KAISER PERMANENTE: HMO’s Profits Triple After Premium Increase
Kaiser Permanente announced Monday that its first quarter profit "almost tripled" after the not-for-profit HMO "raised premiums and left the unprofitable Northeastern region," Bloomberg News/Los Angeles Times reports. Although Kaiser lost money in its mid-Atlantic region, its California Division, which has 75% of its members, added an additional 52,000 customers and posted operating income of $164 million. Overall, Kaiser reported a net income of $142 million in the first quarter, compared to $61 million reported from last year's first quarter. "These results are evidence that our strategies for operational improvement are taking effect and generating needed financial performance," Kaiser President Dale Crandall said. The Oakland-based health care plan, the nation's largest not-for-profit HMO, said it boosted its revenue by raising premiums an average of 10% this year. But the company noted that costs in the health care industry, specifically prescription drugs, "continue to increase significantly throughout the U.S." Due to poor financial performance, last year Kaiser pulled out of upstate New York, Massachusetts, Vermont, Connecticut and North Carolina (5/2).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.