Kaiser Foundation Health Plan Hawaii sustained a $7 million loss in the fourth quarter amid declining revenue as more members lost their jobs and enrolled in the state's Quest program for low-income individuals.

The loss followed its only profitable quarter ($100,000) of the year and left the state's largest health maintenance organization with an $8.7 million loss in 2009.

A year ago Kaiser had a fourth-quarter profit of $3.1 million and net income of $7.3 million for all of 2008.

“;We experienced reduced revenues as more of our members lost employer-sponsored coverage and enrolled in Quest,”; Kaiser Chief Financial Officer Thomas Risse said. “;Quest reimburses at a lower rate than the care provided, which required us to absorb these unpaid costs. We feel positive about our ability to manage resources efficiently, despite higher-than-expected care needs.”;

Kaiser's operating revenue fell 13.5 percent in the fourth quarter to $194.8 million from $225.1 million in the year-ago period, but for the year actually rose 0.2 percent to $902.4 million from $900.3 million. To help combat rising health care costs, Kaiser boosted its group insurance rates by an average of 10.7 percent at the start of 2010.

Despite the loss in fourth-quarter revenue, Kaiser's membership continued to grow and ended 2009 with 224,000 members, up 1,400 from 222,600 at the end of 2008. The membership year to date is now at 227,400.

Kaiser spokeswoman Lynn Kenton said membership has grown become of its “;increasing products for the changing population.”;

“;We also continue to offer very competitive rates for very high-quality health care, and 2009 saw many national awards for Kaiser Permanente Hawaii recognizing our quality and service,”; she said.

Kaiser lost $800,000 from its investment income last quarter compared with a profit of $3.1 million in the fourth quarter of 2008.

For the year, Kaiser had an investment loss of $8.7 million versus an investment profit of $7.3 million in 2008.