Investment Dip Hits Kaiser Earnings

Kaiser Permanente reported a bump upward in revenue and enrollment for the second quarter ending June 30, but its overall net income was down by 22%.

Revenue for the Oakland-based hospital and health plan operator reached $12.6 billion for the quarter, up 6% from the $11.9 billion in revenues reported during the second quarter of 2011.

Total net income was $514 million, compared to $663 million for the year-ago quarter. Kaiser spokesperson Laura Dunn attributed the dip to the organization’s investments.

“Our non-operating income comes from our investment portfolio and consists of a broad array of fixed income and equity products. These are subject to the volatility and fluctuations in the market, as any investment would be,” Dunn said in an e-mail. “For the second quarter, the Dow Jones Index is down 2.5% and the Standard & Poor’s Index is down 3.25% – our investments tend to mirror this.”

By contrast, operating income was up 8.1% for the quarter, reaching $424 million, compared to $390 million for the second quarter of 2011. 

Kaiser has spent $1.6 billion on capital investments during the first half of the year, up from $1.4 billion during the first half of 2011. The system has opened 13 new and replacement hospitals and 75 medical office buildings over the past five years.

Systemwide enrollment grew by 87,000 since the start of 2012, and is now 9 million.