Nonprofit hospital and health plan operator Kaiser Permanente on Friday posted a $4.5 billion net loss in 2022, compared to a $8.1 billion net gain in 2021, as the integrated system struggled with billions of dollars in investment losses, a rise in care volume and ongoing labor shortages.
Operating expenses rose 4.5% to $96.7 billion, compared to $92.5 billion in 2021, driving a $1.3 billion operating loss. That’s compared to a $611 million gain in the year prior.
The Oakland, California-based conglomerate, which operates 39 hospitals and a health plan totaling over 12 million enrollees at the end of last year, said that its rise in expenses were driven by labor shortages and continued impacts of the COVID-19 pandemic.
“Clinical staff shortages, COVID-19 care and testing, higher costs of goods and services, and deferred care drove Kaiser Permanente’s expenses beyond revenue,” Kaiser CEO Greg Adams said in a statement.
Investment losses, spurred by economic market volatility, totaled over $3 billion for the operator. Kaiser reported total operating revenues of $95.4 billion in 2022, up from $93.1 billion year over year.
Kaiser is the latest non-profit to report annual 2022 losses as hospital operators face soaring labor costs, investment losses and rising medical expenses driven by inflation. Last month, Fitch Ratings renewed its ‘deteriorating’ operating outlook for nonprofit hospitals this year, after first downgrading the system from a ‘neutral’ outlook in August 2022. A Fitch Ratings director called 2022 one of the “worst years ever” for nonprofit hospitals.
Kaiser in particular has struggled with labor shortages and union activity. Last year, nearly 2,000 Kaiser mental health clinicians in Northern California went on strike for nearly 10 weeks in the longest healthcare labor strike last year.
And, in December, Kaiser narrowly avoided a two-day strike that would have involved over 20,000 nurses in Northern California.