Honolulu-based Hawaii Pacific Health, which is seeking to affiliate with Blue Cross Blue Shield licensee Hawaii Medical Service Association under a new nonprofit parent organization, reported an operating loss of $13.6 million (-1.3% operating margin), through the second quarter of 2026.
Hawaii Pacific Health’s operating performance for the six months ended Dec. 31 was an improvement over an operating loss of $23.2 million (-2.4% margin) during the same period last year, according to its Feb. 11 financial report.
The health system reported total operating revenue of $1.1 billion in the first half of 2026, up from $971.7 million last year. Net patient service revenue was $881.2 million, up from $822.7 million.
Total operating expenses were $1.1 billion, up from $994.9 million last year. Salaries, wages and benefits totaled $532 million, up from $504.9 million. Supply costs were $248.8 million, up from $209 million.
The system reported a net income of $59 million through the second quarter of 2026, up from $30.5 million last year.
Hawaii Pacific Health and Hawaii Medical Service Association announced Jan. 7 they planned to come together under a new organization called One Health Hawaii.
Hawaii Pacific Health President and CEO Raymond Vara said the affiliation has “the sole intent of creating an affordable, sustainable, high-quality, accessible healthcare system for the people of Hawaii.” He said savings over the years could reach “billions of dollars.”
Mr. Vara said the organizations will largely operate as they normally do but will work to achieve efficiencies through alignment while consolidating some administrative services without a reduction in workforce. He said the estimated approval process could take six to 18 months.
