Kaiser cites cutting costs in posting $3M in gains
After two years of cost-cutting efforts, the Hawaii region of Kaiser Foundation Health Plan Inc. said it has emerged a stronger player in the health-plan market, recording $3 million in net gains in the first quarter.
The state's largest health maintenance organization had net income of $3.4 million in the same quarter last year.
"We are pleased with our financial performance because it allows us to continue investing in new technology and facilities," said Janet Liang, president of the Hawaii region.
Kaiser unveiled last month the first phase of a $168.8 million expansion project at the Moanalua Medical Center for its 222,000 members statewide.
The health plan has had two consecutive profitable quarters, which the company attributes to continual efforts in controlling costs in the volatile health care market.
"They appear to be in good shape, and given the challenges in the health care industry, it does seem to be necessary for companies to look at reorganizing or reconsidering their structure to better deal with the various issues in health care today," said J.P. Schmidt, state insurance commissioner.
Jan Kagehiro, Kaiser's spokeswoman, said it is too early to tell whether the health plan will need to raise premium rates on Jan. 1. The HMO implemented rate hikes for businesses and government employers by an average of 2 percent in the beginning of this year.
"The rising cost of medical care continues to challenge all of us in the industry," said David Delaney, the region's chief financial officer.
The company's first-quarter operating revenue was $225.5 million, up from $217.8 million in the year-earlier quarter, while operating expenses totaled $224.9 million compared with $217.3 million last year.
Kaiser reported operating income of $600,000 in the quarter, compared with $500,000 in the year-ago period. Net investment income totaled $2.4 million, down from $2.9 million last year.
The HMO has 4,400 employees at its Moanalua facility and 17 clinics on Oahu, Maui and the Big Island.