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The Honolulu Advertiser
Posted on: Wednesday, May 17, 2006

Kaiser profit rises to $4 million, helped by cost cutting

Advertiser Staff

Kaiser Foundation Health Plan Inc. Hawaii, the state's second-largest health insurer, posted a $100,000 increase in its first-quarter profit, helped by efforts to keep costs down amid rising healthcare and other expenses. Profit was 1.8 percent of revenue.

Revenue: $220 milllion vs. $207 million a year earlier.

Investment income: $2.4 million vs. $2.5 million

Operating expenses: $218.7 million vs. $205.9 million

Operating income: $1.6 million vs. $1.4 million

Net income: $4.0 million vs. $3.9 million

Net income as percent of revenue: 1.8 percent vs. 1.9 percent


  • Kaiser's first-quarter revenue increase barely outpaced a rise in operating expenses.

  • The $200,000 increase in operating profit was helped by a cost-cutting program that included delaying cost-of-living increases for management and holding open vacant positions.

  • Net income as a percent of revenue fell to 1.8 percent from 1.9 percent.

  • Kaiser's costs include building and technology projects.


    "We've been focusing for months now on our cost infrastructure and the opportunties that are available. We're doing a lot of work in managing the patient beds and making sure they get the best possible service."

    Allison Maney
    Kaiser acting chief financial officer


    Kaiser's construction work on a new 106-bed tower at the Moanalua Medical Center is 5 percent complete and will continue for two more years.

    The insurer is in the second year of a four-year project that will automate its medical records system. The effort is designed to improve care and increase efficiency.

    Kaiser is monitoring how the new Medicare drug plan is being used and its impact on costs.