Kaiser Permanente reported a $1.3 billion net loss in the second quarter, a 144% plunge from a year ago.
Operating income for Kaiser, a not-for-profit integrated health system, fell nearly 75% year-over-year to $89 million. Expenses rose by 0.2% to $23.38 billion, while revenue fell 0.9% to $23.47 billion. Kaiser's operating margin was 0.4%.
It attributed the losses to investment market conditions.
Tom Meier, corporate treasurer, said Kaiser lost about $1.4 billion in the financial markets during the second quarter, as fixed income and equities underperformed, compared with an approximate loss of $900 million in the first quarter. COVID-related costs, such as testing and deferred care, are expected to continue for the foreseeable future.
He said Kaiser is sticking with its long-term investment strategy. Four of the last five years have brought double-digit returns.
The second-quarter results closed out a rough first half to 2022. Kaiser reported a net loss of $961 million in the first quarter, with expenses up by 9.5% year-over-year, although revenue increased by more than 4%. Kaiser attributed its first-quarter woes to pandemic-related spending, rising costs and market conditions.
Oakland, California-based Kaiser spent $789 million on capital projects in the second quarter, down 8.7% from a year ago. Meier previously said the health system is reassessing its capital program. Earlier this year, Kaiser opened a 220,000-square-foot facility in Timonium, Maryland, with advanced urgent care, pharmacy services and an ambulatory surgery center.
Kaiser, with a total 12.6 million members, lost about 27,000 members in the second quarter, driven by decreases in commercial and individual membership, plus delayed reporting on terminations earlier in the year.
Amid financial troubles, Kaiser executives also continue to clash with union workers. On Aug. 15, more than 2,000 union psychologists, therapists, counselors and social workers in northern California plan to strike to protest months-long wait times for patients seeking therapy sessions, according to an announcement last week from the National Union of Healthcare Workers.
The union accuses Kaiser of failure to “adequately invest in additional staff; take steps to reduce the burnout of current employees; and do what is necessary to bring its mental health clinics into parity with other health services the [organization] provides.”
Deb Catsavas, senior vice president of human resources at Kaiser, said a proposal presented by the union last week pushed the two sides farther apart, and the health system has contingency plans in place should the union go on strike. Meier declined to give details on those plans.
Mental health clinicians at Kaiser have threatened multiple strikes over pay and staffing concerns. The health system narrowly avoided a strike in November.
