Kaiser Permanente pushed its annual operating revenues to new heights last year thanks to the addition of its value-based care subsidiary Risant Health.
The integrated nonprofit health system shared Friday that it brought in $115.8 billion in operating revenues across 2024, up 14.9% from the prior year. Operating expenses also leapt 14.6% to $115.2 billion.
Taken together, Kaiser and new Risant acquisitions Geisinger Health and Cone Health posted an operating income of $569 million (0.3% operating margin) for the year.
Kaiser considered this a “modest improvement” over 2023’s $329 million that the organization said was held in check by “significant financial pressures in 2024 such as high prescription drug prices, high costs of goods and services, and increased care volumes, especially in ambulatory care settings."
"To offset these factors, the organizations improved operational efficiencies and streamlined business functions," Kaiser Permanente said.
Net income more than tripled to $12.9 billion due to reporting the unrestricted assets of Geisinger and Cone as $6.8 billion in one-time net income. Also contributing to the bottom line was $5.5 billion of nonoperating income largely attributed to financial market investment returns.
Capital spending in 2024 ran to $3.7 billion, a slight cutback from 2023’s $3.8 billion, and was primarily focused on meeting earthquake safety standards set to go into effect in California by 2030, ensuring environmentally sustainable facilities and investing in “leading-edge technologies.”
“Our financial performance in 2024 showed a modest improvement in operating income and, like others, we saw gains in nonoperating income driven by investment returns in the financial markets,” Kaiser Permanente Executive Vice President and Chief Financial Officer Kathy Lancaster said in Friday’s release. “This financial performance, along with carefully managing our resources and becoming more effective in our operations, allowed us to maintain investments in our capital and technology programs to drive affordability and enhance the consumer experience.”
Across Kaiser Permanente and Risant Health, the organization now comprises 55 owned hospitals, 841 medical offices, 40 retail and employee clinics and more than 13 million health plan members as of Dec. 31. Its release highlighted $4.6 billion of community health program investments in 2024, up from $3.1 billion in 2023.
Risant Health was unveiled in early 2023 alongside a $5 billion funding commitment and plans to acquire about half a dozen regional health systems over five years.
Its member systems operate separately from Kaiser’s core model of a closed integrated care network but together benefit from a tech-backed value-based care platform that the organization said will drive better care with lower spending. Officials say they want the subsidiary to reach total revenues in the range of $30 billion to $35 billion.