Kaiser Permanente generated $2.2 billion in operating income last year as the hospital system weathered financial challenges from the pandemic.
Kaiser announced late Friday that it generated $88.7 billion in total operating revenue in 2020, up about 5% compared with $84.5 billion the year before. The system’s operating income dropped to $2.2 billion, down about 19% from the income of $2.7 billion generated in 2019.
The system touted membership gains in its health plan and its “integrated model” in handling the financial fallout from COVID-19 that forced patient volumes to plummet.
“As part of our mission, we found innovative ways to provide high-quality, affordable care to our members and communities equitably and safely while protecting our healthcare workers,” said Kaiser CEO Greg Adams in a statement.
Kaiser’s health plan membership grew to 12.4 million, an increase of nearly 110,000 members in 2020 compared to 2019. The membership increase is especially noteworthy in light of major job losses sparked by the pandemic, officials said.
“Our unique model of care and coverage enabled our members to maintain continuity of healthcare coverage and remain with their established care providers despite job loss, income reduction, business closures and the economic downturn driven by the global pandemic,” said Kathy Lancaster, Kaiser’s executive vice president and financial officer.
Kaiser, however, faced higher expenses last year. The system reported total operating expenses jumped to $86.5 billion, a 6% spike from the $81.8 billion spent in 2019.
Hospital systems across the country have faced higher expenses for critical drugs and supplies to fight the pandemic such as personal protective equipment and ventilators. Systems also must face higher expenses for staff as prices for travel nurses have soared.
Kaiser did provide a large amount of virtual care during 2020 as providers flocked to telehealth to treat hesitant patients who were afraid to head to the hospital or doctor’s office.
“In 2020, Kaiser Permanente provided more than 31 million telehealth visits (scheduled telephone and video visits), enhancing care while providing increased safety and convenience for its members,” the system’s earnings report said.
Kaiser is the latest health system to end 2020 on a high note financially. Major hospital chain HCA Healthcare reported a profit of $1.4 billion for the fourth quarter of the year on the back of $14.3 billion in revenue.