Kaiser Shows a Profit of $584 Million in 2000
HMO giant Kaiser Permanente said Wednesday it posted a profit last year by cutting costs and raising premiums.
Net income was $584 million in 2000, compared with a loss of $6 million the year before, Kaiser said. Revenue rose 5.4% to $17.7 billion from $16.8 billion. Kaiser reported operating income of $562 million for the year ended Dec. 31.
Oakland-based Kaiser, the largest nonprofit HMO in the U.S., has been in the midst of a turnaround that was put in place in early 1999 after having lost more than $500 million in 1997 and 1998. Since then, the nonprofit HMO has cut administrative costs, raised premiums and dropped unprofitable business to rebound from the losses. The HMO also has focused on managing patient care, a practice that let it control costs and improve outcomes. Kaiser also said a five-year agreement signed with the AFL-CIO in September will make its labor costs more predictable.
“Although we have made great progress, we are still in a turnaround and have yet to fully meet our financial targets,” said Kaiser President Dale Crandall.
In California, Kaiser has extricated itself from expensive contracts with outside hospitals and refocused its efforts on its core HMO operations.
The Oakland-based HMO, with 8.1 million members in 11 states, added 133,000 members last year. Kaiser includes Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals and doctors in the Permanente medical groups.
At a Glance
Other California company earnings, excluding one-time gains and charges unless noted:
* Longs Drug Stores Inc. said its fiscal fourth-quarter profit rose 3%, beating analysts’ estimates. The beleaguered drugstore chain once again blamed weak sales, increased competition and a sluggish U.S. retail climate for its woes.
The Walnut Creek-based company, which operates 431 stores in the Western United States, said its net income for its fourth quarter, excluding one-time charges, was $23.4 million, or 63 cents a diluted share, compared with $23.9 million, or 61 cents a diluted share, in the year-ago period.
Wall Street analysts polled by First Call/Thomson Financial had on average expected the retailer to post a quarterly profit of 56 cents a share. Sales for the quarter were $1.11 billion, compared with sales of $1.05 billion a year ago.
