Despite a rough financial start to the year, Kaiser Permanente says its overall operating performance is strong.
Kaiser Permanente has been feeling the effects of COVID-19 as its most recent financial report shows the California-based health system has been bombarded with expenses related to the ongoing crisis and the labor shortage.
According to the earnings report, in the first quarter of 2022, a rise in COVID-19 cases resulted in an additional $1.4 billion in expenses for Kaiser Permanente. Total operating expenses jumped year-over-year to $24.3 billion from $22.2 billion. Kaiser also reported a net loss of $961 million, versus a net income of $2 billion for the same period in 2021.
During the first quarter of 2022 Kaiser said it dealt with the steepest surge in COVID-19 cases since the onset of the pandemic which led to an increase in demand for care and testing. The organization also had an increase in expenses related to caring for patients who had put off seeking certain treatments at the height of the pandemic, the report said.
Despite the bleak start to the year, Kaiser Permanente executives are maintaining a positive outlook for the future.
"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 by 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 CFO, with Kaiser said in the earnings release.
"As we face the ongoing uncertainty and prolonged effects the pandemic is having on the health care 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,” Lancaster said.
During the first quarter, Lancaster says the organization was able to maintain control over its discretionary spending while also caring for over 688,000 COVID-19 patients and addressing its backlog of surgical procedures. CEO Greg Adams shares Lancaster’s optimism for the future.
"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," Adams said. "Our underlying operating performance remains solid and aligned with expectations."
Amanda Schiavo is the Finance Editor for HealthLeaders.