Kaiser Foundation Hospitals and Health Plan had a strong start in 2014 as membership grew and the payer-provider cut expenses. That performance allowed it to finish the year with a stronger operating margin than in fiscal 2013, even as fourth-quarter performance lagged.
Kaiser posted an operating loss of $66 million for the fourth quarter, compared with an operating surplus of $117 million in the prior-year period. Revenue increased to $14.2 billion, up from $13.5 billion in the fourth quarter of 2013.
The results were disclosed in a release accompanying its 2014 earnings report.
For the full year, the Oakland, Calif.-based system reported an operating surplus of $2.2 billion on $56.4 billion in revenue, for an operating margin of 3.9%. In 2013, its operating surplus totaled $1.8 billion on revenue of $53.1 billion, for an operating margin of 3.4%.
Membership in Kaiser's health plan increased by more than 510,000, reaching 9.6 million at year-end. More than two-thirds of its revenue comes from members' dues.
Its stronger financial performance will allow it to offer lower premium increases for 2015, Chief Financial Officer Kathy Lancaster said in the release.
Kaiser also decreased its capital spending as it finished its upgrades on three facilities to bring them up to earthquake safety standards. The system spent $2.8 billion in 2014, down from $3.3 billion the previous years.
Non-operating income for the year declined to $895 million from $1 billion in 2013.
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