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Kaiser Foundation Health Plan and Hospitals Report Fourth Quarter and Fiscal Year 2009 Financial Results
Date:2/12/2010

OAKLAND, Calif., Feb. 12 /PRNewswire/ -- Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries (KFHP/H) reported today a combined total operating revenue of $10.6 billion for the quarter ended Dec. 31, 2009, compared to $10.0 billion in the same period in 2008. Operating income was $214 million, equal to two percent of revenue, in the fourth quarter of 2009, compared to $108 million in the same quarter of the prior year. Net non-operating income was $276 million in the fourth quarter of 2009, compared to a net non-operating loss of $1.1 billion in the same quarter of 2008. As a result, net income for the fourth quarter was $490 million, versus a net loss of $996 million in the same period of 2008. These represent the combined operating results for Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries.

Operating income in 2009 is comparable to 2008 performance. Operating income for 2009 was $1.6 billion, equal to 3.8 percent of revenue, compared to $1.5 billion, equal to 3.6 percent of revenue, in 2008. The improvement in the financial markets resulted in net non-operating income of $524 million in 2009, compared to a net non-operating loss of $2.3 billion in 2008. As a result, net income for 2009 was $2.1 billion, versus a net loss of $794 million in the prior year.  While 2009 net income improved based on the partial financial market recovery, the overall performance of the past two years poses ongoing challenges, because KFHP/H uses net income to make investments in care delivery facilities and technology supporting our members, patients and the communities we serve.  

Capital spending in the fourth quarter of 2009 was approximately $900 million, compared to nearly $1.1 billion in the same quarter in 2008. Capital spending for 2009 was approximately $2.6 billion, compared to $2.9 billion in 2008. During the past year, KFHP/H opened three hospitals, including two seismic hospital replacements, one new hospital tower and 17 medical office buildings.

Total membership declined by approximately 64,000 members over the past year. As of Dec. 31, 2009, membership totaled 8.58 million members.

"We are pleased that our operating income remained stable despite the challenges of 2009. We are also pleased that our non-operating income benefited from the partial recovery of the financial markets, and returned to a level that more appropriately supports our investments in our care delivery infrastructure. Given the volatility in the financial markets and ongoing governmental actions related to Medicare Advantage payment rates, we are continuing to take prudent measures to manage our operations and investments in a responsible way," said Kathy Lancaster, executive vice president and chief financial officer.

Lancaster continued, "The increase in our net income for fiscal year 2009 is largely due to the improvement in the financial markets which enabled us to partially recoup our 2008 non-operating losses."

As not-for-profit organizations, KFHP/H devote resources to improve the health of our members and the communities we serve. Our community benefit investment supports a wide range of programs that provide care for low-income individuals, support community-based health partnerships, conduct research, train health care workers, and expand access to health care within the safety net. In 2009, KFHP/H provided approximately $1.7 billion, four percent of its operating revenue, in annual support to community benefit programs and services. Given the recession's impact on the economically vulnerable, KFHP/H made a concerted effort to expand charitable care and coverage programs and to fund programs designed to ensure access to healthy foods in hard times.

"We're encouraged to see that our positive performance enables us to continue to invest in our communities, and to enhance the quality of care and service we provide our members," said George Halvorson, chairman and chief executive officer. "In 2009, Kaiser Permanente expanded its community benefit programs to place an even greater emphasis on helping people in need get access to health care during these difficult economic times."

KFHP/H continued to broaden the availability of Kaiser Permanente HealthConnect®, the world's largest private electronic health record system. KP HealthConnect provides clinical information, coordination, and support for all members, physicians, and other care providers in all care settings. As of the end of the fourth quarter of 2009, KP HealthConnect was implemented in all Kaiser Permanente ambulatory environments. All Kaiser Permanente members can access their personal health information online securely through My Health Manager on kp.org. For example, during the fourth quarter of 2009 members used kp.org approximately one million times each week to check laboratory results, refill prescriptions, make appointments, communicate with their physicians, and conduct other health care-related activities.

My Health Manager also provides a secure e-mail capability for members to interact with their physicians. The number of e-visits has grown dramatically since My Health Manager launched in 2005—starting at 1.4 million in 2006, more than doubling to 3.6 million in 2007, growing to 6.1 million in 2008, and ending fiscal year 2009 with 8.6 million e-visits.  

"This is a testament to the high level of satisfaction that our members have with this innovative technology," said Halvorson. "The use of computers to support our quality care is appreciated by our members."

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 8.58 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.

SOURCE Kaiser Permanente

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