Kaiser net drops 83% on restructuring costs
Kaiser Permanente Hawaii said yesterday its net income fell 82.5 percent in the first quarter as it transitioned to a new leadership team and continued restructuring efforts to rein in expenses.
The state's largest health-maintenance organization began a cost-cutting program -- which included 54 layoffs -- more than a year ago and is still looking closely at its operations.
"We will continue our efforts to realign expenses to meet the challenges faced across the health-care industry," said new Chief Financial Officer Dave Delaney, who assumed his position on April 2. Delaney form- erly held that role and other positions at Regional Medical Center of San Jose
Kaiser said its restructuring efforts include property consolidation, reviewing all contractual agreements and analyzing all positions.
Net income shrunk last quarter to $700,000 from $4 million in the year-ago period as revenue slipped 1.1 percent to $217.8 million from $220.3 million.
The HMO absorbed an operating loss of $2.3 million after posting an operating gain of $1.6 million a year ago.
Expenses rose 0.6 percent to $220.1 million from 218.7 million. Kaiser's net return on revenue was 0.7 percent compared with 4 percent a year earlier. However, investment income jumped 25 percent to $3 million from $2.4 million.
Janet Liang, who took over as president of Kaiser Hawaii on March 5, said the new leadership team is confident in its plan "to position Kaiser Permanente in meeting the health-care needs for Hawaii."
Liang replaced acting president Susan Murray, who step-ped in temporarily after Jan Head stepped down for family reasons in January. Liang was the former executive vice president of the Columbia Region at Seattle-based Group Health Cooperative.
As part of Kaiser's repositioning, it is building a $150 million addition to its Moanalua Medical Center that is scheduled to open next year. The center will offer members a larger, more personalized mother-baby unit, and increased access with 106 new beds and additional medically advanced operating suites.
Kaiser previously upgraded its record-keeping with KP HealthConnect, an electronic medical records system that facilitates access to patient information.