The Oakland-based organization delivered impressive financials for Q2 2019.
Kaiser Permanente posted a net income of $2.05 billion in Q2, well-exceeding its net income of $653 million in Q2 2018, according to the organization's latest financials released Friday.
The Oakland-based payer-provider had total operating revenues that topped $21.4 billion, up nearly $2 billion year-over-year, an operating income of $1.1 billion, up nearly $800 million over the same period of time, and an operating margin of 5.2%.
Kaiser attributed its strong operating revenues to favorable changes in membership and lower Affordable Care Act risk adjustments that benefited the organization by more than $600 million.
In its financial report, Kaiser stated that its operating margins are typically higher during the first half of the year as a result of the open enrollment period, followed by lower margins during the second half as a result of increased expenses relative to revenues.
Kaiser also achieved a membership total of 12.3 million, up 100,000 members compared to Q2 2018.
"We are proud that our organization is growing and helping more people live healthier lives," Bernard J. Tyson, CEO of Kaiser Permanente, said in a statement. "Our operational performance, combined with strong investment returns, will enable us to continue reinvesting in programs that improve the affordability of health care and coverage for our members, as well as contribute to the health of the communities we serve. We are now well-positioned to accelerate these efforts in the coming months."
Kaiser managed to alter two financial metrics, reducing its capital spending by $25 million and increasing total other income and expense by nearly $600 million. The organization attributed these changes to investments in facilities, technology, and "unrealized gains on certain equities as net non-operating income."
These strong financials come as Kaiser sets out to construct new headquarters in Oakland to the tune of nearly $1 billion.
In highlighting its ongoing social determinants of health initiative, Kaiser pledged just over $19 million in Q2 for community-based grants and donations to national charities.
During the same quarter, Kaiser also filed a lawsuit against Queen’s Health System in Hawaii alleging "unfair billing practices," as reported by Maui Now.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: Courtesy of Kaiser Permanente