Press Releases: National
October 31, 2003
Positive 3rd quarter results help Kaiser Permanente continue investments in improving health care
Focus on quality, construction, and new technology initiatives
OAKLAND, Calif. – Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals and their subsidiaries (KFHP/H), reported net income of $235 million and operating income of $251 million on operating revenues of $6.4 billion for the third quarter of 2003. By comparison, in the third quarter of 2002 KFHP/H posted net income of $137 million and operating income of $136 million on operating revenues of $5.6 billion.
Year-to-date, through September 30, 2003, KFHP/H reported net income of $842 million and operating income of $857 million on operating revenues of $18.9 billion. This is compared to year-to-date net income of $595 million and operating income of $592 million on operating revenues of $16.7 billion during the same period in 2002.
Membership as of September 30, 2003, was 8.2 million, a 1% decrease from 2002.
"During the 3rd quarter we've been able to build on the positive results set in the first half of the year, despite today's tough economic environment, as reflected in membership losses," stated Robert Briggs, chief financial officer of KFHP/H. "About a third of our year-to-date positive variance to last year is primarily due to favorable adjustments in claims reserves impacting current year results, and the fact that 2002 results were negatively affected by restructuring costs and software write-offs. This solid financial performance allows us to fund our ongoing need for capital expenditures in order to expand and upgrade our health care system in a way that will ultimately reduce the cost of health care for our members."
"Kaiser Permanente has embarked on a path that, we believe, will be a model for healthcare in the future. We are progressing well with the implementation of our automated medical records system and have made great advances in the construction of new hospitals and medical office buildings. In California alone we have two major medical centers currently under construction, two more medical centers in pre-construction preparation, another ready to break ground and three more medical centers slated for groundbreaking in 2004," stated George Halvorson, chairman and CEO of KFHP/H. "In order to accomplish all this we must be able to generate the funds that will pay for these investments which result in improved services for our members. Fortunately, as a non-profit health plan, we are able to use most of our income to make those care system improvements. Finally, by sharing our financial information publicly we show our commitment to being transparent. The public, and the employers who pay the bulk of health care coverage, deserve to know how we use our members' dues. We are proud of our record."
Kaiser Permanente's integrated health care system, providing patients with a team of clinicians to manage their care, track their progress, and prompt for preventive screenings received an impressive number of awards and accolades during the 3rd quarter. Among them:
- Six Kaiser Permanente regions were awarded top national and regional ratings in the National Committee for Quality Assurance's 2003 State of Health Care Quality Report.
- The Disease Management Association of American (DMAA) has awarded Kaiser Permanente the American Healthways Health Plan Disease Management Leadership Award, the most sought-after award for managed care organizations.
- For the 7th straight year, no other health plan has earned higher ratings from the California Cooperative Healthcare Reporting Initiative (CCHRI) than Kaiser Permanente in Northern and Southern California.
- In a random survey of University of California employees KP came in first out of five categories for member satisfaction.
- The Quality of Care Report Card from the Office of the Patient Advocate has rated Kaiser Permanente's Northern California region the highest of any HMO in five categories.
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.
About Kaiser Permanente
Kaiser Permanente is committed to helping shape the future of health care. We are recognized as one of America’s leading health care providers and not-for-profit health plans. Founded in 1945, our mission is to provide high-quality, affordable health care services and to improve the health of our members and the communities we serve. We currently serve 8.6 million members in nine states and the District of Columbia. Care for members and patients is focused on their total health and guided by their personal physicians, specialists and team of caregivers. Our expert and caring medical teams are empowered and supported by industry-leading technology advances and tools for health promotion, disease prevention, state-of-the art care delivery and world-class chronic disease management. Kaiser Permanente is dedicated to care innovations, clinical research, health education and the support of community health. For more information, go to: www.kp.org/newscenter.
