Kaiser Has Strong Quarterly Earnings

Kaiser Permanente reported sharply higher revenue and net income for the first quarter of 2014.

For the quarter ending March 31, Oakland-based Kaiser reported first-quarter net income of $1.1 billion, up 43% from the $765 million reported in the first quarter of last year. A significant portion of the boost to the bottom line came from Kaiser's investment income, which rose $105 million, to $324 million.

Revenue for the quarter was $13.1 billion, up 6% from the $13.1 billion reported a year ago. 

“Our first quarter 2014 performance demonstrates that we are making progress in our efforts to gain efficiencies and enhance our effectiveness, while maintaining our focus on high-quality care. Reducing our cost trends allow us to be more affordable to our members and customers,” said Kathy Lancaster, Kaiser's chief financial officer.

Kaiser did note that its first quarter tends to be stronger than subsequent reporting periods due to the timing of revenue and expense trends.

Membership during the quarter ticked up

 by 243,000, an increase of about 2.5%. It now stands at 9.3 million. The Kaiser Foundation Health Plan enrolled about 242,000 statewide through the Covered California health insurance exchange through the open enrollment period that ended March 31.

Capital spending for the quarter was $827 million, up about 6.5 percent from the $779 million that was spent in the year-ago quarter.

Kaiser also announced it would begin a campaign to greatly increase its use of solar panels at its medical and administrative facilities. It currently has a systemwide generating capacity of 11.3 million megawatts. It expects to expand that by as much as 50 million megawatts. A total of 100 of its worksites in California will be assessed for the potential addition of solar panels.

“It’s clear that changes in our climate are having an impact on human health,” said Kathy Gerwig, Kaiser's environmental stewardship officer. “Harnessing renewable energy to power the care we provide reflects our dedication to improving the health of our members and the communities we serve.”