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Kaiser has tough quarter


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POSTED: Saturday, May 16, 2009

Kaiser Foundation Health Plan Inc. swung to a $300,000 loss in the first quarter after a year-earlier profit of $3 million as the state's rising unemployment rate cut into membership.

               

     

 

Money talks

       

        First-quarter loss

        $300,000
       

Year-earlier net
        $3 million

       

The state's largest health maintenance organization said its membership fell by roughly 1,000, to 222,000 members, from the previous quarter and that anticipated revenue didn't materialize due to the Hawaii jobless rate rising in March to a 31-year high of 7.1 percent.

The health provider's investment income also dropped nearly in half during the quarter, to $1.3 million from $2.4 million a year ago.

Kaiser President Janet Liang said she was cautious about the rest of the year.

“;To ensure stability for our customers, Kaiser Permanente is responding to national and local economic issues by pursuing minor operational adjustments,”; she said.

Bill Corba, vice president and chief marketing officer, said that lower membership and an unanticipated revenue decline in the tourism-related and construction industries hurt financial results.

“;We are focusing on keeping rates affordable and providing coverage options for members who are losing their benefits due to a change in their employment status,”; he said.

Revenue from membership dues rose 3.5 percent, to $233.6 million from $225.5 million.

The health provider had an operating loss of $1.6 million compared with operating income of $600,000 a year ago. Operating expenses increased 4.6 percent, to $235.2 million from $224.9 million.