After sustaining large losses last year, Kaiser Permanente returned to the black in the first quarter with an additional boost from the financial markets.
Oakland, California-based Kaiser reported Friday first-quarter net income of $1.21 billion, compared with a net loss of $961 million in the year-ago period. Revenue increased 4.2% to $25.22 billion. Expenses overall rose 3% to $24.99 billion, including higher labor costs and higher prices for goods and services.
Non-operating income came in at $975 million, compared to a loss of $889 million in the first quarter of 2022, largely driven by investment gains.
Operating income totaled $233 million, up from a loss of $72 million a year earlier.
To limit expenses, Caesars cut some discretionary expenses, such as executive and employee travel, and will continue to scrutinize the number of employees, especially administrative roles, Tom Meier, the corporate treasurer, said in an interview.
“We are all being asked to hold onto our budgets and even to see if there are opportunities to reduce our costs as we head into the rest of this year, So that we have a good run rate as we enter 2024.” Said.
Kaiser, which operates 39 hospitals and more than 700 medical offices, said in a news release that it increased clinical hiring by 15% year-over-year in the first quarter, as the system expands its focus on contract labor. Continues to reduce dependency. Meier said wage rates are mostly locked in until September, when about 88,000 workers come up for contract renewal. Labor unions represent about three-quarters of Kaiser’s workforce.
Kaiser’s latest financial results come about a week after the system announced plans with Danville, Pennsylvania-based Geisinger Health. Create a Nonprofit That Buys Health Systems To create a national care network. Kaiser pledged to invest up to $5 billion over the next five years in a nonprofit called Resent Health. Caesars CEO Greg Adams said last week he wants Resent to grow into a $30 billion to $35 billion organization during that time frame.