KAISER PERMANENTE: Reports 1999 Profit, Expects Rate Hike
Oakland-based Kaiser Permanente, a not-for-profit HMO, Monday reported a 1999 profit of $311 million, excluding losses accrued from operations sold during the year. Company officials attributed the turnaround from 1998's $434 million loss to the sale of money-losing plans and improved performance by its largest California unit. Kaiser Permanente CFO Dale Crandall said, "We're in the early stages of a three-year turnaround program," but he cautioned that the HMO "still [has] a long way to go." Total revenue rose from $15.5 billion in 1998 to $16.8 billion in 1999, and while California membership increased, unit sales and membership losses in other states caused a 2.5% decline in overall membership. Kaiser Permanente's health plan rates rose by more than 10% on average last year and are expected to jump as much as 8.5% in 2000. Officials also predicted a total revenue increase this year of 8%, which will be largely offset by a 6% growth in costs. The HMO's California operation had an operating income of $280 million last year -- a huge reversal from 1998's operating loss of $354 million -- thanks to tighter control over operating expenses at state hospitals (Mitchell, ANG Newspapers, 2/29).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.