OAKLAND, Calif., May 5 /PRNewswire/ -- A growth in membership and a strong financial performance marked the first-quarter 2005 performance for Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals and their subsidiaries (KFHP/H).
After adding 30,000 new members in the fourth quarter of 2004, Kaiser Permanente added another 96,500 new members in the first three months of 2005, to raise total enrollment to more than 8.3 million members nationwide.
For the quarter ending March 31, 2005, an operating margin of 6.4 percent was achieved on operating revenues of $7.7 billion. Net income was $552 million, and operating income totaled $492 million.
“The growth in membership reflects a marketplace that values Kaiser Permanente’s dedication to better-quality care, greater convenience, better access and affordability and an emphasis on health. Prudent spending and sound financial performance enable Kaiser Permanente to deliver on that promise,” said KFHP/H Chairman and CEO George C. Halvorson.
Fueling membership growth, in part, is the introduction of new product options plans for accessing Kaiser Permanente care, Halvorson said.
“As a nonprofit organization, our operating income is reinvested in serving the health needs of our patients, members and communities,” Halvorson said, “This kind of financial performance will fund long-term capital needs, seismic retrofitting, facility improvements and KP HealthConnect, our new electronic physician-support tools.”
Kaiser Permanente also uses its operating revenue to fund wide-ranging community benefit programs aimed at improving the health of communities through research, community-based health partnerships, direct health coverage for low-income families and collaborations with community clinics, health departments and public hospitals.
“Operating revenues for the first quarter were up 11.7 percent over the same period last year, while operating expenses increased by 10.8 percent,” said Kathy Lancaster, senior vice president of strategic planning and acting chief financial officer.
“The first quarter results are traditionally the strongest,” Lancaster said, “in part because most rate increases go into effect in January, while cost increases occur throughout the year.”
“Sufficient margins to meet our capital needs are important as we experience rising construction costs,” Lancaster said. Capital spending was $379 million in the first quarter, up 15 percent over the same period last year.
Kaiser Permanente has 25 new or expanded hospitals either planned or under construction, including 13 of which are seismic-replacement hospitals required by the State of California. Seven are new hospitals, and five are expansions of existing hospitals to accommodate growth. More than half of the construction projects will be under way by the end of 2006. The total capital project cost for Kaiser Permanente is expected to be over $21 billion through 2012 for hospitals, medical office buildings, other facilities and technology improvements.
Implementation of KP HealthConnect, Kaiser Permanente’s state-of-the-art electronic medical record system, is under way and will be fully deployed nationwide over the next three years. This initiative involves the development and deployment of an integrated nationwide information system that combines patient records with best clinical practices, appointments, registration, and business systems. Through this advanced technology, Kaiser Permanente will eliminate the inefficiencies and reduce the error rate of paper-based systems.
“KP HealthConnect is key to improving the quality of care members receive and making them true partners with their physician and the rest of their care team in monitoring, maintaining and improving their health,” Halvorson said. “Every major policy leader in health care is promoting the benefits of electronic medical records, and Kaiser Permanente is leading the way forward making that a reality.”
Kaiser Permanente’s success in meeting the needs of its members is the result of “its dedicated physicians, nurses, caregivers, technical, administrative and clerical staffs,” Halvorson said. “Our labor management partnership is also one of the major factors that set us apart in addressing the health needs of our members and communities.”
For the first quarter of 2004, operating revenues totaled $6.9 billion. Net operating income was $390 million and net income was $435 million. Operating margin was 5.6 percent.
Kaiser Permanente is America’s leading integrated health plan. Founded in 1945, it is a nonprofit, group practice prepayment program with headquarters in Oakland, California. Kaiser Permanente serves the health care needs of 8.3 million members in 9 states and the District of Columbia. Today it encompasses the nonprofit Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries, and the for-profit Permanente Medical Groups. Nationwide, Kaiser Permanente includes approximately 140,000 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; changing membership requirements, and the change in economic conditions of the various markets the organization serves.
Kaiser Permanente
CONTACT: Mike Lassiter of Kaiser Permanente, +1-510-271-5953
Web site: http://www.kaiserpermanente.org/