Amid a company reorganization and cutting costs, Kaiser Permanente Hawaii said Thursday it earned $800,000 in the third quarter, reversing an $800,000 loss in the same quarter a year ago.
Operating revenue at the state’s largest health maintenance organization grew to $280.5 million in the quarter that ended Sept. 30, up from $267.7 million, while expenses rose to $281.2 million from $269.6 million. That resulted in a $700,000 operating loss, down from an operating loss of $1.9 million in the year-earlier period.
But investment gains of $1.5 million — up from $1.1 million in the 2011 quarter — offset the loss, resulting in a profit of $800,000, or 0.3 percent of revenue. The HMO’s reserves stood at $121 million, down from $137 million.
"We’re encouraged to see an improvement over the second quarter," Thomas Risse, vice president and chief financial officer, said in a statement. "Improving our financial performance allows us to support ongoing, needed investments in facilities and technology, which contribute to long-term quality, affordability and growth."
Kaiser broke ground last week on a $15 million expansion of its Koolau clinic in Kaneohe and is also investing $50 million to build a 40,000-square-foot medical office building in North Kona.
Kaiser said it has made strategic investments to improve its integrated care model, which positions it well for new mandates under the federal Affordable Care Act.
The company, which serves more than 225,000 members at the Moanalua Medical Center and Clinic and 18 clinics statewide, is making adjustments to its staffing, including offering buyouts to an undisclosed number of its 850-member nursing workforce and eliminating 35 union and management positions last month.
"What they’re trying to do is they’re restructuring their internal operations to get their costs under control," said Paul Tom, president of Benefit Plan Solutions Inc., a health care consulting firm.
Kaiser is proposing a 5.3 percent rate hike on Jan. 1 for more than 150,000 members covered by employer-sponsored health plans and is seeking to raise premiums 9.1 percent for more than 14,000 individuals on the same day, according to the state Insurance Division, which regulates health plan rates. Kaiser recently announced that it will boost premiums next year for supplemental Medicare coverage as well.
