Despite posting slightly higher operating revenue in the second quarter of 2018, Kaiser Permanente reported a 55% drop in operating income during the period.
The not-for-profit Oakland, Calif.-based system’s operating income totaled $345 million in the second quarter, compared with $772 million during the prior-year period. That’s despite an 8% increase in operating revenue to $19.6 billion during the quarter, compared with $18.1 billion during the same period in 2017.
Kaiser, the nation’s largest integrated healthcare provider, saw improved non-operating income during the quarter, rising to $308 million compared with $240 million in the second quarter of 2017. That resulted in net income of $653 million during the quarter, a 35% drop from $1 billion in the 2017 period.
Membership in Kaiser’s health plan was 12.2 million as of June 30, reflecting 453,000 new members since the end of 2017.
Kaiser reported spending $735 million on capital projects during the quarter, including opening new facilities and upgrading others, as well as adding technology. The health system opened five new medical offices during the quarter, all in California: Downtown Commons Medical Office in Sacramento, Skyport Medical Office in San Jose, Mercury Way Medical Office in Santa Rosa and mental health services offices in San Mateo and Hesperia. With the additions, Kaiser now has 689 medical office locations and 39 hospitals.
Two Emory Healthcare hospitals in the Atlanta area will become primary hospitals for Kaiser physicians and members starting in October, the two health systems announced in June. Kaiser provided an undisclosed capital contribution to expand both facilities.
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