Kaiser Permanente picked up a $1 billion operating gain in the first quarter of 2017 with $18.1 billion in revenue. The gain is much more than the $701 million in the first quarter of 2016 and more revenue than the $16.3 billion in that period, reported Modern Healthcare.
The California health system enjoyed a 5.5% operating margin in the first quarter, which was an improvement over 4.3% in the first quarter of 2016.
Kaiser Permanente said its February acquisition of Group Health Cooperative in Washington contributed $18 million of the operating income.
Kaiser Permanente’s announcement comes after the Oakland-based health system raised $4.4 billion in three bond offerings this month. The company plans to use the money from bonds to expand its capacity, physician offices and technology.
KP’s acquisition of Group Health Cooperative this year picked up 651,000 members in Washington. The company has 11.3 million members, 38 hospitals and 668 medical offices.
KP executives have been vocal about the importance of shifting to value-based care and increasing use of telemedicine to improve the country's healthcare system. Just recently, CEO Bernard Tyson said that while the Affordable Care Act exchange markets were unstable, the system will continue offering plans in them.
Representatives from KP were among a group of health leaders that released a report last month highlighting principles for using value-based care to focus on outcomes and put patients and the center of their care. Tyson recently said more than half of KP members' physician visits were virtual, partly because $3.8 billion of its annual capital spend is IT-related.
Another integrated health system reported impressive earnings this month. UPMC, which has hospitals and a health insurer, reported operating revenues grew to $11 million with a net income of $871 million in the first nine months of the fiscal year.