Kaiser Permanente Hawaii, the state's largest health maintenance organization, said net income slid by 83 percent in the first quarter as it continued to cope with rising costs for providing healthcare to its members.

The health plan reported profit in the January-to-March period fell to $700,000 from $4 million a year earlier, and said it was continuing efforts to realign expenses, including reviewing all contracts and analyzing staffing.

Kaiser reported the lower profit as expenses for providing healthcare increased. The health plan brought to Hawai'i in 1958 by industrialist Henry J. Kaiser has been battling a three-year decline in membership, and the first-quarter report showed it had 223,000 participants in its plans, or about 3,000 fewer than a year earlier. However, the report showed the membership number held steady when compared to the end of 2006.

Expenses rose $1.4 million to $220.1 million, while revenue was off $2.5 million to $217.8 million.

That produced a loss from operations of $2.3 million.

"The cost of providing the care and the cost of operations are rising quicker than the consumer price index," said spokeswoman Lynn Kenton. "Revenues are impacted as memberships rise and decline."

Once investment income of $3 million was added, the health plan recorded the $700,000 net profit for the first quarter.

The health plan also announced the appointment of David Delaney as vice president and chief financial officer of business operations. Delaney previously was with Hospital Corporation of America, where he served in a variety of roles.

Kaiser last year announced a 3.75 percent rate increase for 2007 that went into effect Jan. 1.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.