Kaiser Permanente reported a net loss of $1.3 billion in the second quarter, down 144% from a year ago.

Operating income for Kaiser, a not-for-profit integrated health system, fell nearly 75% year-over-year to $89 million. Expenses rose 0.2% to $23.38 billion, while revenue fell 0.9% to $23.47 billion. Kaiser’s operating margin was 0.4%.

The losses were attributed to investment market conditions.

Tom Mayer, corporate treasurer, said Kaiser lost about $1.4 billion in financial markets during the second quarter, as fixed income and equities underperformed, compared to an approximate loss of $900 million in the first quarter. COVID-related costs, such as testing and deferred care, are expected to continue for the foreseeable future.

He said Kaiser is sticking to its long-term investment strategy. Four of the past five years have brought in double-digit revenues.

Second-quarter results closed out roughly from the first half through 2022. Kaiser posted a net loss of $961 million in the first quarter, with expenses up 9.5% year over year, despite revenue increasing more than 4%. Kaiser attributed its problems in the first quarter to pandemic-related spending, rising costs and market conditions.

Oakland, California-based Kaiser spent $789 million on capital projects in the second quarter, down 8.7% from a year ago. Mayer previously said the health system is reevaluating its capital program. Earlier this year, Kaiser opened a 220,000-square-foot facility in Timonium, Maryland, with advanced urgent care, pharmacy services, and an ambulatory surgery center.

Kaiser, with a total of 12.6 million members, lost about 27,000 members in the second quarter, driven by a decline in commercial and individual memberships, as well as delayed reporting of terminations earlier in the year.

Amid financial problems, Kaiser executives also continue to clash with union workers. On August 15, more than 2,000 psychologists, therapists, counselors and union social workers in Northern California plan to strike to protest long wait times for patients seeking treatment sessions, according to an announcement last week from the National Federation of Health Care Workers.

The union accuses Kaiser of failing to “invest adequately in additional staff; take steps to reduce burnout of existing staff; and do what is necessary to level mental health clinics with other health services.” [organization] Provides.”

Deb Katsavas, Kaiser’s senior vice president of human resources, said the union’s proposal last week has pushed the two sides apart, and the health system has contingency plans in place in the event the union goes on strike. Meyer declined to give details of those plans.

Kaiser mental health doctors have threatened multiple strikes over pay and employment concerns. The health system narrowly avoided the strike in November.

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