Kaiser Permanente reports nearly $1B loss over COVID surge
California-based health system Kaiser Permanente was slammed by a surge in COVID-19 cases during the first quarter of 2022, playing a role in a nearly $1 billion loss in the first three months of the year.
Kaiser recently reported its first quarter earnings, including a net loss of $961 million. That’s compared to net income of $2.0 billion in the same time period in 2021. For the quarter, Kaiser reported total operating revenues of $24.2 billion and total operating expenses of $24.3 billion. The report highlights the continued struggle for health systems dealing with the COVID-19 pandemic.
Kaiser reported the steepest surge in COVID-19 cases since the start of the pandemic during the first quarter, leading to an additional $1.4 billion in COVID-19 expenses. Kaiser cared for 688,000 patients with COVID-19, including more than 26,000 hospitalized patients. The health system also performed 2.5 million COVID-19 diagnostic tests, supplied 1.3 million COVID-19 home tests and administered 1.4 million vaccine doses. Those added expenses were part of the loss, as were additional costs of providing care to members who deferred earlier in the pandemic. In addition, Kaiser reported it experienced higher labor costs.
“While in the first quarter, the ongoing effects of the pandemic strained our workforce, communities, and operations, our operating model, which provides both care and coverage, enabled us to continue providing that care even in the face of an unprecedented omicron surge and industrywide labor shortage,” Greg A. Adams, chair and CEO of Kaiser Permanente, said in a statement. “Our underlying operating performance remains solid and aligned with expectations.”
The earnings report comes as Kaiser recently opened a new, 220,000-square-foot medical facility in Timonium, Maryland. The healthcare organization scrapped plans to build a new, $900 million headquarters in Oakland, California, in March 2020.
Despite the quarterly losses, Kaiser executives were bullish on the organization’s position. Kaiser also reported it had 12.6 million members as of March 31, 2022––a jump of more than 88,000 members since the end of 2021.
“While the increase in pandemic-related expenses, overall rising costs, and investment market losses impacted our finances this quarter, Kaiser Permanente navigated this challenging time providing high-quality care and continued investing in our integrated model including ongoing capital investments to best serve our members…” Kathy Lancaster, executive vice president and chief financial officer, said in a statement. “As we face the ongoing uncertainty and prolonged effects the pandemic is having on the healthcare industry, we are well positioned to continue delivering high-quality, affordable care and remain vigilant stewards of resources entrusted to us in this dynamic environment.”
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."