Kaiser Permanente 2000 Financial Status Prompts Credit Ratings Upgrade
For the first time in four years, Kaiser Permanente, California's largest HMO, posted positive financial results in 2000, prompting Standard & Poor's to boost the HMO's credit rating, the Sacramento Bee reports. According to a report released yesterday, Kaiser Permanente had a net income in 2000 of $584 million and operating income of $562 million on revenues of $17.7 billion. The Oakland-based HMO said the results are a sign that the company's turnaround plan, implemented after "massive losses" in the 1990s, is "on track." Dale Crandall, president of Kaiser Foundation Health Plan and Hospitals, said, "We've made progress. It will still be a challenge every year to make sure we're managing costs as much as possible, but the turnaround plan is moving forward." Expressing "confidence" in Kaiser's ability to maintain its recent financial improvements, Standard & Poor's yesterday announced a stable outlook on Kaiser's A-rated bonds. In January, Moody's Investor Service also gave a stable rating to Kaiser's A3-rated bonds. The Bee reports that the ratings upgrades "set Kaiser apart from other hospitals in California and around the country." At least 10 California hospitals had their credit ratings downgraded last year. According to Standard & Poor's, in 1999, bond downgrades exceeded upgrades of hospitals nationwide by five to one (Rapaport, Sacramento Bee, 4/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.