The president and chief executive officer of the Hawai'i Medical Service Association got a bonus of nearly half a million dollars last year as the state's largest insurer posted an operating loss and raised healthcare rates.

Robert Hiam, who has led HMSA for more than a decade, received a $497,117 bonus on top of his $620,000 salary, pushing his compensation to $1.1 million last year.

Nine other top HMSA executives also received substantial bonuses last year. Michael Gold, the chief operating officer, got a $333,318 bonus in addition to his $490,000 salary, for example, while Steve Van Ribbink, the chief financial officer, got $171,727 on top of his $360,000 salary.

HMSA disclosed Hiam's salary and bonus in a news release yesterday afternoon that described the results of his performance evaluation last year as outstanding. The news release came as state Rep. Josh Green, D-6th (N. Kona, Keauhou, Kailua, Kona), the chairman of the House Health Committee, planned to share the salary and bonus information with reporters today as he urged HMSA to do more to help doctors in Hawai'i.

COMPARABLE PAY

HMSA said Hiam's pay is consistent with Mainland health plans with similar annual revenue. HMSA's annual revenue was $2.1 billion last year. An Advertiser study of the compensation of chief executives of Hawai'i's publicly traded companies, published last April, found that average pay was $1.7 million in 2005.

Allan Landon, the chairman of the HMSA board of directors and CEO of Bank of Hawaii, said the nonprofit health plan has treated personnel information as confidential in the past but chose to release Hiam's evaluation.

"HMSA and the board felt it was important for consumers to be more informed about their health plan, and learn more about one of Hawai'i's industry leaders," Landon said in a statement.

But HMSA had also known for weeks that Green, a Big Island doctor, had obtained the salary and bonus information through the state Department of Commerce and Consumer Affairs and was going to release it publicly.

Asked what he thought when he saw how much HMSA executives were making, Green said: "Wow."

"In some cases their bonuses alone are far more than a doctor's annual salary. This is not right. No wonder our health system is imploding," Green said. "On the Neighbor Islands, you can too rarely find an OB to deliver your baby, or an orthopedist to fix your broken bones, or an oncologist to treat your cancer.

"This is a crisis."

OPERATING LOSS

HMSA announced an operating loss last year due to healthcare costs that rose faster than premiums. Investment gains, however, helped the insurer post a net profit. HMSA raised rates for small-business customers by 3.8 percent last year and warned of higher rate increases this year if healthcare costs continue to climb.

Michael Stollar, HMSA's vice president of corporate communications, said Hiam's compensation reflects his responsibilities.

"I think what people need to understand is that HMSA is a $2 billion-a-year company in a very complex, rapidly changing, government-regulated, community-demand industry that needs strong, experienced leadership," he said.

"And when you put the salary numbers, for instance, of Mr. Hiam in that context, we believe those numbers look very appropriate."

HMSA also provided pay comparisons with chief executives for Mainland health plans that show Hiam's salary is competitive. The chief executive of Sierra Health Services, a managed-care health plan based in Nevada, earned $3.4 million; the executive of Coventry Health Care, a managed-care plan based in Maryland, received $2.7 million; the executive of Harvard Pilgrim Health Care, a health-benefits company serving the New England states, got $1 million; and the executive of Tufts Health Plan, a healthcare plan based in Massachusetts, got $900,000, according to HMSA.

NONPROFIT SALARIES

J.P. Schmidt, the state's insurance commissioner, said HMSA's executive salaries appear competitive for a company of its size and complexity. But he also thought the fact that HMSA is a nonprofit should be taken into consideration.

"I think it's legitimate to question the size of executive salaries for a nonprofit and look at the contributions to the community, look at, in the instance of an insurer like HMSA, the size of the reserves that they have," Schmidt said. "And we have."

Green said he wants HMSA to be more responsive to the issue of reimbursements, which, along with the costs of medical-malpractice insurance, has been among the biggest complaints from doctors.

"I am confident that they will heed my call to help the doctors and hospitals, and they will cease using their political clout to kill every bill that would make them accountable to the people of Hawai'i, and will instead use that time and energy to help solve this crisis," Green said.

Michael Hahn, a hand surgeon who is moving to Texas this spring, was named last month by the Hawai'i Medical Association as one of the doctors leaving the state because of the medical-malpractice climate. But Hahn said in an interview that while malpractice costs are a significant issue, his real concern was the near-monopoly of the HMSA over medical insurance.

"They are the number one, two and three reasons I'm leaving," Hahn said.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.