Kaiser Permanente Hawaii, juggling a massive facilities upgrade with layoffs and other cutbacks, posted a slightly wider loss of $600,000 in the fourth quarter than the year-earlier period but still ended 2012 with a profit of $1.7 million.
The state’s largest health maintenance organization, which serves nearly 226,000 members at the Moanalua Medical Center and Clinic and 18 clinics statewide, is investing $320 million over five years to expand facilities statewide. The HMO is opening a 40,000-square-foot clinic in North Kona in the summer of 2014, expanding the Koolau Clinic in Kaneohe with completion expected near the end of this year, and constructing a 12,000-square-foot Pearlridge Clinic that is expected to open this fall.
It also is building a physical and occupational therapy center in Wailuku due to open in October, and renovating and expanding the Mauka Tower at Moanalua Medical Center, which will be complete this month.
"We made significant investments in our facilities and technology in 2012 and plan on continuing this work to position ourselves well to welcome new members in the future," Kaiser spokeswoman Laura Lott said in an email Friday. "As a health care provider, we need to reinvest on our infrastructure to continue to deliver quality care."
Kaiser Chief Financial Officer Thomas Risse said he was excited about the new services that will be provided by the Mauka Tower expansion.
"(It will have) the state’s first room-service program where patients order the meals they want, a state-of-the-art neonatal intensive care unit, superior diagnostic imaging services and new private patient rooms," Risse said in a news release.
But the $320 million expansion is coming at a time when the health care provider is trimming its workforce. Kaiser plans to eliminate 46 registered nurse positions at some primary care clinics over the next few months and will replace them with licensed practical nurses and medical assistants who it says are more appropriately suited for clinic duties. Late last year Kaiser offered contract buyouts to 280 nurses, and about 25 accepted. In October the company cut 35 union and management positions in an effort to streamline operations.
Kaiser also said it will close the Urgent Care Center at the Honolulu Clinic on March 16 and cut operating hours at the Moanalua Ambulatory Treatment Center to 10 hours, six days a week, from 12 hours, seven days a week.
In January, Kaiser received approval from the state Insurance Division to increase its premiums 5.3 percent this year for 155,000 members at 5,200 companies, the bulk of Kaiser’s business.
The company said its fourth-quarter loss was slightly wider than a $500,000 loss in the year-earlier quarter even though revenue rose 4.8 percent to $281.6 million from $268.8 million. Kaiser had a $300,000 operating loss in the fourth quarter because expenses rose 4.2 percent to $281.9 million from $270.5 million in the same quarter of 2011. Kaiser’s investments lost $300,000 in the quarter compared with a gain of $1.2 million a year ago.
For the year, Kaiser’s earnings plunged 60.5 percent from $4.3 million as expenses outpaced revenue and investment income decreased. Full-year revenue rose 5.8 percent to $1.13 billion from $1.06 billion as expenses grew 5.9 percent to $1.13 billion from $1.06 billion.
Investment income fell 32.7 percent to $3.3 million from $4.9 million. Still, the investment return was nearly double the $1.7 million profit for the year.
