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Kaiser expands operating margin

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Kaiser Permanente, the huge integrated health and insurance system,  had a $1 billion operating gain in the first quarter of 2017 with $18.1 billion in revenue. That’s way up from the year-earlier  $701 million operating gain on  $16.3 billion in revenue.

The system had a 5.5 percent operating margin in the first quarter, up from  4.3 percent in the first quarter of 2016.

KP has  been quite successful in  shifting to value-based care and increasing use of telemedicine.

Kaiser Permanente’s CEO, Bernard Tyson, recently said more than half of KP members’ physician visits were virtual, partly because $3.8 billion of its annual capital spending is IT-related.

The organization has long been know for its high quality of care and emphasis on preventive care, its salaried physicians (which means less likelihood 0f unneeded, fee-for-service procedures to drum up income), and efforts to minimize the time that patients spend in high-cost hospitals.

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