FOX Translator
No data currently available.
No data currently available.
We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
Home
Monday, August 04, 2008
Kaiser Foundation Health Plan and Hospitals' Second Quarter Results Enable Investments in Health Programs and Infrastructure
Comtex
OAKLAND, Calif., Aug 04, 2008 /PRNewswire via COMTEX/ ----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 health care 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 health care 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, California, 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."
As a not-for-profit organization, KFHP/H also uses its earnings to support a wide range of community benefit programs, which provide direct health care coverage for uninsured families and support community-based health partnerships, and research and collaboration with community health organizations. A portion of KFHP/H's community benefit activities in the second quarter included the approval of more than 415 community benefit grants and donations. In 2007 KFHP/H provided more than $1 billion to support community benefit programs and services.
A leader in integrating technology in the delivery of health care, KFHP/H continues to expand its electronic health record project KP HealthConnect(TM). All Kaiser Permanente members can now securely access their personal health records online and communicate with their Kaiser Permanente physicians through My Health Manager on kp.org. This unprecedented access enables members and their physicians to make the best health care choices with improved quality, service and safety. "We are making rapid progress in becoming the world standard for electronic connectivity between members and patients," said Halvorson. "With two and a quarter million users now accessing My Health Manager online, I am pleased to say that our teams of physicians, nurses, caregivers and other health care professionals have passed another milestone in our goal to transform the way members choose and receive their health care. We like to point out that with our new electronic patient connectivity, we achieved millions of patient visits last year without our members expending one gallon of gas."
About Kaiser Permanente
Kaiser Permanente is America's leading integrated health care delivery system. Founded in 1945, it is a group practice prepayment program headquartered in Oakland, California. Kaiser Permanente serves the health care needs of nearly 8.7 million members in nine states and the District of Columbia. It encompasses the not-for-profit Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries, and the for-profit Permanente Medical Groups. Nationwide, Kaiser Permanente includes approximately 165,000 technical, administrative and clerical employees and caregivers, and more than 14,000 physicians representing all specialties. The system's Labor Management Partnership is the largest health care labor-management partnership in the United States. It governs how workers, managers, physicians and dentists work together to make Kaiser Permanente the best place to receive care, and the best place to work. For more Kaiser Permanente news, visit the KP News Center at: http://www.kp.org/newscenter.
Except for historical information contained herein, the statements in this release may contain forward-looking statements. Forward-looking statements include, among other things, statements that refer to plans and expectations such as future events and future financial performance. Forward-looking statements involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied by the statements herein based on a number of factors including, but not limited to: the impact of competitor products and pricing; government regulations; health care legislation; changing membership requirements; and the change in economic conditions of the various markets the system serves.
http://www.kaiserpermanente.org
SOURCE Kaiser Permanente
http://www.kaiserpermanente.org
Copyright (C) 2008 PR Newswire. All rights reserved
Market Snapshot
| Symbol | Last Price | Netchange | Volume |
|---|---|---|---|
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
