Kaiser Permanente rebounds from poor 2015 profit performance

Dive Brief:

  • Total operating revenue for Kaiser Permanente Foundation Health Plan and Kaiser Foundation Hospitals (KFHP/H) increased from $60.7 billion in 2015 to $64.6 billion in 2016.

  • Growth in non-operating income, which increased from $102 million in 2015 to $1.2 billion in 2016, contributed significantly to growth in net income, which increased from $1.9 billion in 2015 to $3.1 billion in 2016.

  • Enrollment grew by 429,000 from 2015 to 2016, a 4.2% increase, and total membership was 10.7 million at the end of the year.

Dive Insight:

Strong financial performance through 2016 suggests that a relatively weak performance in the previous year was a fluke. Profits plummeted 40% from 2014 to 2015, due in large part to a decline in non-operating income, according to San Francisco Business Times. However, non-operating income for 2016 resembled 2014 figures, when it totaled $896 million.

KFHP/H did not provide a breakdown of enrollment figures, but stated that growth occurred in all lines of business. Since the end of 2016, KFHP/H completed its acquisition of Group Health, a health system serving patients in and around Seattle, Washington. Total enrollment now exceeds 11 million.

While other payers are fleeing Affordable Care Act (ACA) exchanges, it appears that KFHP/H will remain active. Medicaid expansion and narrow provider network plans have helped some payers, including KFHP/H. Meanwhile, other insurers may be losing some revenue and enrollment growth as they step away from exchanges.

Filed Under: Payer
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