The state’s largest health insurers saw their financial results worsen in the fourth quarter.
Kaiser Permanente Hawaii lost $88 million while Hawaii Medical Service Association’s net income fell to $12.2 million.
The loss for Kaiser — both a health insurer and medical provider — was significantly higher than the $12.7 million year-earlier deficit largely due to higher volumes and costly acute cases, as well as the increasing expenses for prescription drugs, primarily new specialty medicines, said Dan Shaw, chief financial officer for Kaiser Foundation Health Plan, which had 251,302 members as of Dec. 31.
| KAISER FOURTH-QUARTER LOSS
$88 million
YEAR-EARLIER LOSS
$12.7 million
HMSA FOURTH-QUARTER NET
$12.2 million
YEAR-EARLIER NET
$28.7 million
|
“Kaiser Permanente Hawaii’s overall financial position is strong,” Shaw said in a news release. “We remain committed to providing the highest quality care for our members and the Hawaii community as we have for the past 60 years. While 2017 was a challenging year … we are focused on our long-term goal of providing quality, affordable health care to our members. We will continue to make improvements in efficiency in care delivery while ensuring we are providing the best care to our members.”
Kaiser generated $368.3 million in revenue, up from $342 million, and spent $457.2 million compared with $356.2 million in the year-ago quarter. That widened its operating loss to $88.9 million from a shortfall of $14.2 million. Income from investments totaled $900,000, down from $1.5 million.
Meanwhile, higher administrative and benefit expenses dragged down HMSA’s earnings in the final three months of the year, with profits falling to $12.2 million from $28.7 million. However, investment gains of $6.1 million — up from $4.2 million — helped boost the bottom line.
The state’s largest health insurer collected $828.7 million in premiums, up from $793.5 million, and paid $725.9 million in medical benefits, up from $688.2 million. Administrative expenses totaled $87.7 million, up from $67.3 million. The health plan’s operating gains totaled $15.1 million, down from $38 million.
“Our financial stability allows us to develop new and better ways to improve the health of our members,” said Michael Stollar, HMSA’s president and chief executive officer, in a news release.
Executives of Kaiser and HMSA weren’t available for further comment.
