Kaiser Permanente, the Oakland, Calif.-based integrated delivery network, reported another increase in its operating performance in the third quarter, ended Sept. 30, following up on a strong performance in the previous three-month period (PDF).
The 32-hospital group, which also includes health plan operations, continued to trim its expenses, pare capital spending and add new members.
Kaiser reported an operating surplus of $766 million on $14.3 billion in revenue for the third quarter compared with an operating surplus of $518 million on $13.2 billion in revenue in the year-ago period. Its operating margin improved to 5.4% compared with 3.9% in the third quarter of last year.
However, nonoperating income for the quarter declined nearly 5.4% to $228 million, a decrease from the prior year's $241 million.
Kaiser has been spending billions of dollars to upgrade its technology and facilities to build capacity for new members. Since the beginning of the year, it has added 442,000 members to its health plan, reaching 9.5 million members as of Sept. 30.
Its investments include upgrading three hospitals to comply with California earthquake standards: Kaiser Permanente San Leandro Medical Center, which opened June 3; Oakland Medical Center, which opened July 1; and the new Redwood City Medical Center, which is expected to open next month.
It also has opened 15 medical office buildings so far this year.
The system has spent $2.1 billion year to date, below the $2.3 billion it spent in the first nine months of last year.
Capital spending in the third quarter totaled $627 million, a 13.2% decrease over the year-ago period's $722 million.
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