Kaiser Foundation Health Plan, hospitals profits slide $1.2 billion, report shows

Screenshot via kaiserpermanente.org.

Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their subsidiaries reported a $1.2 billion drop in profit year over year, according to their 2015 annual and fourth quarter financial results.

Kaiser reported net income, or profit, of $1.9 billion in 2015, compared to $3.1 billion in 2014, according to the financial statement.

Operating revenue for 2015 remained strong at $60.7 billion, compared to $56.4 billion in 2014, according to Kaiser.

Operating income for 2015 was $1.8 billion, or 2.9 percent of operating revenue; compared to $2.2 billion in 2014, or 3.9 percent of operating revenue.

For the quarter ending December 31, 2015, operating revenue was $15.1 billion, compared to$14.2 billion in the same period in 2014. Operating loss was $98 million in the fourth quarter of 2015, compared to operating loss of $63 million in the same quarter of the prior year.

Net loss for the fourth quarter of 2015 was $67 million, versus net loss of $68 million for the same period in 2014.

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Capital spending in the fourth quarter of 2015 was $799 million, compared to $725 million in capital spending in the fourth quarter of 2014. These fourth quarter results are typical of seasonality, which is driven by the timing of revenue and expense increases, Kaiser said.

Membership increased by 6.7 percent from 2014, with growth occurring across individual, employer group, Medicare and Medicaid lines of business, Kaiser said.

Capital spending was $2.7 billion in 2015, compared to $2.8 billion in 2014. 

Capital spending reflected investments in technology and facilities,  including the completion of nine new medical office buildings. A state-of-the-art medical office in Manhattan Beach, California  integrates technology and wellness programming.

In 2015, Kaiser Permanente also opened the last of 13 seismic replacement hospitals to meet earthquake standards -- Kaiser Permanente South Bay Medical Center in Harbor City, California. Significant investments were made in a variety of information technologies, including telehealth, digital services for consumers, pharmacy systems and others.

"Our ongoing investments are key to ensuring delivery of high-quality and affordable health care to our members and patients," said Executive Vice President and CFO Kathy Lancaster.

Kaiser Permanente's patients access care and service more frequently via secure messaging, telehealth, micro-clinics and mobile health vehicles.

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In 2015, www.kp.org was accessed nearly 520,000 times per day, an increase of 16 percent from 2014. In particular, more members used this tool as a means to communicate with caregivers and access their medical information.

Throughout 2015, over 22 million secure email interactions occurred between members and care providers, a 12 percent increase from 2014. Additionally, members filled close to 20 million prescriptions and viewed over 40 million lab results online in 2015, an increase from 2014 by nearly 12 percent and 8 percent, respectively.

In 2015, Kaiser provided approximately $2.1 billion, or 3.5 percent of their operating revenue, to support community benefit programs and services, including care for low-income individuals.

"Performance on service, access, quality and affordability continued to be strong in 2015," said Chairman and CEO Bernard J. Tyson. "As a result, more people are choosing Kaiser Permanente. Our membership grew by nearly 650,000 and we now care for more than 10.2 million Americans. We believe our model is the right approach for the future of health and health care in this country, and we are committed to ensuring that our members receive the care and services they need at a price they can afford."

Twitter: @SusanJMorse