Kaiser net income drops to $1.6B in Q3

Kaiser Permanente ended the third quarter of this year with lower net income than in the same period a year earlier. 

The Oakland, Calif.-based healthcare giant reported operating revenue of $23.15 billion for its hospital and health plan units in the third quarter of 2021, up from $21.95 billion in the same quarter of 2020. 

Kaiser's unique integrated model — it provides healthcare and health plans — makes it difficult to compare its financial results to those of other systems that do not receive member premiums. As of Sept. 30, Kaiser had 12.5 million health plan members. 

The 39-hospital system ended the third quarter of this year with operating income of $38 million, down from $456 million in the same quarter of 2020. Kaiser attributed the decline to an increase in expenses, including care delivery costs tied to the delta variant COVID-19 surge. The health system saw expenses rise 7.5 percent year over year. 

"Our third quarter 2021 performance reflects changing market conditions and membership shifting from commercial to government-sponsored plans," Executive Vice President and CFO Kathy Lancaster said in an earnings release. "We continue to thoughtfully manage our expenses consistent with our commitment to provide high-quality, affordable care to more people."

Kaiser spent $878 million on capital projects in the third quarter of this year, down from $964 million in the third quarter a year earlier. The system invested in new medical offices and now has 730 medical offices nationwide. 

After factoring in nonoperating items and one-time costs, Kaiser reported net income of $1.6 billion for the third quarter of 2021, down from nearly $2 billion in the same period last year. 

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