Kaiser Permanente is one of the largest integrated health care systems in the United States, serving more than 12.5 million members and generating over $88 billion in annual revenue. The organization consists of Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and their subsidiaries, as well as the Permanente Medical Groups. As a nonprofit entity, Kaiser Permanente invests its surplus funds to support its mission of providing high-quality, affordable health care services and improving the health of its members and communities.
The Role of the Chief Investment Officer
The chief investment officer (CIO) is a senior executive who oversees the investment activities of Kaiser Permanente. The CIO is responsible for developing and implementing the investment strategy, asset allocation, portfolio management, risk management, and performance measurement of the organization’s funds. The CIO also leads a team of investment professionals who manage various asset classes, such as public equities, fixed income, private equity, real estate, hedge funds, and natural resources.
The CIO reports to the executive vice president and chief financial officer (CFO) of Kaiser Permanente, who is currently Kathy Lancaster. The CFO has accountability for corporate finance, treasury, financial planning, capital planning, data analytics, and actuarial services. The CFO also provides financial leadership for all of Kaiser Permanente’s markets and national business units.
The Current Chief Investment Officer
The current CIO of Kaiser Permanente is Dean Duchak, who joined the organization in 2018. Duchak is co-CIO with Eleanor Hsu, who joined in 2019. Together, they lead the investment activities made on behalf of Kaiser Permanente.
Duchak has more than 25 years of experience in the investment industry. Prior to joining Kaiser Permanente, he was a managing director at BlackRock, where he led the global client solutions team for institutional investors in North America. He also held senior roles at Barclays Global Investors and Goldman Sachs Asset Management. He holds a bachelor’s degree in economics from Harvard University and an MBA from Stanford University.
Hsu has over 20 years of experience in the investment industry. Prior to joining Kaiser Permanente, she was a managing director at Cambridge Associates, where she advised institutional investors on asset allocation, portfolio construction, manager selection, and risk management. She also held roles at Morgan Stanley Investment Management and J.P. Morgan Asset Management. She holds a bachelor’s degree in economics from Yale University and an MBA from Harvard University.
The Investment Performance of Kaiser Permanente
According to its 2020 annual report, Kaiser Permanente had $96.4 billion in total assets as of December 31, 2020. Of this amount, $48.9 billion were invested assets, which generated $4.8 billion in net investment income for the year. This represented a return of 10.6%, which exceeded the benchmark return of 9.6%. The invested assets consisted of 47% public equities, 29% fixed income, 15% alternative investments, 7% cash and equivalents, and 2% other assets.
The investment performance of Kaiser Permanente reflects its long-term orientation and diversified portfolio approach. The organization aims to achieve consistent returns that support its mission and financial stability while managing risk and volatility. The organization also considers environmental, social, and governance (ESG) factors in its investment decisions and engages with its external managers on ESG issues.
The chief investment officer of Kaiser Permanente is a key leader who oversees the investment activities of one of the largest integrated health care systems in the United States. The current CIO is Dean Duchak, who shares the role with Eleanor Hsu. Together, they lead a team of investment professionals who manage a diversified portfolio of assets that generated a strong return in 2020. The CIO reports to the CFO of Kaiser Permanente, who is Kathy Lancaster. The CIO and the CFO work together to provide financial leadership for the organization and its markets and business units.