Kaiser posts $6.4B net income in 2020

Oakland, Calif.-based Kaiser Permanente recorded a net income of $6.4 billion in 2020, a 14 percent decline compared to 2019, according to recently released financial documents

The 39-hospital system saw its operating revenue increase in 2020 to $88.7 billion, compared to $84.5 billion in 2019. The health system also saw its expenses rise 5.8 percent year over year to $86.5 billion. 

This left Kaiser with an operating income of $2.2 billion in 2020, down about 19 percent from 2019. Overall, Kaiser ended the year with a 2.5 percent operating margin, compared to a 3.2 percent operating margin in 2019. 

Kaiser also saw a nonoperating gain of $4.1 billion in 2020, compared to $4.7 billion in 2019.

"Our 2020 year-end results reflect the strength of our integrated model amid the unparalleled challenges of fighting COVID-19. In each stage of the pandemic, Kaiser Permanente’s dedicated employees did an outstanding job delivering virtual and in-person care while also providing COVID-19 prevention, testing, treatment and vaccination," said Kaiser Chair and CEO Greg Adams. 

Despite the pandemic, Kaiser spent more on capital projects in 2020 than in 2019. In 2020 Kaiser spent $4 billion on projects, whereas in 2019 Kaiser spent $3.5 billion. 

"We actually had a plan to spend more than what we did, $4 billion, but of course with COVID, it caused us to revisit those projects," Tom Meier, corporate treasurer of Kaiser Permanente, told Becker's Hospital Review. "We ended up scaling down a number of projects."

Mr. Meier explained that over the last several years Kaiser has shifted its capital program to focus on projects related to virtual care, telehealth and information technology. 

Kaiser also offers a health plan to members across the U.S. As of Dec. 31, Kaiser had 12.4 million members, an annual increase of nearly 110,000 members. 

"We were pleased with those results but they were also challenging when you think about the high levels of unemployment and impact COVID had on businesses. We lost some membership in the commercial, but gained it in the individual and Medicaid markets," Mr. Meier said.

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