News
Kaiser Foundation Health Plan and Hospitals Financial Update in Q1 2024
Financial results
For the quarter ended March 31, 2024, Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their respective consolidated subsidiaries and affiliates (KFHP/H) reported operating revenues of $27.4 billion and operating expenses of $26.5 billion compared to operating revenues of $25.2 billion and operating expenses of $25.0 billion in the same period last year. Operating profit was $935 million in the first quarter of 2024, compared to operating profit of $233 million in the first quarter of 2023.
KFHP/H’s operating profit in the first quarter of 2024 was below historical first quarter trends that predated the pandemic. Continued cost pressures, familiar to the entire healthcare sector in the first quarter, included high utilization, acuity of care, and high costs of goods and services.
Other income (net of other expenses), excluding a one-time gain related to Risant Health Inc.’s (Risant Health) acquisition of Geisinger Health (Geisinger), totaled $1.8 billion in the first quarter, driven by favorable market conditions. financial market. Other income (net of other expenses) was US$975 million in the first quarter of 2023.
“At Kaiser Permanente, we continue to overcome the challenges facing healthcare to provide a high-quality, affordable healthcare experience to our nearly 12.6 million members,” said the president and CEO. Greg A. Adams. “I thank our dedicated employees and physicians for their continued efforts, which allowed us to improve first quarter performance compared to the previous year. Together, we are leading a national effort to make quality care more equitable and accessible for everyone.”
Historically, first quarter operating margin is strongest for KFHP/H due to the timing of the open enrollment cycle, followed by lower operating margins in the subsequent three quarters as expenses increase throughout the year while revenues remain relatively stable.
Membership
Kaiser Permanente’s membership as of March 31, 2024 was nearly 12.6 million, reflecting growth of nearly 66,000 members since December 31, 2023.
Capital expenditure
Capital expenditures in the first quarter were $808 million, compared to $930 million in the same period a year ago.
On February 6, 2024, Kaiser Permanente opened the Watts Medical Offices in Southern California, expanding the nearly 60-year legacy of the Kaiser Permanente Watts Counseling and Learning Center. The new facility provides high-quality primary and specialty care services to members living and working in the South Los Angeles area.
“In the first quarter, we executed on our strategy to ensure we had the right resources and capabilities to meet the evolving needs of our members while promoting accessibility,” said the executive vice president and chief financial officer. Kathy Lancaster. “Our financial performance and our integrated care and coverage model provide a stable foundation for us to remain resilient as healthcare continues to face headwinds.”
Risant Health and Geisinger
Risant Health, created by Kaiser Foundation Hospitals (KFH) in 2023, is a nonprofit organization with a vision to improve the health of millions of people by increasing access to value-based care and coverage. Risant Health operates separately and distinctly from Kaiser Permanente’s core model of integrated care and coverage, while building on Kaiser Permanente’s 80 years of experience in value-based care. Health systems that become part of Risant Health continue to operate independently as regional or community health systems that serve and meet the needs of their communities, providers and health plans while gaining expertise, resources and support through Risant Health’s value-based platform.
The KFHP/H enterprise includes integrated care and coverage under the Kaiser Permanente, KP Medical Foundation and Risant Health brands and their subsidiaries.
Geisinger, an integrated health system serving 1.2 million people and headquartered in Danville, Pennsylvania, was acquired by Risant Health on March 31, 2024, and as a result, as of the acquisition date, Geisinger’s financial statements are consolidated with KFH’s financial statements. Under generally accepted accounting principles, the resulting $4.6 billion increase in KFH’s consolidated unrestricted net assets is reported as a one-time non-operating gain for the KFHP/H company in the first quarter.