Kaiser Foundation Hospitals and Health Plan had a strong start in 2014 as membership grew and the integrated delivery system cut expenses. That allowed it to finish the year with a stronger operating margin than in 2013, even as its fourth-quarter performance lagged.
Kaiser posted an operating loss of $66 million for the final quarter compared with an operating surplus of $117 million in the prior-year period. Revenue rose to $14.2 billion, up from $13.5 billion in the year-ago period. For the year, the system posted an operating surplus of $2.2 billion on revenue of $56.4 billion, for an operating margin of 3.9%. Its 2013 operating surplus totaled $1.8 billion on revenue of $53.1 billion, for a margin of 3.4%.
Health plan membership increased by more than 510,000, reaching 9.6 million at year-end. More than two-thirds of its revenue comes from member premiums.
Kaiser's stronger financial performance will allow it to offer smaller premium increases, Chief Financial Officer Kathy Lancaster said in the release.
Kaiser also decreased its capital spending as it finished upgrades on three facilities to bring them up to earthquake-safety standards. It spent $2.8 billion in 2014, down from $3.3 billion the previous year.