states and the District of Columbia. Today it encompasses the not-for-profit Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries, and the for-profit Permanente Medical Groups.
Nationwide, Kaiser Permanente includes approximately 138,000 technical, administrative and clerical employees and caregivers, and more than 11,000 physicians representing all specialties.
Except for historical information contained herein, the matters discussed in this media release are forward-looking statements that involve risks and uncertainties. Actual results may vary significantly based on a number of factors including, but not limited to: the impact of competitive products and pricing; government regulations; health care legislation; litigation; changing membership requirements, and the change in economic conditions of the various markets the organization serves.
CONTACT: Mike Lassiter of Kaiser Permanente, +1-510-271-5953, orMike.Lassiter@kp.org
Web site: http://www.kaiserpermanente.org/