Oakland-Based HMO Kaiser Permanente Posts 16% Increase in Profit in 2001
Oakland-based Kaiser Permanente today announced that profit rose 16% last year, as a result of increased premiums and "operational efficiencies," the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 3/1). In 2001, Kaiser reported a net income of $681 million, up from $584 million in 2000. The HMO also reported that revenue rose from $17.7 billion in 2000 to $19.7 billion in 2001, an 11% increase (Wall Street Journal, 3/1). The 2001 results mark the second consecutive year that Kaiser has reported increased earnings, after the HMO reported losses from 1997 to 1999. In 1998, Kaiser posted a net loss of $288 million. Kaiser officials attributed the improved numbers to premium increases -- the HMO has raised rates an average of 10% per year -- additional copayments and more efficient operations. In addition, a decrease in membership growth, which has dropped to a "manageable" 2% from 4% to 6% "a few years ago," has helped the HMO, according to Dale Crandall, president of Kaiser's health plans and hospitals. Kaiser yesterday also reported $187 million in net income and $198 million in operating income on revenue of $5 billion for the fourth quarter of 2001, up from $105 million in net income and $111 million in operating income on revenue of $4.6 billion a year earlier. Peter Boland, an industry analyst for Boland Healthcare, said, "It looks like they (Kaiser) are on solid footing, and it looks like that's not going to change in the next couple of years" (San Francisco Chronicle, 3/1).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.