News release: Colorado - Denver/Boulder

August 15, 2003

For more information, call:
Jacque Murphy Montgomery
Kaiser Permanente
Phone: (303) 344-7410
E-mail: Jacque.Montgomery@kp.org

Kaiser Permanente second quarter finances remain strong

Denver, CO – Kaiser Permanente's revenues exceeded expenses by $19.7 million in the second quarter, on revenues of $340.6 million.

Because Kaiser Permanente is a nonprofit organization, net income is reinvested in the organization to benefit members. The money is used to finance improvements in technology, equipment and facilities.

"We had a solid second quarter," said Rick Newsome, vice president of finance.

"We continue to see good results from many of our first-quarter initiatives, containing outside medical costs and appropriately managing our staffing levels."

He noted that although net membership has been flat most of the year, Kaiser Permanente has added new employer groups and 33,000 new enrollees to its membership total through the second quarter of 2003. The membership losses are mostly the result of downsizing within the health plan's existing employer groups. "Because of the value we offer, we're actually holding our own in a very tough economy," Newsome said.

He cautioned that Kaiser Permanente will feel a financial impact from the demise of Colorado's auto no-fault insurance laws. But he added that the health care organization is not planning to increase its rates as a result of these additional expenses.

"We're well aware of the cost pressures being felt by our employer groups," Newsome said. "We will manage and improve our expense trends within the organization and do our share not to pass any more costs onto our employer groups this year."

Kaiser Permanente is a non-profit health care organization that cares for more than 400,000 members in the six-county Denver metro area and in Colorado Springs. Its scores for clinical effectiveness placed it among the top 15 health plans in the nation, according to the National Committee for Quality Assurance's annual Health Care Quality Report. In the Denver metro area, care is provided by a coordinated team of physicians, nurses, pharmacists, dietitians, mental health counselors and physical therapists. In the Colorado Springs area, Kaiser Permanente cares for its members through an affiliated network of community-based physicians and other health care providers.