POSTED: 01:30 a.m. HST, Nov 16, 2010
Kaiser Foundation Health Plan Inc. recorded a $3 million profit in the third quarter as a result of increased membership and cost-controlling efforts.
The state's largest health maintenance organization's quarterly gain compares to net income of $100,000 in the year-earlier period.
The company, which is seeking to raise rates 12.6 percent on Jan. 1, said it continues to "leverage new technologies" to improve clinical outcomes and patient safety and reduce costs.
Kaiser posted $242.6 million in operating revenue and $241.1 million in expenses, resulting in operating income of $1.5 million in the quarter ended Sept. 30.
By comparison, the HMO reported $239.1 million in operating revenue and $240.1 million in operating expenses in the 2009 quarter, when its operating loss totaled $1 million.
Meanwhile, net investment income was up to $1.5 million from $1.1 million in the year-earlier quarter.
Kaiser attributed part of its $3 million profit to rising membership, which was up by more than 3,800, to 227,275 at the end of the third quarter.
"Hawaii is experiencing modest job growth and we're welcoming new members as a result," said Thomas Risse, Kaiser's chief financial officer.
Nonetheless, the HMO earlier said rising health care costs have affected the business.
If approved by the state Insurance Division, Kaiser's 12.6 percent rate increase will be the largest in seven years, affecting about 6,800 employers and 164,000 members.
The company also is seeking an average 8.6 percent rate increase for about 14,000 individuals.
State Insurance Commissioner Gordon Ito said he is hoping that the financial picture will improve for both HMSA and Kaiser, so that no further rate increases will be necessary and that rate reductions might even be possible.