COVID-19 puts squeeze on Kaiser Permanente’s 2020 financials

Dive Brief:

  • Amid a volatile year for the health sector Kaiser Permanente was able to remain in the black, though the COVID-19 pandemic did hamper operating and net income, which fell nearly 19% and 15%, respectively, compared with 2019.
  • Total operating revenue for the year did increase to $88.7 billion, rising slower than expenses, which increased to $86.5 billion. Investment income also came in lower than in 2019. Still, Kaiser, which operates a network of hospitals, clinics and its own health plan, ended the year with net income of about $6.4 billion.
  • Its health plan gained about 110,000 members, ending the year with total enrollment of 12.4 million, which the nonprofit said remained stable even amid record unemployment figures.

Dive Insight:

The industry is likely to closely watch the year-end financial results of the nation’s largest health systems to gauge the full impact of the novel coronavirus on bottom lines.

It’s of particular interest because the federal government provided billions of rescue funds to help prop up providers as the pandemic leveled in-person care during the early months of the outbreak.

Though as the year wore on, larger systems, including Kaiser Permanente and for-profit giant HCA Healthcare, returned some or all of the rescue funds they were allocated. Kaiser CEO Greg Adams said at the time that the system “will do fine.”

Kaiser did do fine in 2020, especially compared to its first quarter of the year when it reported a staggering $1.1 billion net loss, largely due to a slide in investments as the market reacted to the uncertainty brought on by the pandemic.

Adams said the year-end results reflect the strength of an integrated model “amid the unparalleled challenges of fighting COVID-19.”

All told, Kaiser treated almost 600,000 patients with COVID-19, 33,000 of which were hospitalized. The system also administered 4.8 million COVID-19 tests.

As the pandemic strained in-person visits, Kaiser said it conducted more than 31 million telehealth visits, which it defined as scheduled telephone and video visits.