Hawaii Medical Service Association reported a $17 million loss in the fourth quarter of 2018, citing negative investment returns and infrastructure upgrades.

HMSA, which posted a $12.2 million profit in the year-earlier quarter, said administrative expenses grew to $94.3 million, up from $87.1 million, as it invested in infrastructure, including technology.

The state’s largest health insurer collected $891 million in premiums, up from $828.7 million, and spent $777 million, compared with $725.9 million, on benefits for its 724,008 members. Fees and taxes related to the federal health care law, the Affordable Care Act, totaled $868,000, compared with $604,000. The health plan said operating gains of $18.8 million, up from $15.1 million, were dragged down by investment losses of $6.4 million versus investment gains of $6.1 million in the year-ago quarter.

Despite poor investment performance, federal taxes and a fourth-quarter loss, “HMSA’s bottom line remains strong,” said Michael Stollar, HMSA’s president and chief executive officer, in a news release.

“Every dollar of the premiums we administer is used to improve the lives of our members and the health of Hawaii,” he said. “By keeping that as our top priority and making sure that we measure every decision with that in mind, we can confidently say that we’re delivering the best quality health care at the most affordable cost.”

HMSA’s membership dropped by 8,152 members year over year, while its reserve jumped to $562.4 million, or $776 per member per month, from $478 million, or $652.

Meanwhile, in a dramatic turnaround, Kaiser Permanente Hawaii reported a $5.1 million fourth-quarter profit, reversing an $88 million year-earlier loss.

The state’s largest health maintenance organization — both a medical provider and health insurer — said “lower outside medical expenses” for its 251,659 members resulted in a positive fourth quarter.

Kaiser collected $400.8 million in premium revenue, up from $368.4 million, and paid $396.5 million, down from $456.5 million, for members’ medical benefits. That resulted in an operating gain of $4.3 million — versus an $88.1 million loss the year earlier. Investment income of $800,000, compared with $100,000, boosted the bottom line to $5.1 million.

Kaiser, which opened its Honolulu hospital in 1958, is investing $60 million in a medical office in Kapolei to expand services in the growing West Oahu community. The 40,000-square-foot medical building, which will include primary and specialty care as well as prevention and wellness programs, is expected to be completed in 2021 at the corner of Kapolei Parkway and Kamokila Boulevard.