HMSA, Kaiser report rising medical costs

By Howard Dicus - bio | email

HONOLULU (HawaiiNewsNow) - HMSA lost $6 million in the third quarter while Kaiser Hawaii made $3 million - but both reported further increases in the cost of health care.

Hawaii Medical Service Association, the Blue Cross provider for Hawaii and the largest health insurer in the state, reported third quarter benefit expenses of $426 million, up $22 million from the same quarter last year.

HMSA tapped investment revenue and cash reserves to make up the difference.

"Health care costs are rising at a pace that simply cannot be sustained by our community," HMSA Chief Financial Officer Steve Van Ribbink said in his summer quarter report Monday.

Kaiser Foundation Health Plan's Hawaii region, the largest health maintenance organization in the state, said its $3 million profit left the operation about $3 million in the red for the first nine months of the year.

"Hawaii is experiencing modest job growth and we're welcoming new members as a result," Kaiser Hawaii CFO Thomas Risse said in his own quarterly report Monday.

Kaiser Hawaii operating expenses were $241 million, up $1 million from year-ago levels. The $3 million profit included $1.5 million in investment income, so operations ran even closer to break even that is first apparent.

HMSA, Kaiser, small health insurers and local hospital networks have all said that medical costs are rising because of a combination of circumstances, including more consumption of services by an aging population, more expensive miracle drugs and high-tech scanners that prolong life, an a tendency for uninsured residents to seek treatment at hospital emergency rooms, where costs are greater than at doctors' offices and acute care clinics.

Hawaii Pacific Health, Queen's Medical Center, HMSA and others are experimenting with financial incentives to do more preventive care, hoping it will be cheaper to prevent problems than to treat them.

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