Kaiser Permanente Edges Margins Higher in 2025 as Costs, Labor Pressures Mount

The nonprofit's revenue rose to $127.7 billion and operating margins doubled, but expense growth and an ongoing worker strike complicate the outlook.

Kaiser Permanente and its subsidiaries made progress toward margin recovery in 2025, though rising costs and labor tensions continue to strain the organization.

The integrated organization, including subsidiary Risant Health, delivered $127.7 billion in operating revenues for the year, up from $115.8 billion in 2024, and achieved an operating income of $1.4 billion, translating to a 1.1% operating margin.

The results mark a step up from 2024, when the organizations reported a $569 million operating income and a 0.5% margin, but they also highlight the ongoing challenge with rising care delivery costs, including increased patient acuity and higher prescription drug expenses.

“In 2025, we navigated another year of increasing complexity for health care organizations while continuing to make operational improvements to begin building back to necessary operating margins,” Greg Adams, Kaiser Permanente chair and CEO, said in a statement. “Through our employees’ and physicians’ unwavering focus on quality and affordability, we were able to achieve a 1.1% operating margin while addressing the increased demand for care, higher care acuity, and the rising costs of care.”

Central to Kaiser’s recent financial performance has been the growing role of Risant Health, the value-based care platform Kaiser created to scale its care model through acquisitions of like-minded health systems. In 2024, $6.8 billion of Kaiser’s $12.9 billion in net income was brought in by Risant, which completed purchases of its first two health systems that year in Geisinger Health and Cone Health.

While 2025’s earnings reflect a drop in net income to $9.3 billion, Risant is expected to continue bolstering Kaiser’s financial profile, especially as it works toward its stated goal of acquiring around five health systems over the next several years.

Despite progress on margins, Kaiser and Risant saw operating expenses jump to $126.3 billion in 2025, an increase from $115.2 billion the prior year. Kaiser pointed to high demand for care and the costs of managing chronic and specialty conditions as key pressure points, even as the organization pushed operational efficiency initiatives to offset expense growth.

On capital spending, Kaiser and Risant combined for $4.8 billion last year, up from $3.7 billion in 2024, with investments including preparations to meet California’s hospital mandates for earthquake safety.

“Our investment and other income in 2025 support our capital program, including seismic hospital replacements, facility improvements, and advanced technology,” Kathy Lancaster, executive vice president and CFO, said in a statement. “These enhancements support the evolving needs of our members, patients, and staff and help us continue delivering high-quality, affordable care and service.”

Kaiser’s 2025 earnings come against the backdrop of a significant labor dispute. More than 30,000 workers have been on strike since January 26, 2026 at Kaiser facilities across California and Hawaii, seeking improved wages, staffing levels, and working conditions. The walkout was led by the United Nurses Associations of California/Union of Health Care Professionals (UNAC/UHCP), with union leaders describing the action as an open-ended unfair labor practice strike.

The strike adds another layer of complexity for Kaiser as it works to balance financial performance with care delivery and workforce stability, a dynamic many health systems are grappling with in a tight labor market.

As of the end of 2025, Kaiser and Risant operated 55 hospitals and 847 medical clinics. Health plan membership across the organization was nearly 13.1 million.