News release: National

May 7, 2003

For more information, call:
Beverly Hayon
Kaiser Permanente
Phone: (510) 271-5953
E-mail: Beverly.Hayon@kp.org

Kaiser Permanente: Stable 1st Quarter

Oakland, CA – Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals and their subsidiaries (KFHP/H) reported net income of $301 million, and operating income of $308 million on operating revenues of $6.2 billion for the first quarter ended March 31, 2003. In the first quarter of 2002 KFHP/H posted net income of $297 million and operating income of $288 million on operating revenues of $5.5 billion. Membership as of March 31, 2003, is over 8.3 million members.

"We are pleased that despite uncertainty and a weak economy we are able to maintain our positive financial position," stated Robert Briggs, KFHP/H chief financial officer. "We continue to pay close attention to marketplace forces to make sure we meet the challenges of health care and maintain our long-term financial viability."

"We have begun the process that will result in the full implementation of the automated medical record system that we announced earlier this year," said George Halvorson, chairman and CEO of KFHP/H. "I remain convinced that this system will revolutionize the way we deliver health care to our members, improve the work environment of our physicians and employees, and keep us in the forefront of American health care."

Kaiser Permanente continues to be recognized for a variety of accomplishments in the health care arena. In April, eighteen Kaiser Permanente facilities were singled out for exemplary accomplishments from Hospitals for a Healthy Environment (H2E). Kaiser Permanente also received an additional environmental award from the Healthy Building Network for accelerating the transformation to healthier building materials through purchasing policies and actions. Among those accomplishments were installing over 50 acres of reflective roofing, preventing more than 70 million pounds of air pollutants annually, and eliminating the purchase and disposal of 40 tons of hazardous chemicals.

In February, Kaiser Permanente introduced to the public a collaboration of Kaiser Permanente's Care Management Institute and the Alzheimer's Association a program designed to specifically address the special needs of those with Alzheimer's disease and other dementias. The program provides recommendations to primary care providers, nurses and social workers on the proper screening, diagnosis, treatment and management of dementia patients. It also recommends ways to support families and has been called "…a model for the 21st century" by Sheldon Goldberg, president and CEO of the Alzheimer's Association.

Kaiser Permanente is America's leading integrated health plan. Founded in 1945, it is a non-profit, group practice prepayment program with headquarters in Oakland, California. Kaiser Permanente serves the health care needs of over 8.3 million members in 9 states and the District of Columbia. Today it encompasses Kaiser Foundation Health Plan, Inc.; Kaiser Foundation Hospitals and their subsidiaries; and the Permanente Medical Groups, as well as an affiliation with Group Health Cooperative based in Seattle. Nationwide, Kaiser Permanente includes approximately 134,000 technical, administrative and clerical employees and 11,000 physicians representing all specialties.

Except for historical information contained herein, the matters discussed in this media release are forward-looking statements that involve risks and uncertainties. Actual results may vary significantly based on a number of factors including, but not limited to: the impact of competitive products and pricing; changing membership, regulatory requirements, and the change in economic conditions of the various markets the organization serves.