Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries (KFHP/H) reported total operating revenue of $10.1 billion for the quarter ended June 30, 2008, compared to $9.4 billion in the same period last year.
Operating income in the second quarter was $499 million, compared to $877 million in the second quarter of 2007 when a reduction in reserves for professional liability and worker's compensation contributed to the quarter's results.
Volatility in the financial markets impacted KFHP/H's investment portfolio in the second quarter, resulting in a net loss of $148 million in non-operating items versus a net gain of $248 million in the second quarter of 2007. Net income in the second quarter was $351 million versus $1.1 billion in the same period last year. Total membership remained flat at nearly 8.7 million members in the second quarter of this year.
"Though the difficult economic climate and turbulence in the financial markets dampened our second quarter results, our strong financial position enables us to continue making important investments in our integrated healthcare delivery system," said Executive Vice President and Chief Financial Officer Kathy Lancaster. "As we navigate the challenging economic environment, we are placing even greater emphasis on our ongoing effort to moderate expense trends and the rate of premium increases for our customers and members."
Capital spending for the second quarter totaled $628 million, compared to $627 million in the same quarter of 2007. KFHP/H continued to invest in its health programs and services, integrated healthcare system, technology and facilities to enhance the quality of the care and service it provides.
"Our earnings allow us to support our capital spending program, which is needed to help us meet the growing and evolving needs of our members," said Chairman and Chief Executive Officer George Halvorson. "We recently opened a new hospital in Irvine, Calif. a hospital tower expansion in Moanalua, Hawaii, and are now focused on opening additional state-of-the-art facilities in the remainder of this year and next."