Dive Brief:

• Kaiser Permanente reported 2024 results last week that demonstrated the payoff of Risant Health, the integrated healthcare system’s fledgling subsidiary to operate nonprofit hospitals that launched last year.
• Kaiser brought in $115.8 billion in operating revenue last year, up nearly 15% from 2023. The nonprofit system and health plan recorded net income of $12.9 billion, more than triple the $4.1 billion recorded the year prior. Risant’s acquisitions accounted for half of Kaiser’s net income and 40% of its revenue growth, a spokesperson said.
• Risant completed its first two acquisitions in 2024, buying Pennsylvania-based Geisinger in March and North Carolina-based Cone Health in December. Kaiser executives have previously said Risant will buy at least five health systems within the first few years of operating. A Kaiser spokesperson declined to comment on the timing of upcoming acquisitions.

Dive Insight:

The year-end report marks the first time Kaiser Permanente has reported consolidated financial statements for its core health system, health plan and Risant. 

Collectively, Kaiser is massive with 55 hospitals and more than 800 medical offices. While the company reported $115.8 billion in operating revenue for the year, the cost of providing care increased, too. The system’s operating costs were $115.2 billion in 2024, compared to $100.5 billion in the prior year.

“Like others in the health care sector, [Kaiser] and Risant Health experienced significant financial pressures in 2024 such as high prescription drug prices, high costs of goods and services, and increased care volumes, especially in ambulatory care settings,” the system said.

Pharmaceutical and supply costs rose industry-wide in 2024. Experts predict more price hikes in 2025, especially if proposed tariffs on critical medical supplies are finalized.

In response to cost pressures, Kaiser conducted multiple rounds of layoffs last year, including cuts of at least 460 jobs in its home state of California, according to notices filed with state regulators. In January, the system said it planned to cut 52 additional jobs.

Several rounds of cuts have targeted Kaiser’s IT workforce and employees in administrative roles. Other providers, including Jefferson Health, Lehigh Valley Health Network and, most recently, Mass General Brigham have also cut nonclinical roles this year to lower costs.

Still, Kaiser’s total reductions impact less than a fraction of the health system’s total workforce of more than 240,000 employees. 

A spokesperson for Kaiser declined to say whether the health system had offshored or outsourced any departments as part of its bid for efficiency. However, the possibility has been top of mind for Kaiser workers since at least 2023. During the fall of that year, approximately 75,000 Kaiser employees took to the picket line partially in pursuit of protections against outsourcing.

Kaiser has also leaned into artifical intelligence and technology investments to enhance efficiency. For example, in August the system rolled out an AI documentation tool to help cut down on time physicians spend on administrative tasks.

Kaiser’s capital spending totaled $3.7 billion in 2024. While a portion of the spending went toward technology initiatives, the system said the lion share was allocated toward meeting California seismic safety standards by 2030.