Kaiser Foundation Health Plan and Hospitals Report Third Quart...( OAKLAND Calif. Nov. 4 /- Kaiser F...),Health

OAKLAND, Calif., Nov. 4 /PRNewswire/ -- Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries (KFHP/H) reported total operating revenue of $10.2 billion for the quarter ended September 30, 2008, compared to $9.4 billion in the same period last year.

KFHP/H's operating income in the third quarter was $307 million, compared to $449 million in the same quarter last year. Financial market volatility impacted KFHP/H's investment portfolio in the third quarter, resulting in a net non-operating loss of $706 million versus net non-operating income of $205 million in the same quarter last year. As a result, net income in the third quarter declined, resulting in a loss of $399 million versus net income of $654 million in the same period last year. The current economic environment, particularly declining employment, contributed to a slight enrollment loss for the quarter. Total membership, as of the end of the third quarter, was more than 8.6 million members.

Capital spending was $682 million in the quarter ended September 30, 2008, increasing slightly from $641 million in the same quarter last year. KFHP/H opened or expanded four new medical office buildings in Southern California in the third quarter of this year to meet the expanding needs of our members.

"We are pleased with our positive operating results, given the deteriorating U.S. economic environment," said Executive Vice President and Chief Financial Officer Kathy Lancaster. "Like other investors, however, we have not been immune to the extraordinary volatility in the financial markets and are monitoring market developments closely. Our balance sheet and cash position remain solid despite these challenges, and our operating performance allows us to make prudent investments that enhance and expand our health care programs, services and infrastructure."

Total operating revenue for the nine months ended September 30, 2008, was $30.3 billion, increasing
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