Kaiser Permanente reported net income of $4.5 billion for the second quarter ended June 30, more than double the $2 billion in net income it reported for the prior-year period.
The California-based integrated health system’s operating revenues increased more than 3% to $22.1 billion while expenses dipped 1.5% to $20 billion. Operating income surged 90% to $2.1 billion compared to the second quarter of 2019.
Its operating margin improved substantially, hitting 9.4% compared to 5.2% a year ago, according to the financial information posted Friday.
The second quarter was an important marker for the hospital sector as it captured the full brunt of the COVID-19 pandemic, which was beginning to take hold and strain operators at the tail end of March.
For many, hospital volumes plunged as they adhered to state and local governments mandates on pausing elective procedures to brace for a potential surge of patients while also preserving needed resources such as personal protective equipment.
Despite the strain on operations, all the for-profit hospital operators, which finished reporting second-quarter results last week, noted an uptick in net income thanks to financial rescue packages appropriated by Congress.
Kaiser received $14 million in funding from the Coronavirus Aid, Relief, and Economic Security Act. CEO Greg Adams told the San Francisco Business Times in June it had returned about $500 million and “will be fine” despite the pandemic.
The hospital lobby continues to urge Congress to release more federal funds for hospital operators as they weather the pandemic, particularly in the South and West.
Kaiser, a massive health system, rebounded in the second quarter after reporting a staggering $1.1 billion loss in the first quarter, which was largely tied to investment losses due to the stock market slide, fueled by the pandemic.
“Deferred elective surgeries and procedures due to stay-at-home orders across the communities we serve contributed heavily to our second quarter results by temporarily reducing our operating expenses,” Kaiser CFO Kathy Lancaster said in a statement.
It has now reintroduced care that was halted during the initial months of the outbreak, Kaiser said in a statement. It has also leveraged telehealth to keep members connected to care, noting it has passed the 15 million visit mark.
As the novel coronavirus continues to ravage the economy, Kaiser said it has started to see loss in its commercial membership, though it did not disclose specific figures. It noted that some have switched to Medicaid membership while others have lost coverage altogether.
Kaiser’s total insurance membership reached 12.4 million as of June 30, an increase of 183,000 members since December.