Kaiser posts net loss of $961M in Q1

https://about.kaiserpermanente.org/our-story/news/announcements/kaiser-foundation-health-plan-and-hospitals-q1-2022-financial-update

Q1 2022 and Q1 2021 financial summary

$ in millions, except %Q1 2022Q1 2021
Total operating revenues$24,197$23,185
Total operating expenses$24,269$22,155
Operating income (loss)($72)$1,030
Operating margin(0.3%)4.4%
Total other income and expense (loss)($889)$1,003
Net income (loss)($961)$2,033
Capital spending$872$906

For the quarter ending March 31, 2022, Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and their respective subsidiaries (KFHP/H) reported total operating revenues of $24.2 billion and total operating expenses of $24.3 billion compared to total operating revenues of $23.2 billion and total operating expenses of $22.2 billion in the same period of the prior year. There was an operating loss of $0.07 billion, or (0.3%) of total operating revenues, for the first quarter of the year compared to operating income of $1.0 billion, or 4.4%, in the first quarter of 2021.

During the first quarter of 2022, a surge in COVID-19 cases — the steepest since the start of the pandemic — led to a substantial increase in the demand for related care and testing. COVID-19 expenses drove an additional $1.4 billion in expenses. Those expenses, along with the costs of providing care to our members that was deferred earlier in the pandemic, were the primary drivers of additional expenses. In the first quarter of 2022, Kaiser Permanente cared for more than 688,000 patients with COVID-19, including more than 26,000 hospitalized patients, performed 2.5 million COVID-19 diagnostic tests, supplied 1.3 million COVID-19 home tests, and administered 1.4 million vaccine doses. In addition, like the rest of the industry, Kaiser Permanente experienced significant increases in labor costs during the first quarter of 2022, compared to the same period last year and when compared to year-end 2021.

“I am incredibly proud of the extraordinary people of Kaiser Permanente, who have stepped up time and time again to provide high-quality care and service to our members and communities during unparalleled challenges,” said chair and chief executive officer Greg A. Adams. “While in the first quarter, the ongoing effects of the pandemic strained our workforce, communities, and operations, our operating model, which provides both care and coverage, enabled us to continue providing that care even in the face of an unprecedented omicron surge and industrywide labor shortage. Our underlying operating performance remains solid and aligned with expectations.”

In the category of other income and expense, the quarterly loss totaled $889 million, driven largely by investment losses, compared to $1.0 billion in income in the same period of the prior year. For the quarter, there was a net loss of $961 million compared to net income of $2.0 billion in 2021.

Capital spending

Capital spending in the first quarter totaled $872 million compared to $906 million in the same period of the prior year. During the first 3 months of 2022, Kaiser Permanente opened a new, 220,000-square-foot medical facility in Timonium, Maryland, that features 24-hour advanced urgent care and a 24-hour pharmacy, along with an ambulatory surgery center.

“While the increase in pandemic-related expenses, overall rising costs, and investment market losses impacted our finances this quarter, Kaiser Permanente navigated this challenging time providing high-quality care and continued investing in our integrated model including ongoing capital investments to best serve our members. We controlled discretionary spending, optimized COVID-19 testing, addressed surgical backlogs, and managed outside medical expenses,” said executive vice president and chief financial officer Kathy Lancaster. “As we face the ongoing uncertainty and prolonged effects the pandemic is having on the health care industry, we are well positioned to continue delivering high-quality, affordable care and remain vigilant stewards of resources entrusted to us in this dynamic environment.”

Membership

Membership as of March 31, 2022, was 12.6 million, reflecting a growth of more than 88,000 members since December 31, 2021. Medicaid enrollees accounted for almost 33,000 of Kaiser Permanente’s new members.

Q1 2022 and Q1 2021 financial summary

$ in millions, except %Q1 2022Q1 2021
Total operating revenues$24,197$23,185
Total operating expenses$24,269$22,155
Operating income (loss)($72)$1,030
Operating margin(0.3%)4.4%
Total other income and expense (loss)($889)$1,003
Net income (loss)($961)$2,033
Capital spending$872$906

Kaiser sees net income top $8B in 2021, operating income fall sharply

Kaiser sees net income top $8B in 2021, operating income fall sharply -  NewsBreak

Driven by strong investment gains, Oakland, Calif.-based Kaiser Permanente recorded a net income of $8.1 billion in 2021, an increase of $1.7 billion from 2020, according to its financial results released Feb. 11. However, its operating income fell sharply.

For the 12 months ended Dec. 31, the integrated healthcare provider with 39 hospitals recorded an operating revenue of $93.1 billion, up from $88.7 billion recorded last year. Additionally, Kaiser saw its expenses rise 6.9 percent to $92.5 billion in 2021. 

In 2021, Kaiser saw its operating income fall to $611 million, an operating margin of 0.7 percent. This compares to a $2.2 billion operating income in 2020 and an operating margin of 2.5 percent. 

Kaiser attributed the sharp decrease in operating income to an increase in care delivery expenses due to COVID-19 surges.

Total other income and expenses, which includes investment income, reached $7.5 billion in 2021. In 2020, Kaiser saw a gain of $4.1 billion.

Our financial performance underscores the strength of our integrated model, which allows us to weather unexpected challenges such as the COVID-19 pandemic while continuing to serve our members,” said Kathy Lancaster, Kaiser Permanente executive vice president and CFO.

In 2021, Kaiser also said its health plan membership grew by 185,000 members. It now has more than 12.5 million members.

Read more here.