April 30, 2002
For more information, contact:
Beverly Hayon
(510) 271-5953

Kaiser Permanente maintains strong 1st quarter performance

(Oakland, California) April 30, 2002—Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals and their subsidiaries (KFHP/H) reported net income of $297 million and operating income of $288 million on operating revenues of $5.5 billion for the first quarter ended March 31, 2002. In the first quarter of 2001, KFHP/H posted net income of $156 million and operating income of $185 million on operating revenues of $4.9 billion.

Membership for the first quarter grew by 126,000 members to total over 8.3 million members.

"This is a strong start to 2002, demonstrating the commitment of the organization to achieving operational excellence," said Dale Crandall, president, KFHP/H. "The key drivers of this improved performance continue to be improved revenues, moderate membership growth, innovative approaches to delivery of medical care, and the prudent stewardship of our membership dues. Improved performance is particularly important at this time in view of the rapid increase in the organization's capital commitment that is expected to reach $1.6 billion in 2002. This is up from $1 billion that we spent in 2001. We need to continue building new hospitals and clinics, and continue our investment in technology to maintain our quality care and quality service."

"I'm delighted with our strong results for the first quarter," said George Halvorson, newly appointed chairman and CEO of KFHP/H. "For Kaiser Permanente to achieve its mission, we need to be able to make the kind of investments in care and facilities that can only be done if we have a positive performance. As a not-for-profit health plan, our net revenue is primarily used to make care system improvements for our members. It is our goal to continue that commitment to both operational and medical excellence, and to invest our earnings accordingly."

Kaiser Permanente is America's leading integrated health care organization. Founded in 1945, it is a not-for-profit health plan with headquarters in Oakland, California. Kaiser Permanente serves the health care needs of 8.3 million members in 9 states and the District of Columbia. Today, it encompasses Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals and their subsidiaries, and the Permanente Medical Groups. Nationwide, Kaiser Permanente includes about 100,000 technical, administrative and clerical employees and approximately 11,000 physicians representing all specialties.

Except for historical information contained herein, the matters discussed in this media release are forward-looking statements that involve risks and uncertainties. Actual results may vary significantly based on a number of factors including, but not limited to: the impact of competitive products and pricing; changing membership, regulatory requirements, and the change in economic conditions of the various markets the organization serves.

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