Press Releases: National
August 4, 2008
Kaiser Foundation Health Plan and Hospitals' Second Quarter Results Enable Investments in Health Programs and Infrastructure
OAKLAND, Calif. – Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries reported total operating revenue of $10.1 billion for the quarter ended June 30, 2008, compared to $9.4 billion in the same period last year. Operating income in the second quarter was $499 million, compared to $877 million in the second quarter of 2007, when a reduction in reserves for professional liability and worker's compensation contributed to the quarter's results.
Volatility in the financial markets impacted KFHP/H's investment portfolio in the second quarter, resulting in a net loss of $148 million in non-operating items versus a net gain of $248 million in the second quarter of 2007. Net income in the second quarter was $351 million versus $1.1 billion in the same period last year. Total membership remained flat at nearly 8.7 million members in the second quarter of this year.
"Though the difficult economic climate and turbulence in the financial markets dampened our second quarter results, our strong financial position enables us to continue making important investments in our integrated health care delivery system," said Executive Vice President and Chief Financial Officer Kathy Lancaster. "As we navigate the challenging economic environment, we are placing even greater emphasis on our ongoing effort to moderate expense trends and the rate of premium increases for our customers and members."
Capital spending for the second quarter totaled $628 million, compared to $627 million in the same quarter of 2007. KFHP/H continued to invest in its health programs and services, integrated health care system, technology and facilities to enhance the quality of the care and service it provides. "Our earnings allow us to support our capital spending program, which is needed to help us meet the growing and evolving needs of our members," said Chairman and Chief Executive Officer George Halvorson. "We recently opened a new hospital in Irvine, California, a hospital tower expansion in Moanalua, Hawaii, and are now focused on opening additional state-of-the-art facilities in the remainder of this year and next."
As a not-for-profit organization, KFHP/H also uses its earnings to support a wide range of community benefit programs, which provide direct health care coverage for uninsured families and support community-based health partnerships, and research and collaboration with community health organizations. A portion of KFHP/H's community benefit activities in the second quarter included the approval of more than 415 community benefit grants and donations. In 2007 KFHP/H provided more than $1 billion to support community benefit programs and services.
A leader in integrating technology in the delivery of health care, KFHP/H continues to expand its electronic health record project KP HealthConnect™. All Kaiser Permanente members can now securely access their personal health records online and communicate with their Kaiser Permanente physicians through My Health Manager on kp.org. This unprecedented access enables members and their physicians to make the best health care choices with improved quality, service and safety. "We are making rapid progress in becoming the world standard for electronic connectivity between members and patients," said Halvorson. "With two and a quarter million users now accessing My Health Manager online, I am pleased to say that our teams of physicians, nurses, caregivers and other health care professionals have passed another milestone in our goal to transform the way members choose and receive their health care. We like to point out that with our new electronic patient connectivity, we achieved millions of patient visits last year without our members expending one gallon of gas."
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.
