Following peers, Kaiser profits plunge

As FierceHealthFinance readers probably know, the last few weeks have been ugly for health plans, many of which announced disappointing first-quarter results. True, it's worth bearing in mind that most are still profitable, but on the other hand, their margins seem to be in freefall--something neither shareholders nor Wall Street take lightly. Many of the industry's big names are being hit by this trend, including UnitedHealth Group, Humana, Cigna, WellPoint and Health Net.

This week, Kaiser Foundation Hospitals and Health Plan joined the list of unfortunates, announcing that it saw a 64 percent drop in net income during the first quarter of this year compared to the same quarter last year. Profits plunged $698 million during the first quarter of last year to $250 million for the first quarter of this one. The descent includes a loss of $295 million in non-operating income for the first quarter of 2008 versus a $177 million profit during the first quarter of 2007, which it attributes to weakness in its investment portfolio.

Meanwhile, Kaiser increased net income from $521 million during the first quarter of last year to $545 million this year, a boost that includes the addition of 25,000 members. Operating income climbed from $9.4 billion during the first quarter of last year to $10.1 billion for the first quarter of this year. Furthermore, Kaiser said it provided more than $1 billion in community benefit during 2007.

To learn more about Kaiser's results:
- read this East Bay Business Times article
- read this Kaiser press release

PLUS:  Kaiser has announced that it's completed the rollout out of its immensely expensive outpatient electronic medical system, which cost the organization a cool $4 billion, executives said. Article

Related Articles:
UnitedHealth suffers financial setback
WellPoint profits fall 25 percent during first quarter
Cigna first-quarter profits drop 80 percent