News release: Colorado - Denver/Boulder

August 16, 2004

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

Kaiser Permanente finances thrive in second quarter

Denver, CO – Kaiser Permanente's income exceeded expenses by $31.2 million in the second quarter of 2004, on total revenues of $356.9 million.

"We've performed better than forecast in the second quarter," said Rick Newsome, vice president of finance. "While we didn't generate any more revenue than expected, we did a better job of controlling our expenses, especially our outside medical costs."

Newsome cited several other factors contributing to the organization's financial health. A recent change in federal law on pension funding requirements will save Kaiser Permanente $5 million this year. The organization also benefited from a reassessment by the state for funding Cover Colorado, a program for the uninsured, as well as the sale of property in the Chatfield area.

In addition, Newsome pointed out that the state's new auto no-fault insurance law, which went into effect July 2003, has not yet had as much financial impact as originally anticipated.

Kaiser Permanente is a non-profit health plan whose net income is reinvested to benefit members by financing improvements in medical offices and technology. One major investment is a state-of-the-art computerized medical record and administrative system, which began rolling out this month. The organization also is building a multi-specialty medical office in Lafayette to better serve its patients in the north, as well as new medical offices in the south at Highlands Ranch and Ken Caryl.

Spending on these initiatives will accelerate in the second half of 2004. But Newsome said the company is doing a good job of keeping staffing levels in line with the initiatives' demands, while remaining consistent with membership growth. Still, the organization will need to cut the rate of spending growth to remain financially viable in the future and to make health care more affordable for its members.

"We know health care still costs too much," Newsome said.

Kaiser Permanente is a nonprofit health plan and the largest private health care provider in Colorado. It is rated among the top ten accredited health care organizations in the country for clinical quality by the National Committee for Quality Assurance. Kaiser Permanente cares for more than 418,000 members in the Denver/Boulder and Colorado Springs areas. Kaiser Permanente physicians and care teams focus on prevention as well as curing disease, all in an effort to help patients live well and thrive.