Kaiser Permanente reported a $1.1 billion net loss in the first quarter, but the Oakland, Calif.-based health system's finances are expected to bounce back, Chair and CEO Greg Adams told the San Francisco Business Times.
Like other health systems across the U.S., Kaiser experienced a drop in revenue after suspending elective procedures to save supplies and capacity for COVID-19 patients. Despite the financial damage from the pandemic, Kaiser ended the first quarter of this year with operating income of $1.3 billion, down from $1.5 billion a year earlier. The health system's $1.1 billion net loss in the first quarter was primarily driven by investment losses totaling $2.4 billion.
Though Kaiser took a hit in the first quarter, it is not in a dire financial situation.
"We looked at our financial plan and we will be off budget for the year, but we will do fine," Mr. Adams told the San Francisco Business Times.
Kaiser, a nonprofit system, has returned more than $500 million in grants it received through the Coronavirus Aid, Relief and Economic Security Act, Mr. Adams told the San Francisco Business Times. The funds are meant to cover lost revenue and increased expenses tied to the COVID-19 pandemic. The one exception was the $11.8 million Kaiser received for Maui Health.
Mr. Adams, who has served as CEO since December, said one of the system's top priorities is planning for the next surge of COVID-19 patients.
"Hospitals are working now, as we speak, to really think through with the state and design a plan for how we will respond to the next surge. And we certainly expect there to be a surge," Mr. Adams told the San Francisco Business Times. "We can't reduce or close the hospitals or the healthcare system to the degree that we did this time."