Kaiser Permanente, the Oakland, Calif.-based system that operates 38 hospitals as well as its own health plan, continues to grow as it adds new members.
The integrated delivery network has added 524,000 members since Dec. 31, bringing the total to 10.1 million members. Kaiser does not otherwise break out the number of admissions.
The combination of new members as well as a laser focus on managing its expenses led to a small uptick in its second-quarter financial performance. Kaiser reported an operating margin of 5% for the period compared with 4.7% in the second quarter of 2014.
Its operating surplus was $760 million on $15.3 billion in revenue compared with an operating surplus of $652 million on $14 billion in revenue for the second quarter of 2014.
Kaiser has one of the lowest expense trends in the industry, said Tom Meier, senior vice president and corporate treasurer. Expenses have increased less than 2% so far this year, after the system also held its expense growth below 2% in 2014.
Spending on capital projects also continued to slow this year. Kaiser spent $576 million in the second quarter, a 6.2% decrease over the $614 million it spent during the same period last year. Its year-to-date capital spending totaled $1.3 billion as of June 30, below the $1.4 billion it spent in the prior-year period.
Kaiser, which operates hospitals in three states and has medical groups and medical offices in eight states and the District of Columbia, completed upgrades to its facilities to meet seismic requirements as of Jan.1, shifting its attention to other projects. “The focus is more on medical office buildings and technology,” Meier said.
The slow and steady quarterly uptick has been an ongoing theme for Kaiser in recent quarters. Meier described the results as flat but said they were in line with expectations. He declined to provide an outlook for the remainder of the year.
