After sustaining big losses last year, Kaiser Permanente swung back into the black in the first quarter with an added boost from financial markets.

Oakland, California-based Kaiser on Friday reported net income of $1.21 billion in the first quarter, compared with a net loss of $961 million in the year-ago period. Revenue grew 4.2% to $25.22 billion. Expenses, including elevated labor costs and higher prices for goods and services, rose 3% overall to $24.99 billion.

Non-operating income came to $975 million, largely driven by investment gains, compared with an $889 million loss in the first quarter of 2022.

Operating income totaled $233 million, up from a year-ago loss of $72 million.

To limit expenses, Kaiser cut some discretionary spending, such as executive and employee travel, and will continue to scrutinize headcount, particularly administrative roles, said Tom Meier, corporate treasurer, in an interview.

“We’re all being told to hold our budgets and to even look to see if there are opportunities to reduce our costs as we get into the rest of this year, so that we have a good run rate as we enter 2024,” he said.

Kaiser, which operates 39 hospitals and more than 700 medical offices, said in a news release that it increased clinical hiring in the first quarter by 15% compared to the year-ago period, as the system continues to reduce its reliance on contract labor. Meier said wage rates are mostly locked in until September, when nearly 88,000 worker contracts come up for renewal. Labor unions represent about three-quarters of Kaiser’s workforce.

Kaiser’s latest financial results come about a week after the system announced plans with Danville, Pennsylvania-based Geisinger Health to create a nonprofit entity that would buy up health systems to build a national care network. Kaiser pledged to invest up to $5 billion in the nonprofit, called Risant Health, over the next five years. Kaiser CEO Greg Adams said last week he wants Risant to grow into a $30 billion to $35 billion organization during that time frame.