Independence Blue Cross is reporting positive financial results.
The health insurer reported an after-tax income of nearly $315 million for 2011.
After two years of incurring losses, the health insurer returned to positive financials in 2010. A second year of positive results in 2011 demonstrates the company’s financial stability and stems from investments in better serving customers, preparing for health care reform changes and enhancing the health of the people it serves.
“This is an exciting time for Independence Blue Cross and the millions of customers we serve in Southeastern Pennsylvania and throughout the country,” IBC President and CEO Daniel J. Hilferty said during a media call to highlight the company’s financial performance.
“A few years ago we experienced some financial hardships due to the weakening economy. However my predecessor, Joe Frick, began a series of moves to position IBC on a move forward-thinking path — and we’ve built on the solid groundwork that was established.”
“Despite the weakened economy, rising Medicare costs and an evolving health care environment, Independence Blue Cross successfully navigated 2011,” said Alan Krigstein, IBC executive vice president and chief financial officer.
Krigstein said IBC’s total 2011 revenue was $9.2 billion, with net income after taxes of $314.8 million and a profit margin of 3.4 percent.
“Our 3.4 percent margin is modest when compared to our publicly traded competitors whose returns were nearly double that,” he said.
In 2011, IBC paid $210.4 million in federal, state and local non-payroll taxes.
Krigstein said the company focused on three critical areas to maintain financial stability, including enhancing IBC’s core business by adding new individual insurance products and lower cost insurance for small businesses; investing in the company to modernize and become more efficient; and managing the business with fiscal discipline.
“The business decision we’ve made in 2011 are reflective of the direction that we are taking at Independence Blue Cross. Those positive results and our continued fiscal discipline will enable us to enhance our members health, remaining a committed and active civic leader in the Philadelphia region and continue to make changes that our going to transform our industry,” said Krigstein.
Over the past year, IBC attracted more than 45,000 new members by developing new lower cost health plans. Overall, IBC and its affiliated companies had 3.1 million members nationwide in 2011, a 1.4 percent increase above 2010.
Hilferty says IBC’s successful year was attributed to factors including developing lower cost health plans and forming strategic partnerships with like-minded organizations also focused on transforming the health care system.
The company partnered with Blue Cross Blue Shield Michigan to acquire AmeriHealth Mercy, forming one of the country’s largest Medicaid managed care companies. The acquisition of AmeriHealth enables IBC to expand into the growing Medicaid managed care market. The expansion of Medicaid eligibility under the Affordable Care Act is expected to increase the number of people eligible for Medicaid by 16 million by 2019.
“We’ve also allocated time, effort and funding towards adopting innovative and highly effective new patient care models to do our part in keeping our members well,” said Hilferty.
For example, IBC enhanced its nationally-recognized physicians and hospitals incentive program and opened more patient-centered medical homes which offer a team approach to high quality coordinated patient care. There are more than 200 patient-centered practices in IBC’s network serving 500,000 thousands members in Southeastern Pennsylvania.
Last year, the company launched the IBC Foundation with a total investment of $45 million. The foundation focuses on transforming health care through the communities that IBC serves. As a part of its focus on caring for the most vulnerable, the foundation supports 34 private, nonprofit clinics that provide high-quality preventive care to 145,000 uninsured and underinsured men, women and children in the five-county Philadelphia region. The foundation is also funding scholarships at 22 area nursing schools to increase the supply of qualified nurses in the region.
Headquartered in Philadelphia, IBC and its affiliates provide coverage to nearly 3.1 million people.