Company drives strong results through partnerships, innovation, and strategic financial investments
Philadelphia, PA – Independence Blue Cross (IBC) today reported strong financial results in 2012 with a net profit margin of 1.8 percent and a net after-tax income of $191.5 million. The company attributes these results to strategic collaborations, sound financial management, and game-changing innovation initiatives that helped IBC continue exceeding customer expectations, enhancing the quality of care, and lowering costs.
Positioning the company for growth, this is the third consecutive year of positive results for IBC, one of the nation’s leading Blue health insurers. Focused on transforming health care in the Philadelphia region and the nation, IBC provided market-leading new products and services, forged partnerships with other leaders in health care on innovation and technology initiatives, and prepared for the changes health care reform will bring.
“From fully embracing reform to creating buzz in the marketplace about the new Independence Blue Cross – we like to say we’re 75 years strong and still changing the game,” said Daniel J. Hilferty, president and CEO of IBC, which serves more than seven million people in 19 states.
Hilferty continued, “I believe that as reform moves forward and health care undergoes unprecedented change, the health care companies that thrive will be those with a bold, clear vision that move rapidly, execute fresh ideas, and develop groundbreaking innovations – like Independence Blue Cross.”
In 2012, IBC recorded a net income of $191.5 million on $10.5 billion in revenue, compared to a net income of $314.8 million on $9.2 billion in revenue in 2011.
IBC’s 2012 success is due to multiple factors, including growth across lines of business, new models of care developed collaboratively with physicians and hospitals, and fostering innovation within the industry. For example, in 2012, IBC led the effort with health care technology company Lumeris, Inc. and two of the nation’s leading Blue plans, Highmark and Horizon Blue Cross Blue Shield of New Jersey, to purchase NaviNet, Inc., which has the best available technology for communicating with physicians and linking them easily to Lumeris’ transformative technology.
IBC has collaborated with physicians and hospitals to help combat problems in health care, such as rising costs, inconsistent quality, overuse of emergency rooms and frequent hospital admissions for the chronically ill. As a result, more than 80 percent of hospitals in the Philadelphia region have joined IBC’s innovative incentive program based on an accountable care payment model, which rewards them for high-quality, cost-effective care. IBC has also become a national leader in the growth of patient-centered medical homes – models of high-quality, coordinated primary care that keep the chronically ill well. As a result, the percentage of members treated in 2008 in patient-centered medical home practices who had poorly controlled diabetes dropped from 33 to 18 percent by 2012.
To help transform our region into a national magnet for health care innovation, investment, and employment, IBC partnered with Penn Medicine and DreamIt Ventures to launch the first-ever Philadelphia-based health care “accelerator” — DreamIt Health. Ten companies were selected from all over the country to enter into a four-month boot camp in Philadelphia to help rapidly advance the development of their innovative health care start-ups.
“Even with a modest 1.8 percent margin, Independence Blue Cross remained financially strong in 2012, allowing us to continue serving our customers’ needs, enhancing the quality of care, and lowering costs,” says Alan Krigstein, IBC’s executive vice president and CFO. “This very solid financial year allowed us to invest in innovative capabilities to better serve our customers, keep them well, and prepare for the changes that health care reform will bring.”
As a leader in corporate social responsibility, IBC invested tens of millions supporting innovative health and wellness initiatives and forward-thinking organizations that build the health of the community. In 2012, the $56 million Independence Blue Cross Foundation introduced the Healthy Futures Initiative, a $1.8 million three-year initiative designed to tackle childhood obesity by inspiring kids to get fit, eat right, and stay well. The program is another example of how IBC is fulfilling its mission: Enhancing the health and wellness of the people and communities we serve.
In managing its business with fiscal discipline, IBC is able to continue to serve customers well and invest for the future. In 2012, IBC, as the largest health insurer in southeastern Pennsylvania:
- employed 7,400 people;
- served 34,600 employers;
- paid $8.5 billion to physicians, hospitals, and other health care professionals to care for members, and
- paid $250 million in federal, state, and local nonpayroll taxes, including $34 million in state premium taxes.
The company’s surplus for 2012 was $2.5 billion, which is in the “sufficient” range, according to the Pennsylvania Insurance Department’s guidelines, which means that IBC maintains a surplus level that is appropriate to ensure its long-term stability.