Kaiser Permanente’s net income soared to $2 billion in the second quarter of 2019, a dramatic increase over the $653 million posted the year before.
The healthcare giant reported $21.4 billion in operating revenue with $1.1 billion in operating income. An additional $930 million in income could be attributed at least in part to high performance in the system’s investment portfolio.
In addition, Kaiser Permanente said its income benefited from an accounting change effective Jan. 1 that required it to report unrealized gains on some of its equities as part of its income.
“We are proud our organization is growing and helping more people live healthier lives,” CEO Bernard Tyson 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 healthcare and coverage for our members, as we contribute to the communities we serve.”
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Kaiser Permanente earned a 5.2% margin in the second quarter, up from 1.8% year over year. The system did warn in the report, however, that often margins are higher in the first two quarters of the year, and performance declines in the second half.
Membership in its health plan took a slight uptick compared to the first half of 2018, increasing to 12.3 million from 12.2 million.
The health system also invested $710 million in capital improvements during the quarter, including efforts to open or upgrade facilities and in technology. Kaiser opened new medical offices in Virginia, Washington and California, bringing its total reach to 701 medical offices and 39 hospitals nationwide.
Kaiser also highlighted several community investments in the second quarter, including the launch of Thrive Local, its new care network for the social determinants of health, and $19.3 million in grants to various organizations for projects addressing these social needs.
“Strong results are essential for us to deliver on our nonprofit mission to improve affordability while advancing our high-quality care and service for our members and customers,” Kathy Lancaster, chief financial officer, said. “This allows us to make strategic investments in technology, people and care facilities.”