HMSA and Kaiser post losses


POSTED: Tuesday, August 18, 2009

Both the Hawaii Medical Service Association and Kaiser Foundation Health Plan posted losses for the second quarter of this year.

HMSA suffered a loss of $16.79 million, nearly identical to its second-quarter loss of $16.69 million in 2008. The state's largest health care provider, with 700,556 members, cited rising costs as a contributing factor.

HMSA paid an average of $129.38 million a month to physicians, hospitals and pharmacies in the most recent quarter—higher than many other recent quarters, officials said.

“;For every dollar we receive in dues, we are paying out 95 cents for health care benefits,”; said HMSA chief financial officer Steve Van Ribbink. “;While this provides unprecedented value for our members and providers, it does not leave enough for operating costs and is simply not sustainable over time.”;

Second-quarter revenue from member dues was $408.30 million, up 9.2 percent from $373.76 million the same time last year.

Benefit expenses paid to health care providers was $388.15 million, up 6.4 percent from $364.94 million the same period last year.

On July 1, HMSA raised premiums an average of 12.1 percent for small businesses on its Preferred Provider Plan.

Kaiser, the state's largest health maintenance organization, reported a $1.6 million net income loss in the second quarter of this year compared with a $1.5 million gain the same quarter last year. Operating revenue for the latest quarter was $234.9 million, but operating expenses were $237.8 million, company officials said yesterday. The health provider's second-quarter investment income equaled $1.3 million in the most recent period, down from $2.1 million a year ago.

For the first six months of the year, Kaiser reported a $1.9 million loss, representing a negative 0.4 percent return on revenue. In the same period last year, Kaiser reported a net gain of $4.5 million, a 1 percent return on revenue.

Thomas Risse, Kaiser's chief financial officer, said the revenue shortfall was a result of the loss in members who became unemployed and lost employer-provided insurance.

Kaiser's membership fell by 90 from the previous quarter to 221,780 members in June.

Kaiser said its more affordable individual and family plans, however, are allowing many members who have lost employer-covered benefits to remain with the health care provider.



Second-quarter loss: $16.79 million

Year-earlier loss: $16.69 million


Second-quarter loss: $1.6 million

Year-earlier net income: $1.5 million