Kaiser Permanente Hawaii’s earnings narrowed in the third quarter as rising medical expenses offset higher revenue and a slightly lower return on investments from the year-earlier period.
The state’s largest health maintenance organization and second-largest insurer said Friday that net income slipped to $200,000 from $800,000 in the third quarter of 2012.
Kaiser, which serves about 225,000 members at the Moanalua Medical Center and 20 clinics statewide, is in the midst of an expansion in which it is investing roughly $320 million over a five-year period to expand its facilities across the islands.
"We continue to build new facilities to support growing communities, including a new Pearlridge Clinic, a new Koolau Medical Office in Kaneohe and a new specialty rehabilitation center on Maui, positioning us well to welcome new members," Kaiser spokeswoman Laura Lott said.
Recent expansion and improvements at Moanalua Medical Center include the completion of the new Mauka Tower project that added 42 patient beds, including 18 new private rooms in the Neonatal Intensive Care Unit, as well as new diagnostic imaging technology.
Additional investments include a 40,000-square-foot Kona medical campus, scheduled to be completed by mid-2014, and future expansion plans for West Oahu and Upcountry Maui.
"The funds we spend on construction, supplies and labor put millions of dollars back into the local economy, creating local jobs and greatly improving the economic health of the communities we serve," Lott said.
Kaiser’s operating expenses rose 3.9 percent last quarter to $292.2 million from $281.2 million. That just outpaced its operating revenue of $291.1 million, which was up 3.8 percent from $280.5 million in the year-earlier quarter. Kaiser’s operating loss widened to $1.1 million from $700,000 in the year-ago period.
Investment income fell 13.3 percent to $1.3 million from $1.5 million.
Hawaii Medical Service Association, the state’s largest insurer, plans to report its earnings Monday.
