After suffering massive losses last year, Kaiser Permanente fell back into the dark in the first quarter with an extra boost from financial markets.
Oakland, California-based Kaiser on Friday reported net income of $1.21 billion for the first quarter, compared with a net loss of $961 million in the same period a year earlier. Revenue rose 4.2% to $25.22 billion. Costs, which include rising labor costs and higher prices of goods and services, increased 3% overall to $24.99 billion.
Non-operating income came in at $975 million, driven mainly by investment gains, compared with a loss of $889 million in the first quarter of 2022.
Total operating income came in at $233 million, up from a loss of $72 million a year ago.
Tom Meier, the company’s treasurer, said in an interview that to limit costs, Kaiser has cut some discretionary spending, such as executive and employee travel, and at the same time will continue to scrutinize staff numbers, especially administrative roles.
“We’ve all been asked to keep to our budget and even look at whether there’s any opportunity to reduce costs as we head into the rest of this year, so we can get up to speed. entering 2024,” he said.
Kaiser, which operates 39 hospitals and more than 700 medical offices, said in a press release that it saw a 15% increase in clinical hiring in the first quarter compared with the same period a year ago, due to the system. further reduce dependence on contract labor. Meier said wages are mostly locked until September, when nearly 88,000 workers’ contracts are renewed. Labor unions represent about three-quarters of Kaiser’s workforce.
Kaiser’s latest financial results come about a week after the system announced plans with Danville, Pennsylvania-based Geisinger Health to form a nonprofit that will acquire health systems to build a national care network. Kaiser is committed to investing up to $5 billion in the nonprofit, called Risant Health, over the next five years. Kaiser’s CEO, Greg Adams, last week said he wants Risant to grow into a $30 billion to $35 billion organization in that time period.
