- Kaiser Permanente continued growth in revenue during the second quarter ending June 30, but its profits have taken a hit. The Oakland-based nonprofit reported net income of nearly $3 billion on revenue of $23.7 billion. Although revenue increased by 7.2% compared to the second quarter of 2020, its net income dipped by more than a third.
- Expenses related to COVID-19 created the biggest threat to Kaiser's margins, as they increased by more than 15% overall. However, Kaiser made up for much of that shortfall with a strong performance by its invested assets.
- Kaiser does not make any forecasts about future financials, but noted that the issues with COVID-19 were ongoing and would likely pose an operational and financial issue for the foreseeable future.
Although a nonprofit organization, Kaiser Permanente regularly operates in the black with net margins well into the double-digits.
The second quarter ending June 30 was no exception for Kaiser: Net income of just under $3 billion gave it net margins of nearly 13%. But the organization, which includes a health plan, medical groups and more than three dozen hospitals in nine states and the District of Columbia, is experiencing a lot of financial pressure due to COVID-19.
For example, Kaiser's operating income was $349 million the second quarter. That compares to $2.1 billion in the second quarter of 2020, just as the pandemic was ramping up in the United States. That's a drop of 83.2%.
Operating expenses skyrocketed during the quarter, reaching $23.3 billion, up from $20 billion for the year-ago quarter.
Kaiser made up for that with investment income of $2.6 billion, up from $2.4 billion in the second quarter of 2020.
Capital spending was also down, to $864 million, compared to $907 million in the second quarter of last year, a decline of 4.7%.
Still, the numbers are better than the first quarter of 2020, when Kaiser took a loss that totaled more than $1 billion.
Meanwhile, health plan enrollment remained stable at 12.5 million nationwide, up by about 141,000 from the end of 2020.
"The stability of Kaiser Permanente's integrated model, which provides both care and coverage, continues to help us navigate through the pandemic as we manage ongoing COVID-19 expenses and resumption of care," CFO Kathy Lancaster said in a statement.