Kaiser Foundation Health Plan Inc., the nonprofit company that operates Kaiser Permanente, said Friday that it lost $525 million in the fourth quarter of 2002 on revenue of $5.8 billion.
The Oakland-based integrated health-care system, which includes the health maintenance organization and Kaiser hospitals, blamed the loss on costs associated with a change in how it maintains medical records. In the same period in 2001, Kaiser reported net income of $187 million on $5 billion in revenue.
For the year, Kaiser had net income of $70 million on revenue of $22.5 billion. Excluding the medical-record adjustment, Kaiser would have reported net income of $512 million in 2002.
In 2001, Kaiser had earnings of $681 million on revenue of $19.7 billion. Kaiser said its 2002 performance also was affected by increased pension-related benefits and a decline in the value of its investment portfolio.
Kaiser said its net worth fell $470 million in 2002 because of a noncash adjustment in pension-liability funding. Kaiser said that as of Dec. 31, it had 8.4 million members in nine states, an increase of 115,000 over 2001.