Kaiser Permanente reports $4.5B in Q2 net income as COVID-19 drives down operating costs

The side of a building that reads "Kaiser Permanente"
Kaiser Permanente released its second-quarter financials on Friday. (Sundry Photography/Shutterstock)

Kaiser Permanente earned $4.5 billion in net income in the second quarter after a "challenging" Q1, as deferred procedures under the pandemic drove down operating costs.

The healthcare giant reported $22.1 billion in revenue across its hospitals and health plan in Q2, in line with operating revenue of $21.4 billion in the second quarter of 2019.

"Deferred elective surgeries and procedures due to stay-at-home orders across the communities we serve contributed heavily to our second quarter results by temporarily reducing our operating expenses,” said executive vice president and chief financial officer Kathy Lancaster.

“As we continue to face uncertain times due to the COVID-19 pandemic, economic volatility, and societal unrest, Kaiser Permanente remains committed to our mission of providing quality care for more than 12 million members and improving health in our communities," Lancaster said.

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The health system invested $907 million in capital spending in the second quarter, which included investments in expanding care delivery under the pandemic. As part of its pandemic preparations, Kaiser Permanente reconfigured its hospitals and added clinical capacity to double its ability for inpatient care, if needed.

For the first half of 2020, Kaiser Permanente brought in $44.7 billion in revenue and $3.4 billion in net income. Its operating margin is 7.4%.

Kaiser Permanente's health plan membership was 12.4 million as of June 30, the health system said, representing growth of close to 180,000 members in the first six months of the year.

The health plan arm said it has seen declines in commercial membership due to job losses, and it's planning for membership mix shifts "to continue through 2021."

As of June 30, Kaiser Permanente covered 900,000 people in Medicaid.