Kaiser Earnings Rise 27%

Health insurer Kaiser Permanente said Thursday that its first-quarter profit jumped almost 27% as it reversed a year-earlier loss of members.

Oakland-based Kaiser, the nation’s largest nonprofit health maintenance organization, reported net income of $552 million for the three months ended March 31, up from $435 million during the same period last year. Revenue rose more than 11% to $7.7 billion.

The company also said it added 96,500 members during the quarter, bringing its membership to more than 8.3 million people. During the same period last year, Kaiser lost 12,700 members.

“The growth in membership reflects a marketplace that values Kaiser Permanente’s dedication to better-quality care, greater convenience, better access and affordability and an emphasis on health,” said George C. Halvorson, chairman and chief executive of privately held Kaiser.

Halvorson added that the introduction of products, such as a health savings account linked to a high-deductible plan and a credit card issued to members to cover deductibles, was helping to fuel membership growth.

Kaiser is in the midst of a more than $21-billion expansion program, which includes construction of 25 new or replacement hospitals.

More than half of the projects will be underway by next year, and building will continue for the next six years.

During the first quarter, capital spending rose 15% from a year earlier to $379 million.

This week, Kaiser Permanente reported that for 2004, net income increased 59% from the previous year to $1.61 billion as a result of higher fees and lower costs.