Kaiser Permanente net income grows to $239 million in Q3
The organization also logged strong operating income, which was $156 million for the third quarter, compared to a $75M operating loss last year.
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Kaiser Permanente is in a drastically different financial situation than it was a year ago, having posted $239 million in net income for the third quarter. That's up from a net loss of $1.5 billion in Q3 2022.
The Oakland, California-based organization also logged strong operating income, which was $156 million for the third quarter of this year compared to an operating loss of $75 million in the third quarter of 2022.
Kaiser Foundation Health Plan, Kaiser Foundation Hospitals and their respective subsidiaries (KFHP/H) reported operating revenues of $24.9 billion and operating expenses of $24.7 billion, compared to operating revenues of $24.3 billion and operating expenses of $24.3 billion in the same period last year.
Other income (net of other expenses) was $83 million for the third quarter, compared to a $1.5 billion loss in Q3 2022. Net income was $239 million, compared to a net loss of $1.5 billion in the same period last year.
"Like other health systems, Kaiser Permanente is continuing to emerge from the pandemic and we are working hard to address our challenges, including competition for fewer workers, the high costs of goods and services, and an increased demand for services due to deferred care," said chair and chief executive officer Greg A. Adams. "Our focus in 2023 is on implementing effective strategies that improve service, access, and quality to deliver the best health outcomes for our members. Thanks to the concerted and unrelenting efforts of our employees and physicians, we are seeing results in these areas and remain committed to fulfilling our mission."
WHAT'S THE IMPACT?
Membership as of September 30 was more than 12.6 million, reflecting a growth of more than 29,000 members since the end of last year, Kaiser said.
Capital spending in the third quarter was $825 million, compared to $820 million in the same period of the prior year. Kaiser Permanente opened the new seven-story, 433,000-square-foot San Marcos Medical Center on August 9, which it said expands healthcare access to members in San Diego County, California.
As of September 30, Kaiser Permanente had 618 medical offices, 40 hospitals and 43 retail and employee clinics.
"In the third quarter, we furthered the long-term health and stability of the organization by maintaining fiscal discipline while increasing access to our high-quality care and service," said executive vice president and chief financial officer Kathy Lancaster. "At Kaiser Permanente, we are also continuing to expand our digital capabilities and in-person care services to improve the consumer experience."
THE LARGER TREND
Kaiser Permanente had a rough financial year in 2022, but has been rebounding throughout the course of this year, finishing the second quarter of 2023 with $25.2 billion in operating revenues, versus $24.4 billion in expenses. Revenues went up year-over-year and expenses went down.
This year, Kaiser said financial market conditions were favorable, leading to strong investment income.
Kaiser said it historically sees higher operating margins in the first half of the year and lower operating margins in the second half of the year, since expenses tend to increase throughout the year relative to operating revenues, due in part to the annual enrollment cycle and seasonal care.
Last month, Kaiser Foundation Health Plan and the California Department of Managed Health Care (DMHC) reached a $200 million settlement agreement to make significant changes to the plan's delivery of behavioral healthcare services. The settlement agreement includes a $50 million fine and requires Kaiser Permanente to take corrective action to address deficiencies in the plan's delivery and oversight of behavioral health care to enrollees.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
