Kaiser Foundation Health Plan and Hospitals Report 2019 Annual Financial Results
OAKLAND, Calif., Feb. 7, 2020 /PRNewswire/ -- Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and their respective subsidiaries (KFHP/H) reported 2019 annual financial results. Total operating revenues for 2019 were $84.5 billion, compared to $79.7 billion in 2018. Operating expenses were $81.8 billion, compared to $77.8 billion in the prior year. Operating income was $2.7 billion, or 3.2% of operating revenues, compared to $1.9 billion in 2018, or 2.4%. Over the past decade, operating income has averaged 3.1% of operating revenues, demonstrating consistent operating performance.
“Our solid 2019 operating performance and strong investment returns position Kaiser Permanente to continue delivering on our deep and long-standing commitment to provide high-quality, affordable health care and coverage,” said chairman and chief executive officer Greg Adams. “For example, in 2020, we have decreased out-of-pocket costs and improved benefits for many of our Medicare Advantage members, kept individual and family plan rate increases on average at or below the expected rate of inflation, and increased our medical financial assistance. As a not-for-profit, Kaiser Permanente’s net income goes directly to our core mission of providing high-quality, affordable health care to our members and to improving the health of the communities we serve.”
The strong investment markets throughout the year resulted in total other income and expense of $4.7 billion in 2019, compared to $0.6 billion in 2018. Combining this total other income and expense with operating results, 2019 net income was $7.4 billion, with nearly two-thirds of net income coming from investment performance. Like many other organizations, Kaiser Permanente benefited from strong market performance.
Membership as of December 31, 2019, was 12.2 million, an annual increase of more than 81,000 members. Capital spending remains steady at $3.5 billion in 2019, compared to $3.4 billion in 2018.
Building the future
In 2019, Kaiser Permanente opened 17 new medical offices, which support its ability to bring its unique total health model to the communities it serves. As of December 31, 2019, the Kaiser Permanente system includes 712 medical offices, 39 owned and operated hospitals, and 50 retail and employee clinics. Kaiser Permanente has more than 95 new medical offices in active design or construction phases that are expected to open over the next five years.
Kaiser Permanente also continued its significant $700 million multi-year expansion of mental health care facilities, including plans to add and or renovate more than 220 mental health provider offices.
“Our financial results allow us to make capital investments, deploy new technologies and drive affordability for our members,” said executive vice president and chief financial officer Kathy Lancaster. “They position Kaiser Permanente to be innovative in a rapidly changing environment.”
Improving community health
Kaiser Permanente supports a wide range of community health programs to provide care and coverage to low-income individuals, address housing instability, train health professionals and improve the conditions for health in the communities it serves. In 2019, Kaiser Permanente spent $3.4 billion on Community Health programs representing 4.1% of its operating revenues. Of note, Kaiser Permanente’s Medical Financial Assistance program helped nearly a half-million patients in 2019, providing low-income, uninsured or underinsured patients more than $550 million in assistance to cover part or all of their medical expenses.
Kaiser Permanente continues to invest in technologies that enhance care and provide our members convenient and secure access to a broad range of information, services, and transactions through the kp.org member portal and digital apps. Currently, members access these secure features over 1 million times per day. In 2019, members requested nearly 35 million prescriptions via digital channels and viewed over 60 million lab results online. Patient interactions through video visits have increased 40% over 2018.
2019 and 2018 financial summary
($ in millions)
Total operating revenues
Total other income and expense
Note: Effective January 1, 2019, KFHP/H adopted the provisions of ASU 2016-01, Financial Instruments — Overall, which requires that changes in estimated fair value for equity securities be recognized in total other income and expense. Previously, changes in estimated fair value were recorded on the balance sheet within net worth as unrealized gains or losses.
Certain statements included in this document may constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used, such as “plan,” “project,” “forecast,” “expect,” “estimate,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, or achievements described to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Accordingly, actual results will vary and the variations may be material. None of the KFHP/H organizations plan to issue any updates or revisions to those forward-looking statements if or when expectations change, or events, conditions, or circumstances on which such statements are based occur.
About Kaiser Permanente
Kaiser Permanente is committed to helping shape the future of health care. We are recognized as one of America’s leading health care providers and not-for-profit health plans. Founded in 1945, Kaiser Permanente has a mission to provide high-quality, affordable health care services and to improve the health of our members and the communities we serve. We currently serve 12.2 million members in eight states and the District of Columbia. Care for members and patients is focused on their total health and guided by their personal Permanente Medical Group physicians, specialists and team of caregivers. Our expert and caring medical teams are empowered and supported by industry-leading technology advances and tools for health promotion, disease prevention, state-of-the-art care delivery and world-class chronic disease management. Kaiser Permanente is dedicated to care innovations, clinical research, health education and the support of community health. https://about.kaiserpermanente.org
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SOURCE Kaiser Permanente