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Kaiser Executive Says Hawaii Insurer Losing Money Every Year

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The president of Kaiser Foundation Health Plan and Hospitals of Hawaii told employees in a memo that the health plan is losing money and has no sustainable growth plan.

Ron Vance detailed the troubles facing Kaiser Permanente Hawaii as the state’s second-largest medical insurer has fallen behind competitors, The Honolulu Star-Advertiser reported Sunday.

Kaiser is Hawaii’s largest health maintenance organization serving as both a medical provider and health insurer covering more than 250,000 members. The company is second in market share to the Hawaii Medical Service Association, which has 729,000 members.

The company recorded a year-to-date loss of $88 million in the third quarter that ended in September and is projecting a substantially higher loss in 2020, Vance’s recent memo said.

The health plan is losing “substantial amounts of money every year” and continues to fall behind on affordability, access and convenience for members, Vance said.

Kaiser’s national program office has lent the Hawaii region nearly $400 million over the past several years and delayed about $370 million of maintenance and capital projects.

Vance acknowledged the health plan and more than 400 physicians in the Hawaii Permanente Medical Group are not working well together, while competitors offer patient portals, video visits and access to more convenient urgent care than Kaiser provides, he said.

“We need to fundamentally rethink how we deliver medical care,” he said.

Paul Tom, president of consulting firm Benefit Plan Solutions, said Kaiser’s difficulties are due in part to members having difficulties connecting with their chosen doctors.

“If you can’t make appointments and get the doctors that you want, then you’re going to choose other plans,” Tom said.

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