Strong performance, multi-year strategy reflected in solid financial foundation and allows for increased contributions to community health initiatives
PHILADELPHIA — April 23, 2019 — Independence Health Group, Inc., (Independence) the parent company of Independence Blue Cross, LLC, reported strong financial results for 2018 with total revenue of $16.3 billion and net income of $324 million, or 2.1 percent of total premium revenue. The company has a five-year net income margin of 0.63 percent. In 2018, Independence committed 81.5 cents of each premium dollar to pay medical costs for its members’ health care, paying an average $35 million in medical claims per day or $12.6 billion for the year.
Independence paid more than $900 million in federal, state, and local nonpayroll taxes, including $317 million for the Health Insurer Fee as well as the gross receipts tax, state premium taxes, and other Affordable Care Act-related taxes and fees.
“Our multi-year strategy has allowed us to effectively navigate and manage all of the complexity in today’s health care industry, resulting in a solid financial foundation for Independence,” said Daniel J. Hilferty, Independence CEO. “We have the momentum to deliver affordable, quality health care coverage to our members nationwide, while continuing to improve our members’ experience and support important community initiatives aimed at keeping people healthy.”
The positive financial results are due primarily to favorable medical cost trends in consumer and small group businesses. A multi-year strategy of diversification, risk management, and innovative programs aimed at helping members achieve better health contributed to the strong year.
“Our enterprise-wide diversification strategy and disciplined management approach continue to provide us with opportunities to ensure our long-term stability as a health care company – for our current members and future generations,” said Gregory E. Deavens, Independence executive vice president, chief financial officer, and treasurer.
In 2018, Independence celebrated several key achievements, among them:
- Landmark spending with diverse suppliers in excess of $100 million, a first for the company and the result of a multi-year plan to build alliances with businesses owned by people of color, veterans, and women. Data, wellness, and clinical services were key drivers of this diverse spend in 2018.
- Independence’s third-party administrator subsidiary acquired 30,000 customer contracts from Minnesota-based Comprehensive Care Services, Inc. We successfully migrated the 30,000 commercial and Native American business contracts to our core third party administrator platform.
Independence’s positive financial performance in 2018 provided an opportunity to continue developing effective solutions for getting health care right.
For members:
- Digital health. Launched in 2018 to offer patients a better roadmap through their health care journey, Quil Health is the new Independence joint venture with Comcast NBCUniversal. Quil’s platform will let patients access personalized content and information and communicate with their providers and other stakeholders, at home or on-the-go.
- Care management. Independence’s Achieve Better Health suite of care management products combines award-winning engagement tools and predictive analytics with personalized solutions to tackle specific health concerns for customer’s employees, such as onsite preventive check-ups, COPD and asthma digital monitoring, and fertility and pregnancy care.
In the community:
- IBC Foundation. Independence bolstered its commitment to community-based initiatives with a $25 million contribution to the Independence Blue Cross Foundation in 2018. Dedicated to fighting the opioid epidemic, in 2018 the Foundation launched “Someone You Know,” a public awareness campaign to address the stigma of opioid misuse. The Foundation also hosted a national conference aimed at improving the health of people and communities affected by the opioid epidemic.
- Blue Crew. Participation in the Independence Blue Crew volunteer program reached an all-time high with over 1,800 Blue Crew volunteers donating more than 15,000 hours in support of 105 nonprofit organizations in the region. In total, the Blue Crew participated in 351 different service projects.
- Fearless Fit. Ongoing commitment to help fund initiatives aimed at keeping people active together totals nearly 65 years of support for the Blue Cross RiverRink, the Blue Cross Broad Street Run, National Walk @ Lunch Day, Indego bike share, and Independence LIVE.
With providers:
- Hospital readmissions. After the first year of an innovative, five-year contract, University of Pennsylvania Health System and Independence reported a more than 25 percent cut in hospital readmissions rates – the largest readmission rate reduction in both organizations’ history and the first collaboration of its kind in the United States between a health system and a health insurer.
- Seniors. Independence entered into a partnership with ChenMed, which opened four Dedicated Senior Medical Center locations in Philadelphia in 2018 focused on offering personalized and affordable services that improve the health of low-income seniors.
- Opioids. This year, Independence’s efforts to work with providers to reduce opioid use, prescriptions, and abuse saw positive results, including a 45 percent reduction in opioid users, a 35 percent reduction in opioid prescriptions, and an 18 percent reduction in dosage.
Through its subsidiaries, Independence closed 2018 serving nearly 8.2 million members nationwide. In addition, the company employed more than 10,000 people throughout the country.
The company ended the year with $2.9 billion in surplus, which is in the “efficient” range as defined by the Pennsylvania Insurance Department and ensures that the company has the resources to pay claims and keep customers secure.