Kaiser Permanente posts $1.1B in first half profits, but sees Q2 income sink
Written on August 9, 2010
Kaiser Permanente said Friday that its nonprofit hospitals and health plan posted a far smaller operating income tally and made far less net income in this year’s second quarter than 2009’s, while ending the first half with an identical $1.1 billion in net income.
Oakland-based Kaiser Foundation Hospitals, Health Plan and subsidiaries had operating revenue of $11 billion for the second quarter, ended June 30, up nearly 5 percent from the same quarter in 2009, when the huge nonprofit organization had $10.5 billion in operating revenue.
But operating income plummeted nearly 24 percent, from $411 million last year to $313 million in 2010's second quarter. Net non-operating income was $91 million in this year's second quarter, less than half the $209 million Kaiser netted in the same period last year. As a result, net income sank 35 percent, from $620 million a year ago to $404 million in 2010’s second quarter.
Kaiser doesn’t provide financial information about its for-profit Permanente Medical Groups, and typically provides only high-level summaries of its financial and operational results.
Enrollment jumped by 47,000 members to 8.6 million as of June 30. Capital spending for the second quarter was $576 million, roughly comparable to last year’s $558 million second-quarter tally.
“We are pleased by our overall year-to-date net income, which is consistent with our performance for the same period last year,” Kathy Lancaster, Kaiser’s executive vice president and chief financial officer, said in the Aug. 6 statement. “Through our financial performance we are able to support our capital expenditures as well as our ongoing efforts to deliver high-quality, affordable health care.”
However, Kaiser gave no immediate indication of why its operating income and net income fell dramatically in this year’s second quarter, compared to the same period a year ago.
For the first half of the year, Kaiser’s operating revenue was $22 billion, compared with $21.1 billion a year earlier. First-half operating income fell 21 percent from $1 billion last year to $794 million for this year’s first half, although net non-operating income, at $316 million, was more than 20 times higher than 2009’s first half total of $15 million.
Nonetheless, net income for the first half was virtually identical to last year’s first-half tally of $1.1 billion, Kaiser said, without providing exact details.
Capital spending for the first half was also nearly identical to last year’s first-half total, at $1 billion compared to $1.1 billion last year.
Filed in: money.