Oakland, Calif.-based Kaiser Permanente recorded higher revenue for its nonprofit hospital and health plan units in the first half of fiscal year 2018; however, the system ended the period with a decline in net income.
For the six months ended June 30, the health system recorded $39.9 million in operating revenue, up about 10 percent from the $36.2 billion in operating revenue it reported in the same period a year ago. Year-over-year increases in health plan member dues and Medicare revenues, thanks to an uptick in membership, contributed to the improvement, according to unaudited bondholder documents. As of June 30, Kaiser had 12.2 million members, up from 11.8 million in December 2017.
Kaiser saw total operating expenses across its hospitals and health plan rise to $38.5 billion in the first half of 2018. That's up about 11 percent from the $34.6 billion in operating expenses the health system reported in the same period last year.
Lower gains on investment income dragged Kaiser's operating income down 12 percent year over year to $1.4 billion in the first half of 2018. That's compared to $1.6 billion in the same period a year prior.
After incorporating other income and expenses, which declined year over year, Kaiser ended the first six months of 2018 with net income of $2 billion, down nearly 21 percent from the $2.6 billion the health system reported in the same period of 2017.