OAKLAND, Calif., July 30 /PRNewswire/ -- Through the second quarter of 2004, Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals (KFHP/H) and their subsidiaries continued on track with solid financial performance, reporting an operating margin of 5.4 percent, down slightly from the first quarter of 2004.
“By being financially prudent, we are able to continue investing in technologies and facilities to better serve the health needs of Kaiser Permanente members and communities in which they live,” said Chairman and CEO, George Halvorson.
“Being a not-for-profit allows us to focus solely on using our revenues to provide convenient, quality and affordable health care,” Halvorson said. “Our goal is simple: to enable people to thrive by partnering with them to maximize their health at every stage of their life.”
Through June 30, 2004, KFHP/H reported an operating margin of 5.4 percent for the first six months of the year. This is down from the 5.6 percent margin reported through the first quarter of 2004. Operating revenues for the first six months totaled $13.9 billion. Net income was $832 million and operating income totaled $746 million. Membership remained flat at about 8.2 million.
“The moderation in operating margin is consistent with historical patterns and the trend can be expected to continue through the remainder of the year,” said Chief Financial Officer, Robert Briggs. Traditionally, first quarter results are the strongest, in part, because most rate increases go in effect in January while cost increases occur throughout the year.
For the first six months of 2003, the operating margin was 4.8 percent on operating revenues totaling $12.5 billion. Net operating income was $606 million and net income was $607 million.
Briggs said the increase in net income for the first six months of 2004 over 2003 “is due to several factors, including smaller than anticipated increases to date in pharmaceutical costs, pricing and an $85 million increase in net non-operating income, driven by improved realized returns on our investments.”
The continuing solid financial performance allowed the organization to increase its capital spending by 36 percent in the first six months of 2004.
Through June 30, 2004, KFHP/H invested $816 million in capital projects, up from $599 million through the same period last year.
Halvorson said, “This continued solid financial performance will fund long-term capital needs, seismic retrofitting, facility improvements, community benefit programs and KP HealthConnect, our new electronic physician support tools. These investments are key to improving the care and health of our members and the communities we serve.”
For the second quarter of 2004, the operating margin was 5.2 percent; net income was $401 million and operating income $361 million on operating revenues of $7 billion. That compared to an operating margin of 4.7 percent, operating revenues of $6.3 billion, operating income of $298 million and net income of $306 million for the second quarter of 2003.
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, their subsidiaries and the for-profit Permanente Medical Groups.
Nationwide, Kaiser Permanente includes approximately 136,000 technical, administrative and clerical employees and over 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; changing membership requirements, and the change in economic conditions of the various markets the organization serves.
http://www.kaiserpermanente.org/
Kaiser Permanente
CONTACT: Mike Lassiter of Kaiser Permanente, +1-510-271-5953 ormike.lassiter@kp.org
Web site: http://www.kaiserpermanente.org/
