News release: Colorado - Denver/Boulder

February 28, 2000

For more information, call:
Steve Krizman
Kaiser Permanente
Phone: (303) 344-7932
E-mail: Steve.A.Krizman@kp.org

Kaiser Permanente finishes 1999 in the black

Denver, CO – Kaiser Permanente's Colorado region on Monday reported net income of $21.3 million on revenues of $792 million in 1999.

That compares to a loss of $10.6 million in 1998, the first time the Colorado region had been in the red since its start-up years in the early 1970s. The financial turnaround was the result of a combination of cost savings and rate increases.

"It was a challenge to meet our financial goals last year, at a time when prescription drug costs and demand for expensive treatments continued to increase," said Chris Binkley, president of the Colorado region. "But our people took the challenge seriously and found new efficiencies that did not reduce health care services, and in some cases improved care."

For example, more patients with chronic diseases such as asthma and diabetes received extra attention from specially trained nurses. This "disease management" approach has maintained patients' health so they don't require more aggressive treatments or hospitalizations.

Objective measurements indicate the turnaround efforts did not impact quality and service. The organization achieved its highest-ever patient satisfaction numbers in 1999, and its quality of care scores ranked among the top 10 percent in the nation.

Rate increases in 1999 were designed to more fairly spread the cost of health care among the organization's membership.

Nationally, Kaiser Permanente reported today a net loss of $6 million on revenues of $16.8 billion. That was a significant improvement on 1998, when the entire program reported a net loss of $288 million. If you exclude one-time expenses such as the cost of divesting operations in the Northeast and North Carolina, Kaiser Permanente realized a net income of $466 million in 1999.

Kaiser Permanente, a nonprofit organization, needs to generate just enough surplus revenues to finance new equipment and facilities. For-profit health insurance companies typically do not own medical offices; their profits go to investors.

Kaiser Permanente is the oldest health maintenance organization in Colorado, and cares for 359,000 members in the Denver/Boulder metropolitan area and in Colorado Springs.