Kaiser posts $233M operating profit in Q1, health plan adds 120,000 members

Oakland, Calif.-based Kaiser Permanente reported $233 million in operating income for the first quarter, up from a $72 million operating loss in the first quarter of 2022. Its operating margin grew from -0.3 percent in the first quarter of 2022 to 0.9 percent in the first quarter of this year.

For the three months ended March 31, Kaiser's health plan, hospitals and their respective subsidiaries posted $25.2 billion in revenue and $25 billion in expenses, compared to $24.2 billion and $24.3 billion, respectively, for the same period last year.

Driven by favorable financial market conditions, total other income and expense was $975 million compared to an $889 million loss in the first quarter of 2022. Net income for the first quarter was $1.2 billion compared to a net loss of $961 million last year.

First-quarter capital spending was $930 million, up from $872 million last year. As of March 31, Kaiser Permanente had 624 medical offices, 39 hospitals and 43 retail and employee clinics.

Kaiser said providing preventive, routine, chronic, acute and deferred care was a primary expense driver in the first quarter as it continued to see higher care volumes. Increased labor costs and the rising cost of goods and services also contributed to first-quarter results.

To address these expenses, Kaiser has ramped up the recruitment of clinical staff and reduced reliance on contract labor. Because of this, hiring of clinical roles increased by 15 percent year over year in the first quarter. The health system also implemented strategies to increase administrative efficiencies and manage discretionary spending.

"Our focus in 2023 continues to be advancing our leading value-based care and coverage model," CEO Greg Adams said in a May 5 news release. "Despite the ongoing challenges facing the healthcare industry, Kaiser Permanente is not wavering on our commitment to providing preventive, evidence-based, equitable care and quality outcomes, and offering multiple access points for member care and service."

Kaiser's health plan now has 12.7 million members, reflecting a growth of more than 120,000 members in the first quarter. In 2022, membership grew by 36,000.

"We are committed to expanding access to our unique model of care and coverage, maintaining our capital investments and effectively managing our resources in a dynamic healthcare landscape," CFO Kathy Lancaster said. "Our sound financial position helps ensure that Kaiser Permanente continues to improve the health of our members and the communities we serve, and invest in our people, technology, and facilities."

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars