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Kaiser Foundation Health Plan and Hospitals Report Second Quarter 2009 Financial Results
Date:8/7/2009

OAKLAND, Calif., Aug. 7 /PRNewswire/ -- Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and their subsidiaries (KFHP/H) reported today a combined total operating revenue of $10.5 billion for the quarter ended June 30, 2009, compared to $10.1 billion in the second quarter of last year. Operating income in the second quarter was $411 million, versus $499 million in the second quarter of last year. Net non-operating income was $209 million in the second quarter, compared to a net non-operating loss of $148 million in the second quarter of last year. As a result, second quarter net income was $620 million, versus $351 million in the second quarter of last year. These represent the combined operating results for Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and their subsidiaries.

For the six months ended June 30, 2009, total operating revenue was $21.1 billion, compared to $20.2 billion in the same period last year. Year-to-date operating income was $1.0 billion, which is equivalent to the operating income reported in the same period last year. Net non-operating income was $15 million in the first six months of the year, compared to a net non-operating loss of $443 million in the same period last year. As a result, year-to-date net income was approximately $1.1 billion, versus net income of $601 million in the same period last year.

Total membership declined by nearly 36,000 members and remained at approximately 8.6 million in the first six months of the year. Capital spending totaled approximately $1.1 billion in the year-to-date period, which is comparable to the capital spending reported in the same period last year.

"We are pleased with our performance in this difficult economy, but we remain cautious about the significant challenges that lie ahead. Results for the first six months of the year are historically the strongest, in part due to new premium rates taking effect in the early part of the year, while costs rise throughout the year. Amid mixed signals of economic recovery, we are working to address the significant changes taking place in the health care environment by operating even more efficiently," said Executive Vice President and Chief Financial Officer Kathy Lancaster. "In addition, we are preparing for the reduction in Medicare Advantage reimbursement rates that will occur in 2010, as well as for the changes that health care reform will bring. With high unemployment levels throughout the nation, we are also strengthening our efforts to retain and grow our membership."

"As we face these challenges, we remain committed to providing high-quality, affordable care to our members," added Chairman and Chief Executive Officer George Halvorson. "Leveraging our integrated care delivery system and our health information technology platform and tools has helped us achieve big gains in areas such as heart attack survival and breast cancer screening, as well as lower rates of hip fractures. We are continuing to enhance our care quality and service while making progress in managing our cost trends and premiums more effectively. We expect to make even greater progress in the future."

KFHP/H continued to broaden Kaiser Permanente HealthConnect(R), the world's largest civilian electronic health record, during the second quarter of 2009. A key part of KFHP/H's information technology platform and tools, KP HealthConnect provides clinical information, coordination, and support for all members, physicians, and other care providers in all care settings. Implementation of KP HealthConnect for all outpatient care was completed last year, and as of the end of the second quarter of this year had been implemented in 28 of 35 hospitals. All Kaiser Permanente members can access their personal health information online securely through My Health Manager on kp.org, and currently send an average of 700,000 electronic messages each month, an increase of 35 percent from the second quarter of 2008, to their Kaiser Permanente physicians, nurses, and other clinicians using the system. During the second quarter of 2009, members refilled more than 1.6 million prescriptions through kp.org, a 17 percent increase from the second quarter of last year.

As not-for-profit organizations, KFHP/H also use resources to support a wide range of community benefit programs that provide care for low-income individuals and support community-based health partnerships, research, training, and community health organizations. In the second quarter of 2009, KFHP/H approved more than 700 grants and donations to support the needs of its communities. Last year, KFHP/H provided nearly $1.2 billion in annual support to community benefit programs and services which included grants to 2,414 organizations. Given the recession's impact on the economically vulnerable, KFHP/H also continued to expand charitable care and coverage programs in the second quarter.

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 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.


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