KAISER PERMANENTE II: Profit Rise Means Smaller Premium Hikes
While Kaiser Permanente's increase in first-quarter profit could "pave the way for lower premium hikes" in 2001, company officials said most of that money will be put in reserve to keep the HMO healthy. Officials contend that tying premium increases to financial performance is not that simple. Kaiser spokesperson Beverly Hayon said, "Many factors go into setting rates. Our ability to have a sustainable operation is part of that." In addition to the company's financial outlook, other factors including long term initiatives play a role in determining premium hikes. Kaiser Chair and CEO Dr. David Lawrence said, "Major investments in new technologies will be required for clinical information and online strategies for members. We must guarantee a stable financial footing for the long term future of Kaiser Permanente." Hayon indicated that rates "will probably increase" for 2001, but not at the level seen in recent years. The HMO also will use some of the income to ensure that all Kaiser hospitals and clinics comply with the state's seismic standards slated to take effect in 2008 (Mitchell, Alameda News Group, 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.