Kaiser Permanente reports $8.1B net profit in 2021 despite shrinking operating income

While COVID-19-related expenses largely offset a rise in operating revenues, a “sharp increase” in Kaiser Permanente’s investment returns helped the integrated health system record $8.1 billion in net income during 2021.

That safely outpaced the $6.4 billion the health system logged last year.

Kaiser Permanente’s topline financial results for the past year, released Friday evening, also showed a membership increase of nearly 185,000 people, bringing its total to 12.5 million as of Dec. 31, 2021. The organization credited government coverage programs for much of the growth, noting that more than half of the increase was driven by Medicaid.

“Despite additional [COVID-19] surges, our members continued to receive in-person preventive, routine and elective care,” Executive Vice President and Chief Financial Officer Kathy Lancaster said in a statement. “Our financial performance underscores the strength of our integrated model, which allows us to weather unexpected challenges such as the COVID-19 pandemic while continuing to serve our members.”

Kaiser Permanente reported $93.1 billion in total operating revenues during 2021, up from $88.7 billion the prior year. Operating expenses were $92.5 billion versus last year’s $86.5 billion, which translated to respective operating incomes of $611 million (0.7% operating margin) and $2.2 billion (2.5% operating margin).

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Thanks to investments buoyed by the year’s “robust financial markets,” Kaiser Permanente’s “total other income and expense” tab jumped from $4.1 billion in 2020 to $7.5 billion in 2021, the system reported.

Capital spending dipped down to $3.5 billion in 2021 from the prior year’s $4 billion. Kaiser Permanente also reported investing $2.6 billion into community health programs and providing more than $460 million toward the care of 370,000 patients through its financial assistance program.

Kaiser Permanente’s release highlighted the total 28.8 million telehealth visits and 15.9 “e-visits” the system delivered throughout the year. It also underscored the organization’s COVID-19 services, which totaled care for more than 800,000 COVID-19 patients, inpatient care for more than 60,000 COVID-19 patients, 9.4 million COVID-19 diagnostics tests and over 10.5 million administered doses of vaccines and boosters.

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“After almost two years, the COVID-19 pandemic continues to impact Kaiser Permanente just as it does our daily lives,” Chair and CEO Greg A. Adams said in a statement. “We rapidly rolled out vaccines, and now boosters and administered more than 9 million COVID-19 tests while managing new and unpredictable variants like delta and omicron as they surfaced. Throughout this crisis, gratitude goes to our dedicated employees and physicians who have remained focused on providing care and strong support for members and communities.”

With 11 new medical offices opened during the year, Kaiser Permanente now comprises 734 medical offices, 39 hospitals and 58 retail and worksite clinics, according to the integrated nonprofit system.