News release: National

December 26, 2003

For more information, call:
Mike Lassiter
Kaiser Permanente
Phone: (510) 271-5953
E-mail: Mike.Lassiter@kp.org

Kaiser Permanente selects KPMG as independent auditor

Oakland, CA – Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals, and their subsidiaries announced today that the audit and compliance committee of the board of directors has selected KPMG LLP (KPMG) as its independent auditor for 2004. Deloitte & Touche LLP (Deloitte) will complete the 2003 audit.

Kaiser Permanente, a nonprofit health plan, has voluntarily adopted the provisions of the Sarbanes-Oxley Act of 2002, as applicable, which led to this decision. Kaiser Permanente is in the process of implementing KP HealthConnect, which is a fully integrated medical records system. As an integral part of that implementation, Kaiser Permanente expects to involve Deloitte with the integration of financial systems in 2004.

"One important step in complying with Sarbanes-Oxley is to appoint separate firms to do our audit and financial systems integration work," stated Robert Ridgley, chair of Kaiser Permanente's audit and compliance committee. "We believe we have selected an outstanding firm in KPMG, which offers Kaiser excellent insights and experience in the health care industry. By the same token, Deloitte has provided us with high-quality auditing and consulting services for many years. We felt that our board's decision to enhance our corporate governance by voluntarily following Sarbanes-Oxley is worth making the change. We expect to work closely with Deloitte as we implement KP HealthConnect, which is of critical importance to Kaiser's future success."

This decision to select KPMG was made after a comprehensive review and evaluation as part of the audit and compliance committee's stated desire to assess periodically the company's independent auditor consistent with sound corporate governance. KPMG LLP is the U.S. member firm of KPMG International, whose member firms have nearly 100,000 professionals, including 6,600 partners, in 150 countries. KPMG was the first public accounting firm to organize its resources along industry lines, and its Healthcare & Public Sector line of business represent one of its largest practices.