Dive Brief:
- Kaiser Permanente reported a $239 million profit during the third quarter, according to earnings released Friday — an improvement from a loss of $1.5 billion during the prior-year period.
- The health system and health plan provider recorded $83 million in other income and expenses, which includes investment income, after reporting a $1.5 billion loss in the same period last year.
- Kaiser has been in the black each quarter this year, marking a turnaround from 2022 when the company posted a $4.5 billion annual net loss stemming from high labor costs and investment losses.
Dive Insight:
The Oakland, California-based nonprofit’s operating revenue grew more quickly than operating expenses in the third quarter. Kaiser’s operating revenue and expenses respectively rose 2.6% and 1.6% year over year.
Investment income continued to recover during the third quarter after multi-billion dollar losses last year.
Kaiser’s capital spending also increased in the third quarter, rising from $820 million in the third quarter of 2022 to $825 million this year.
Kaiser opened a medical center in San Marcos, California, in August, expanding the geographic footprint of the nonprofit to a total of 618 medical offices, 40 hospitals and 43 retail and employee clinics.
Kaiser said it added more than 29,000 health plan members since the end of December, bringing its total membership to 12.6 million people despite ongoing Medicaid redeterminations. The operator first flagged the impact of redeterminations last quarter, and began outreach to Medicaid plan members to minimize the number of plan members who may be disenrolled.
Kaiser’s third quarter earnings results don’t reflect the impact of a historic strike among 75,000 Kaiser employees last month. Both the work stoppage and the newly-bargained employee contract — which will raise pay for workers by 21% and lift minimum wages — will be reflected in the operator’s fourth quarter earnings.
Also last month, Kaiser agreed to pay the state of California a $200 million settlement to address alleged weaknesses in the plan’s delivery of behavioral healthcare. The majority of the funds will be investments in behavioral healthcare services that Kaiser will pay out over a five-year span.
