Kaiser reports 9% Q3 revenue growth, membership boost
Kaiser Permanente reported a nearly 9% revenue increase for the third quarter of this year. The integrated health system finished the period with $19.9 billion in revenue, a slight increase over the $19.6 billion in revenue in the second quarter.
The system's operating income dropped 32% to $884 million compared to a year ago. However, the third-quarter income was an increase of $291 million over the second quarter. Kaiser Permanente said the net non-operating income was the main driver behind the net-income decline due to the volatility in the financial markets.
- In related news, The Denver Post reported that the health system laid off 200 employees. The company said the layoffs "address redundancies" in administrative and non-patient-related positions.
Results for healthcare companies, particularly payers, have trended positive this quarter with strong membership growth.
Kaiser increased its membership from 11.7 million a year ago to 12.2 million for the third quarter. In a statement to Healthcare Dive, Thomas Meier, senior vice president and corporate treasurer, said, "Kaiser Permanente's Q3 2018 financial performance shows that our operating results were stable this quarter and that people continue to choose Kaiser Permanente."
The company's capital spending reached $760 million in the quarter. That included investments in technology and opening new facilities, such as two in California — a behavioral health clinic in Sacramento and a hearing center in San Rafael. The system has 690 medical offices, including 39 hospitals.
The Oakland-based health system is investing in "extensive redesigns and models" of existing campuses. KP said the work is aimed at improving member experience. The nonprofit system is also investing in healthy community initiatives, such as its renewable energy purchase to get the system carbon neutral in 2020.
In announcing the environmental commitment in September, CEO Bernard Tyson said the company's effort is about confronting climate change and preventing climate-related illness.
- Kaiser Permanente Kaiser Foundation Health Plan and Hospitals Financial Update