Kaiser Reports Sharp Rise in First-Half Net Earnings
Kaiser Permanente reported a second-quarter operating income of $877 million, up from $198 million in the second quarter of 2006, the Contra Costa Times reports (Contra Costa Times, 8/8).
The HMO's net income for the first half of 2007 was $1.82 billion, compared to $720 million during the same period last year.
Kaiser officials attributed the increase in earnings to:
- A $356 million reduction in reserves for professional liability and workers' compensation costs; and
- Contract renewals that took effect in January (Gonzalez, Business Insurance, 8/6).
Tom Meier, Kaiser's corporate treasurer, said, "We believe the results of this quarter will allow us to moderate future rate increases" (Contra Costa Times, 8/8).
However, Kathy Lancaster, executive vice president and CFO of Kaiser, said, "Our second-quarter operating results are an anomaly, and we do not expect this level of earnings to continue throughout the remainder of the year" (Business Insurance, 8/6). 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.