Kaiser Permanente Hawaii earned a $1.4 million profit in the fourth quarter, up from $200,000 in the year-earlier period, after gaining more than 5,000 members primarily through the Obamacare health insurance exchange.
The state’s largest health maintenance organization — both an insurance company as well as a medical provider — reported quarterly revenue of $305.7 million, up from $297.2 million. Expenses totaled $304.3 million, an increase from $297.2 million. It posted operating income of $1.4 million and didn’t record investment income for the quarter.
Kaiser’s membership as of Dec. 31 totaled 231,836, up from 226,603 at the end of 2013.
"We were fortunate to have good membership growth on Oahu, Maui and Hawaii island. That membership growth helped with our overall financial performance," said Thomas Risse, Kaiser’s chief financial officer. "We may need more clinicians, but we don’t need more administrative personnel. We’re able to spread administrative costs across a greater number of people."
For the year, Kaiser’s revenue totaled $1.2 billion, up from $1.16 billion in 2013, while operating expenses grew to $1.21 billion, compared with $1.17 billion.
The result was a $4.2 million annual operating loss, down from a $4.8 million loss the prior year. However, investment gains of $2.1 million — a drop from $3.8 million in 2013 — lowered Kaiser’s net loss to $2.1 million. The HMO posted a net loss of $1 million the year earlier.
Kaiser is the only health insurer currently selling small-business policies on the Hawaii Health Connector, the state’s online insurance marketplace created by the Affordable Care Act, also known as Obamacare.
Hawaii Medical Service Association, the state’s largest health insurer, sells individual plans on the Connector but stopped selling small-business plans on the exchange last year, citing the significant time and money it spent dealing with ongoing technical problems of the exchange.
"Businesses that want to take advantage of tax breaks need to use the Connector. We want to make sure businesses have access (to tax credits available on the exchange)," Risse said.
Risse said the company was able to rein in health care costs and also had a membership boost from state workers and from Medicare, the health insurance program for seniors.
In 2014, Kaiser said it completed the last of its $140 million expansion and renovation of the Moanalua Medical Center and Clinic. It also invested $10.5 million in a 10,000-square-foot gastroenterology clinic at Mapunapuna Medical Office and opened a $50 million Kona Medical Office in July on Hawaii island.
The company, which has 4,500 employees, said it also made major investments in its digital health care initiatives, including a "medical selfie" system that allows patients to send photos of their health problems for diagnosis by their physicians.
In addition, Kaiser has invested in its online system, which offers lab and X-ray results, prescription refills, appointment scheduling and patient-physician communication through My Health Manager, its electronic member access system.
