# The $116 Billion Nonprofit Whose Bottom Line Rides on the Market: Inside Kaiser Permanente Kaiser is the largest nonprofit health system in the country, its operating margin is near zero, and its profit or loss is decided by a $54 billion investment portfolio. Its own CFO says it relies on returns to bridge the gap. Author: J.A. Watte Published: July 4, 2026 Source: https://jwatte.com/blog/kaiser-permanente-ledger/ --- Kaiser Permanente is the largest nonprofit health system in the United States, and the most important number about it is not on any of its tax returns. Its operating margin, the money it makes actually delivering health care, hovers near zero and has gone negative. What decides whether Kaiser posts a profit or a loss in a given year is its investment portfolio, a reserve of more than $54 billion invested in the same markets a pension fund and a retiree use. In 2022, when the markets fell, the largest nonprofit health system in America lost $4.47 billion. This is the [thesis of this entire series](/blog/the-working-ledgers/) in its purest and largest form: an institution whose mission is health care, whose financial fate is set in the stock market. And Kaiser's own chief financial officer says so out loud. Everything below is from the filings, Kaiser's audited statements, and its own releases. ## A shipyard idea, built into a giant Kaiser Permanente was founded in 1945 by the industrialist Henry J. Kaiser and the surgeon Dr. Sidney Garfield, out of the prepaid medical programs Garfield had run for workers building the Colorado River Aqueduct, the Grand Coulee Dam, and Kaiser's World War II shipyards in Richmond, California; the plan opened to the public on July 21, 1945 and took the Kaiser Permanente name in 1953 ([Kaiser Permanente history](https://about.kaiserpermanente.org/who-we-are/our-history/how-it-all-started)). It is built as three interlocking entities, and understanding them is the key to the numbers: the nonprofit Kaiser Foundation Health Plan, which collects the premiums; the nonprofit Kaiser Foundation Hospitals, which runs the hospitals; and the for-profit, physician-owned Permanente Medical Groups, which employ the doctors and contract exclusively with the health plan ([Wikipedia, "Kaiser Permanente"](https://en.wikipedia.org/wiki/Kaiser_Permanente)). It is an integrated payer-provider, insurer and hospital combined, headquartered in Oakland, and by early 2026 it covered 12.9 million members with 40 hospitals and more than 243,000 employees ([Kaiser fast facts](https://about.kaiserpermanente.org/who-we-are/fast-facts)). Because Kaiser files a separate tax return for each legal entity, its scale is easy to misread. Kaiser Foundation Health Plan reported $82.49 billion in revenue and Kaiser Foundation Hospitals another $38.20 billion, but you cannot add those together, because the health plan's premiums and the hospitals' payments are the same dollars counted twice as they move between the entities ([ProPublica, Health Plan](https://projects.propublica.org/nonprofits/organizations/941340523); [ProPublica, Hospitals](https://projects.propublica.org/nonprofits/organizations/941105628)). Kaiser's actual consolidated operating revenue was $115.8 billion in 2024 and $127.7 billion in 2025 ([Kaiser 2025 financial results](https://about.kaiserpermanente.org/news/press-release-archive/kaiser-permanente-risant-health-report-2025-financial-results)). The hospital entity alone holds $52.13 billion in net assets, larger than [most university endowments in this series](/blog/university-endowments-ledger/). ## The margin is a rounding error; the portfolio is the story Here is the fact that reframes everything. On $115.8 billion of operating revenue in 2024, Kaiser's operating income was $569 million, a margin of one half of one percent. In 2023 it was 0.3 percent. In 2022 it was negative, an operating loss of $1.27 billion ([Kaiser 2023 financial results](https://about.kaiserpermanente.org/news/press-release-archive/kaiser-foundation-health-plan-and-hospitals-report-2023-financial-results)). Delivering health care, for the largest nonprofit health system in the country, is close to a break-even proposition, and in a bad year it loses money. What turns that razor-thin operating result into a profit or a loss is the investment portfolio. Kaiser holds roughly $54 billion in cash and investments, and unlike a conservative operating account, much of it is in alternatives: at the end of 2023 its noncurrent investments included $28.2 billion of alternatives, of which private equity alone was $20.6 billion ([Kaiser 2023 audited combined statements](https://medquest.hawaii.gov/content/dam/formsanddocuments/reports/managed-care---audited-financial-reports/Kaiser%20CY%202023.pdf)). Add the defined-benefit pension, overfunded at $32.9 billion and about 61 percent in alternatives with another $29 billion of private equity, and Kaiser is running on the order of $50 billion of private equity across its pools, managed by an in-house office branded Treasury, Pensions and Investments that reportedly oversees around $163 billion, one of the largest healthcare investment offices in the country ([AlternativesWatch](https://www.alternativeswatch.com/2023/07/07/kaiser-permanente-hires-steve-algert-executive-director-pensions-and-investments/)). That portfolio is why Kaiser's bottom line swings. Its nonoperating investment income was positive $7.5 billion in 2021, negative $3.2 billion in 2022, positive $3.8 billion in 2023, and positive $7.9 billion in 2025 ([Kaiser 2025 financial results](https://about.kaiserpermanente.org/news/press-release-archive/kaiser-permanente-risant-health-report-2025-financial-results)). The $3.2 billion investment loss in 2022 is precisely why a health system with a near-break-even operating result posted a $4.47 billion net loss that year. When the markets fell, the largest nonprofit health system in America went into the red, not because it delivered worse care, but because its portfolio dropped. And Kaiser's chief financial officer, Kathy Lancaster, put the dynamic on the record in the 2025 release: the system, she said, has "relied on our investment returns and the balance sheet to bridge the gap in our operating performance." The portfolio is not a cushion beside the mission. The portfolio is what keeps the mission in the black. One honest caveat, because this series flags its own: Kaiser's enormous $12.9 billion net income in 2024 was not mostly investment income. It included a one-time, non-cash $6.8 billion accounting gain from booking the Geisinger and Cone Health acquisitions ([Becker's](https://www.beckershospitalreview.com/finance/kaiser-permanente-reports-569m-operating-income-in-2024/)). The investment-swing story is clearest in 2021 through 2023, and in the 2022 loss. For all its scale, Kaiser does report enormous community benefit on the hospital schedule of its return, and it is worth putting beside the portfolio. Its hospital arm alone reported $835.5 million in charity care and $2.06 billion in total community benefit for the year, the largest such sums of any system in [this series](/blog/nonprofit-hospitals-ledger/). Yet measured against its expenses, even those figures are 2.47 and 6.09 percent, a reminder that at Kaiser's scale a two-billion-dollar act of charity is a rounding line next to a fifty-billion-dollar portfolio. ## For how long, and what it means Kaiser will endure; 12.9 million members and $63 billion of reserves do not evaporate. But its financial model is a genuinely striking thing to see laid bare. The largest nonprofit health system in the country runs its actual health-care operations at close to break-even, keeps a war chest of more than $50 billion, invests that war chest heavily in private equity and other alternatives, and lets the returns on it determine whether the year ends in profit or loss. It is expanding that model, having created a nonprofit called Risant Health with about $5 billion committed to acquire community health systems, closing Geisinger in March 2024 and Cone Health that December ([Kaiser and Geisinger](https://about.kaiserpermanente.org/news/press-release-archive/kaiser-permanente-and-geisinger-come-together-to-launch-risant-health--and-expand-access-to-valuebased-care)). It is doing all of this while absorbing wave after wave of labor strikes, including a four-week walkout by roughly 31,000 nurses and professionals in early 2026 that ended with a 21.5 percent raise ([UNAC/UHCP](https://unacuhcp.org/news/largest-open-ended-health-care-strike-in-u-s-history-ends-at-kaiser-permanente-as-negotiations-close-resolution/)). Its chair and chief executive, Greg Adams, who stepped up the day his predecessor Bernard Tyson died in 2019, was paid about $12.98 million in 2024, and the Schedule J breakdown is itself a tell: roughly $2.2 million was base salary and $9.35 million was bonus, the pay structure of a corporate chief executive at a nonprofit whose bottom line is set in the markets ([ProPublica](https://projects.propublica.org/nonprofits/organizations/941340523)). Strip it all down and Kaiser is the largest and clearest instance of the finding under every post in this series. The mission is health care. The solvency is the market. When you go to a Kaiser hospital, the institution treating you is running its care at a fraction of a percent of margin and making its money, in the years it makes money, in the same public and private markets that hold your retirement account. In a good market year, the returns fund the care. In 2022, the market fell, and the health system lost four and a half billion dollars. There is one well, and Kaiser arrives at it with the biggest bucket in American health care. ## Related reading - [The Margin Is Thin, the Portfolio Is Not](/blog/nonprofit-hospitals-ledger/): the smaller nonprofit hospitals that run the same way at smaller scale. - [The $10 Billion Endowment That Gives Away Medicine](/blog/shriners-childrens-ledger/): Shriners Children's, the inverse, funding care from the endowment and giving it away. - [The Endowment That Employs Its Scientists](/blog/howard-hughes-medical-institute-ledger/): HHMI, another institution whose income is almost entirely investment returns. - [The Working Ledgers](/blog/the-working-ledgers/): the market underneath every institution that holds money. ## Fact-check notes and sources - **The entity figures** (Kaiser Foundation Health Plan revenue $82.49 billion; Kaiser Foundation Hospitals revenue $38.20 billion and net assets $52.13 billion): from the respective IRS Form 990s for 2024 via ProPublica, [Health Plan (EIN 94-1340523)](https://projects.propublica.org/nonprofits/organizations/941340523) and [Hospitals (EIN 94-1105628)](https://projects.propublica.org/nonprofits/organizations/941105628). These entity revenues must not be summed, because they double-count intercompany flows. - **The consolidated operating revenue of $115.8 billion (2024) and $127.7 billion (2025), the near-zero operating margins, the 2022 operating loss of $1.27 billion and net loss of $4.47 billion, and the nonoperating investment income swings (positive $7.5 billion in 2021, negative $3.2 billion in 2022, positive $3.8 billion in 2023, positive $7.9 billion in 2025), plus the chief financial officer's quote**: Kaiser's own year-end financial releases, [2025](https://about.kaiserpermanente.org/news/press-release-archive/kaiser-permanente-risant-health-report-2025-financial-results) and [2023](https://about.kaiserpermanente.org/news/press-release-archive/kaiser-foundation-health-plan-and-hospitals-report-2023-financial-results). - **The 1945 founding by Henry J. Kaiser and Dr. Sidney Garfield, the shipyard and dam origins, and the three-part integrated structure**: [Kaiser Permanente's history pages](https://about.kaiserpermanente.org/who-we-are/our-history/how-it-all-started) and [Wikipedia, "Kaiser Permanente"](https://en.wikipedia.org/wiki/Kaiser_Permanente). The 12.9 million members, 40 hospitals, and 243,000 employees are from [Kaiser's fast facts](https://about.kaiserpermanente.org/who-we-are/fast-facts). - **The roughly $54 billion investment portfolio, the $28.2 billion in alternatives including $20.6 billion of private equity, and the overfunded $32.9 billion pension about 61 percent in alternatives**: [Kaiser's 2023 audited combined financial statements](https://medquest.hawaii.gov/content/dam/formsanddocuments/reports/managed-care---audited-financial-reports/Kaiser%20CY%202023.pdf). The Treasury, Pensions and Investments office and its reported scale: [AlternativesWatch](https://www.alternativeswatch.com/2023/07/07/kaiser-permanente-hires-steve-algert-executive-director-pensions-and-investments/). - **The 2024 net income of $12.9 billion including a one-time $6.8 billion acquisition accounting gain**: [Becker's Hospital Review](https://www.beckershospitalreview.com/finance/kaiser-permanente-reports-569m-operating-income-in-2024/). - **Risant Health and the Geisinger and Cone Health acquisitions**: [Kaiser and Geisinger launch Risant](https://about.kaiserpermanente.org/news/press-release-archive/kaiser-permanente-and-geisinger-come-together-to-launch-risant-health--and-expand-access-to-valuebased-care). **The early-2026 nurses' strike**: [UNAC/UHCP](https://unacuhcp.org/news/largest-open-ended-health-care-strike-in-u-s-history-ends-at-kaiser-permanente-as-negotiations-close-resolution/). **Greg Adams as chair and CEO and his 2024 compensation of about $12.98 million, of which roughly $2.2 million was base salary and $9.35 million bonus**: [Kaiser leadership](https://about.kaiserpermanente.org/who-we-are/leadership-team/greg-a-adams) and the Kaiser Foundation Health Plan Form 990 Schedule J and Part VII via [ProPublica](https://projects.propublica.org/nonprofits/organizations/941340523). - **Kaiser's community benefit** ($835.5 million in charity care, 2.47 percent of expenses, and $2.06 billion in total community benefit, 6.09 percent): from Kaiser Foundation Hospitals' Form 990, Schedule H, Part I, lines 7a and 7k, via [ProPublica](https://projects.propublica.org/nonprofits/organizations/941105628). *This post is informational, not financial or medical advice. All figures are reproduced from public filings, Kaiser's audited statements, and its own releases. The organization and individuals are discussed from the public record as nominative fair use, with no affiliation implied and nothing endorsed by Kaiser Permanente.* --- Canonical HTML: https://jwatte.com/blog/kaiser-permanente-ledger/ RSS: https://jwatte.com/feed.xml JSON Feed: https://jwatte.com/feed.json Hero image: https://jwatte.com/images/kaiser-permanente-ledger.webp