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Kaiser 2022 revenue; $68 billion. Net income; $925 million. CEO pay; $13.3 million base and $2.3 million "Other." [1] Kaiser Foundation Health Plan and Kaiser

Kaiser 2022 revenue; $68 billion. Net income; $925 million. CEO pay; $13.3 million base and $2.3 million "Other." [1] Kaiser Foundation Health Plan and Kaiser Foundation Hospitals earned a combined $100 billion in revenue in 2021 [2]. It's the highest-grossing non-profit organization in the USA and probably the world, lol...net income margins are slim though. 1- https://projects.propublica.org/nonprofits/organizations/941340523 https://projects.propublica.org/nonprofits/organizations/941.... 2- https://projects.propublica.org/nonprofits/states/CA https://projects.propublica.org/nonprofits/states/CA

jeffreyrogers 3y ago
That seems like a reasonable amount for the CEO of a massive health care system. Not an easy business to manage and someone who can manage a business that large could do lots of other things. Kaiser is also pretty efficient as far as health care organizations go.
- boeingUH60 3y ago
  Sure, I'm not complaining, just trying to provide context..
  - PaulHoule 3y ago
    Kaiser is a Colossus, it was more-or-less the first HMO. I've been reading about it in the context of health care economics since the 1980s. I was getting a test at the hospital in my town the other day and got asked by the technician about my job, which involves public opinion data, and that got into "why are people unhappy with the economy today?" which got into strikes, and she volunteered Kaiser as an example so people like her are very away this is going on.
- rightbyte 3y ago
  I am quite sure someone about as competent would do his job for far less. I got this feeling the higher you go the less skill based recruitment is and the more connections and friends matter.
  - boeingUH60 3y ago
    > I got this feeling the higher you go the less skill based recruitment is and the more connections and friends matter. That’s fact not feeling. There are very few positions at the top and an oversupply of skilled people willing to fill them. It becomes a matter of getting favored by the right people…sure executives put in the work but impressing the right people at the right time is how one progresses in the upper echelons.
    - dfadsadsf 3y ago
      There is oversupply of people willing to fill high level positions. Problem is that if you want people who have proven that they are skilled (aka successfully held equivalent or higher position at similar company) the pool is much smaller and competition for them is much higher. In addition executive leaving is very disruptive (takes 6+ months to find new one, etc) so you want to pay above average so he does not leave which leads to arms race in salaries. On what executive mishire can cause just look at recent events at Flexport. It takes 1+ year to understand that executive is failing and course correction is extremely expensive and disruptive.
      - hotnfresh 3y ago
        Promoting up from within, and grooming successors who started low down the ladder in the company, used to be common. Now we hire straight in from B-schools at VP or director level, and one of those ends up CEO eventually (if a CEO's not simply hired from outside, directly). This practice seems to have dramatically increased the cost of executives. I wonder if it's increased quality. [EDIT] OK not straight from b-school, they have to do a stint in management consulting or whatever first. Because having that be something that the totally inexperienced do makes complete sense.
        bumby 3y ago
        The idea of hiring straight from B-schools, without experience, tells me B-schools schools have decided to sell out to maximize student throughput. It used to be that very few people got accepted to B-schools without at least a decade or so of experience.
- derstander 3y ago
  > That seems like a reasonable amount for the CEO of a massive health care system. Not an easy business to manage and someone who can manage a business that large could do lots of other things. As far as US CEO salaries go, I agree that it doesn’t sound particularly egregious. Compare that with, say, Nintendo’s President, who makes the equivalent of $2.4 million. https://www.nintendo.co.jp/ir/pdf/2023/annual2303e.pdf https://www.nintendo.co.jp/ir/pdf/2023/annual2303e.pdf Executive pay in the US seems to be high compared to at least Japan. Are US executives really that much better than Japanese executives scored against objective metrics?
  - dfadsadsf 3y ago
    Japanese companies did not do very well over the last 20 years (by pretty much any metric) so objectively US executives as a group did significantly better than Japanese executives as a group. In addition you can't talk only CEO salaries without mentioning that salaries in US are overall much higher than in Japan. 13M salary for somebody managing 305k employees sounds very reasonable when senior manager/director (manages 50 people) at tech company makes 1M+.
    - femiagbabiaka 3y ago
      Assigning macroeconomic trends to the actions of CEOs seems off. A really good CEO (if that exists) can not fight decades of terrible macro.
    - bumby 3y ago
      Compare it to the past US CEO pay then. In the heyday of the American economic boom of the 1960s, the CEO-to-worker pay gap was an order of magnitude lower. What's a bit odd to me is how the social norms have shifted regarding this, to the point where average Americans defend it as just.
      - Shaanie 3y ago
        Did you adjust for company size? I bet the average s&p 500 company is much larger than they were in the 60s. Doesn't seem strange or unjust to me that a ceo of a $1 trillion market cap company can demand higher pay than one for a $1 billion company.
llsf 3y ago
Technicality, but Kaiser Permanente is a not-for-profit health plans. I believe it does have part that are non-profit, but in large it is a non-for-profit organization.
kosherhurricane 3y ago
Kaiser is non profit. They dont have shareholders and no dividends. The 1B net income that year is because some years they run a deficit. If the workers get paid more through this strike, it will translates directly to higher prices. Even after that, Kaiser will stay a low cost provider. Becasue they are non-profit.
- runako 3y ago
  > If the workers get paid more through this strike, it will translates directly to higher prices. Has Kaiser not raised prices for health insurance premiums or other fees since 2020? Because that would be notable and they absolutely should lead with that. My suspicion is they didn't mention that because they have been raising the fees they charge their customers faster than they have been raising wages, like many employers. Either way, it doesn't matter all that much if their wages aren't keeping pace with inflation. That would almost definitionally lead to the kind of labor shortages described in the article.
  - gshubert17 3y ago
    I've had the same Medicare advantage plan with Kaiser in Colorado since 2019: My monthly costs for Kaiser, and then for Medicare part B: 2019: 370.50 135.50 2020: 360.50 144.60 2021: 294.50 148.50 2022: 236.50 170.10 2023: 236.50 164.90 2024: 236.50 ?? Before 2019 I had a different plan. I was retired but not yet eligible for medicare. Prices for such pre-medicare plans have increased significantly over this period. edit fix formatting
- droopyEyelids 3y ago
  The math of health providers is always super sketchy, because they 'donate' their emergency service to the indigent at a non-discounted rate and deduct that from their profits. Aside from the fact that those non-discounted rates are astronomically high in the USA, they also don't have to worry about anyone analyzing the list of services provided, so the medical billing errors in the provider's favor don't have a chance of being questioned. Large medical provider accounting is right next to Hollywood accounting in the staggering games played with profit, expense, and loss.
DanAtC 3y ago
Sounds like the workers are due $925mm
- imnotlost 3y ago
  Or return premiums to the marks, eh, victims, eh, members.
- lucaspm98 3y ago
  Will their wages be garnished if the slim 1.3% margins turn negative?
  - toomuchtodo 3y ago
    No, healthcare costs will increase in order to support robust wages and reasonable practitioner patient ratios. Inelastic demand for services that keep people alive do that. No healthcare CEO or hospital administrator is coming to change your bed pan or put a PICC line in, or stop you from bleeding out in the emergency department or the operating room.
  - undersuit 3y ago
    No, they'll continue to be laid off like in previous years.
riku_iki 3y ago
> revenue; $68 billion. Net income; $925 million sounds like profit margin is very small and they can go underwater any moment.
- angstrom 3y ago
  Now do United Health
  - riku_iki 3y ago
    how its relevant?
    - mvdtnz 3y ago
      You need to downvote and ignore people who respond with things like "now do X", "relevant username", "get out of here with your facts and logic" and similar Redditisms. The best we can hope for is for the Reddit interlopers to quietly go away.
- smileysteve 3y ago
  Seems compatible with the Aca caps. Where 80 of revenues had to be spent on healthcare expenses for insurers. https://www.healthcare.gov/health-care-law-protections/rate-review/#:~:text=The%2080%2F20%20Rule%20generally,Medical%20Loss%20Ratio%2C%20or%20MLR https://www.healthcare.gov/health-care-law-protections/rate-....
- candiddevmike 3y ago
  As a non profit, your goal is to show as little profit as possible. So you play hide the money in board salaries, "outside consultants", executive pay and retirement plans, etc.
  - riku_iki 3y ago
    I think non-profit can be profitable, they just don't distribute profit to shareholders. Distributing profit through pay, plans and bonuses sound like blatant fraud and they likely trying to avoid it.
billy99k 3y ago
Well, they could divide up the CEOs pay and give those 75,000 workers the $175 they deserve.

jeffreyrogers 3y ago

That seems like a reasonable amount for the CEO of a massive health care system. Not an easy business to manage and someone who can manage a business that large could do lots of other things. Kaiser is also pretty efficient as far as health care organizations go.

boeingUH60 3y ago
Sure, I'm not complaining, just trying to provide context..
- PaulHoule 3y ago
  Kaiser is a Colossus, it was more-or-less the first HMO. I've been reading about it in the context of health care economics since the 1980s. I was getting a test at the hospital in my town the other day and got asked by the technician about my job, which involves public opinion data, and that got into "why are people unhappy with the economy today?" which got into strikes, and she volunteered Kaiser as an example so people like her are very away this is going on.
rightbyte 3y ago
I am quite sure someone about as competent would do his job for far less. I got this feeling the higher you go the less skill based recruitment is and the more connections and friends matter.
- boeingUH60 3y ago
  > I got this feeling the higher you go the less skill based recruitment is and the more connections and friends matter. That’s fact not feeling. There are very few positions at the top and an oversupply of skilled people willing to fill them. It becomes a matter of getting favored by the right people…sure executives put in the work but impressing the right people at the right time is how one progresses in the upper echelons.
  - dfadsadsf 3y ago
    There is oversupply of people willing to fill high level positions. Problem is that if you want people who have proven that they are skilled (aka successfully held equivalent or higher position at similar company) the pool is much smaller and competition for them is much higher. In addition executive leaving is very disruptive (takes 6+ months to find new one, etc) so you want to pay above average so he does not leave which leads to arms race in salaries. On what executive mishire can cause just look at recent events at Flexport. It takes 1+ year to understand that executive is failing and course correction is extremely expensive and disruptive.
    - hotnfresh 3y ago
      Promoting up from within, and grooming successors who started low down the ladder in the company, used to be common. Now we hire straight in from B-schools at VP or director level, and one of those ends up CEO eventually (if a CEO's not simply hired from outside, directly). This practice seems to have dramatically increased the cost of executives. I wonder if it's increased quality. [EDIT] OK not straight from b-school, they have to do a stint in management consulting or whatever first. Because having that be something that the totally inexperienced do makes complete sense.
      - bumby 3y ago
        The idea of hiring straight from B-schools, without experience, tells me B-schools schools have decided to sell out to maximize student throughput. It used to be that very few people got accepted to B-schools without at least a decade or so of experience.
derstander 3y ago
> That seems like a reasonable amount for the CEO of a massive health care system. Not an easy business to manage and someone who can manage a business that large could do lots of other things. As far as US CEO salaries go, I agree that it doesn’t sound particularly egregious. Compare that with, say, Nintendo’s President, who makes the equivalent of $2.4 million. https://www.nintendo.co.jp/ir/pdf/2023/annual2303e.pdf https://www.nintendo.co.jp/ir/pdf/2023/annual2303e.pdf Executive pay in the US seems to be high compared to at least Japan. Are US executives really that much better than Japanese executives scored against objective metrics?
- dfadsadsf 3y ago
  Japanese companies did not do very well over the last 20 years (by pretty much any metric) so objectively US executives as a group did significantly better than Japanese executives as a group. In addition you can't talk only CEO salaries without mentioning that salaries in US are overall much higher than in Japan. 13M salary for somebody managing 305k employees sounds very reasonable when senior manager/director (manages 50 people) at tech company makes 1M+.
  - femiagbabiaka 3y ago
    Assigning macroeconomic trends to the actions of CEOs seems off. A really good CEO (if that exists) can not fight decades of terrible macro.
  - bumby 3y ago
    Compare it to the past US CEO pay then. In the heyday of the American economic boom of the 1960s, the CEO-to-worker pay gap was an order of magnitude lower. What's a bit odd to me is how the social norms have shifted regarding this, to the point where average Americans defend it as just.
    - Shaanie 3y ago
      Did you adjust for company size? I bet the average s&p 500 company is much larger than they were in the 60s. Doesn't seem strange or unjust to me that a ceo of a $1 trillion market cap company can demand higher pay than one for a $1 billion company.

llsf 3y ago

Technicality, but Kaiser Permanente is a not-for-profit health plans. I believe it does have part that are non-profit, but in large it is a non-for-profit organization.

kosherhurricane 3y ago

Kaiser is non profit. They dont have shareholders and no dividends. The 1B net income that year is because some years they run a deficit. If the workers get paid more through this strike, it will translates directly to higher prices. Even after that, Kaiser will stay a low cost provider. Becasue they are non-profit.

runako 3y ago
> If the workers get paid more through this strike, it will translates directly to higher prices. Has Kaiser not raised prices for health insurance premiums or other fees since 2020? Because that would be notable and they absolutely should lead with that. My suspicion is they didn't mention that because they have been raising the fees they charge their customers faster than they have been raising wages, like many employers. Either way, it doesn't matter all that much if their wages aren't keeping pace with inflation. That would almost definitionally lead to the kind of labor shortages described in the article.
- gshubert17 3y ago
  I've had the same Medicare advantage plan with Kaiser in Colorado since 2019: My monthly costs for Kaiser, and then for Medicare part B: 2019: 370.50 135.50 2020: 360.50 144.60 2021: 294.50 148.50 2022: 236.50 170.10 2023: 236.50 164.90 2024: 236.50 ?? Before 2019 I had a different plan. I was retired but not yet eligible for medicare. Prices for such pre-medicare plans have increased significantly over this period. edit fix formatting
droopyEyelids 3y ago
The math of health providers is always super sketchy, because they 'donate' their emergency service to the indigent at a non-discounted rate and deduct that from their profits. Aside from the fact that those non-discounted rates are astronomically high in the USA, they also don't have to worry about anyone analyzing the list of services provided, so the medical billing errors in the provider's favor don't have a chance of being questioned. Large medical provider accounting is right next to Hollywood accounting in the staggering games played with profit, expense, and loss.

DanAtC 3y ago

Sounds like the workers are due $925mm

imnotlost 3y ago
Or return premiums to the marks, eh, victims, eh, members.
lucaspm98 3y ago
Will their wages be garnished if the slim 1.3% margins turn negative?
- toomuchtodo 3y ago
  No, healthcare costs will increase in order to support robust wages and reasonable practitioner patient ratios. Inelastic demand for services that keep people alive do that. No healthcare CEO or hospital administrator is coming to change your bed pan or put a PICC line in, or stop you from bleeding out in the emergency department or the operating room.
- undersuit 3y ago
  No, they'll continue to be laid off like in previous years.

riku_iki 3y ago

> revenue; $68 billion. Net income; $925 million sounds like profit margin is very small and they can go underwater any moment.

angstrom 3y ago
Now do United Health
- riku_iki 3y ago
  how its relevant?
  - mvdtnz 3y ago
    You need to downvote and ignore people who respond with things like "now do X", "relevant username", "get out of here with your facts and logic" and similar Redditisms. The best we can hope for is for the Reddit interlopers to quietly go away.
smileysteve 3y ago
Seems compatible with the Aca caps. Where 80 of revenues had to be spent on healthcare expenses for insurers. https://www.healthcare.gov/health-care-law-protections/rate-review/#:~:text=The%2080%2F20%20Rule%20generally,Medical%20Loss%20Ratio%2C%20or%20MLR https://www.healthcare.gov/health-care-law-protections/rate-....
candiddevmike 3y ago
As a non profit, your goal is to show as little profit as possible. So you play hide the money in board salaries, "outside consultants", executive pay and retirement plans, etc.
- riku_iki 3y ago
  I think non-profit can be profitable, they just don't distribute profit to shareholders. Distributing profit through pay, plans and bonuses sound like blatant fraud and they likely trying to avoid it.

billy99k 3y ago

Well, they could divide up the CEOs pay and give those 75,000 workers the $175 they deserve.