Kaiser posts $4.5 billion net loss in 2022 amid staffing shortages and economic headwinds

Oakland, Calif.-based Kaiser Permanente posted a net loss of $4.5 billion in 2022, compared to a net profit of $8.1 billion in 2021, according to financial results released Feb. 10. Its operating margin decreased from 0.7% in 2021 to -1.3% in 2022.

The move from net profit in 2021 to net loss in 2022 reflects an increase in health care costs driven by inflation, high COVID-19 spending, continued labor shortages and increased volume, says Kaiser, an integrated healthcare provider with 39 hospitals. medical care.

For the 12 months ended Dec. 31, Kaiser recorded operating revenue of $95.4 billion, up 2.4% from $93.1 billion in 2021. However, Kaiser’s operating expenses rose 4.5% from $92.5 billion to $96.7 billion in 2022.

In 2022, Kaiser reported an operating loss of $1.3 billion compared to operating income of $611 million the previous year.

The increase in operating expenses was driven by an increase in the volume of medical care, an increase in the cost of goods and services, additional external costs for care in contracted hospitals, rising labor costs, and an increase in care and testing for COVID-19. Capital expenditures were $3.5 billion, in line with $3.5 billion spent the previous year.

Kaiser said strong economic turmoil in financial markets led to a $3.2 billion decline in total other income and expenses in 2022, compared to a $7.5 billion profit in 2021.

“Instead of retreating due to financial pressure, we have made the decision to continue our long-term and strategic investment in improving care and service while carefully managing resources,” Kaiser CEO Greg Adams said in a press release. “Our staff and physicians have worked hard to meet the needs of our members and I am grateful for their outstanding contributions.”

Kaiser invested $2.8 billion in public health programs in 2022, up from $2.6 billion in 2021, according to the financial report. Its financial assistance program has provided nearly 320,000 low-income and uninsured patients with more than $433 million to cover some or all of their medical expenses.

Kaiser health plan membership also increased by 36,000 members in 2022. It now has over 12.6 million members.

“Kaiser Permanente continues to manage costs responsibly and is focused on providing high-quality care to its 12.6 million members,” said Tom Meyer, senior vice president and corporate treasurer. Overview of the Becker Hospital. “Despite the economic and pandemic challenges facing the industry, we remain committed to investing in our long-term strategic goals, including improving patient care, community health, capital programs and our technology investments.”

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