Strong performance tied to multi-year strategy focused on diversification, investment, growth, and innovation
PHILADELPHIA — September 25, 2020 — Independence Health Group, Inc., (Independence) the parent company of Independence Blue Cross, LLC, reported strong financial results for 2019 with total revenue of $19.2 billion and net income of $321 million, or 1.7 percent of total premium revenue. When revenues are combined with claims paid on behalf of self-funded employers, Independence had health care funds under management of $27 billion in 2019. The company has a five-year average net income margin of 0.86 percent. In 2019, Independence committed 87.2 cents of each premium dollar to pay medical costs for its members’ health care.
Independence paid more than $588 million in federal, state, and local nonpayroll taxes, state premium taxes, and other Affordable Care Act-related taxes and fees.
“The health care system faced its greatest challenge in living memory in the COVID-19 pandemic,” said Daniel J. Hilferty, Independence CEO. “But as we reflect on the company’s accomplishments in 2019, we see it as one of preparedness and hope, focused on the strategy of growth and innovation, improving access to care, and controlling costs. We will continue our record of disciplined execution and plan for the next phase in building a health care company for the future.”
Independence continued its multi-year strategy focused on business diversification and solid investments. The company’s ability to maintain business continuity during the early days of the COVID-19 pandemic was supported by the company’s ongoing stewardship of infrastructure and data capabilities. New market expansion and favorable medical cost trends in commercial business contributed to the company’s positive financial results.
Key milestones in 2019:
- Launched the Independence Center for Health Care Innovation, a hub for innovators and a clearinghouse for new ideas — for the health care industry, and also for the businesses and non-profits in the Philadelphia region.
- Continued focus on relationships with diverse suppliers leading to spending of $187 million with businesses owned by people of color, veterans, women, and the LGBTQ community
- Secured new Medicaid contracts in New Hampshire and North Carolina.
“In 2019, we remained focused on diversification across our lines of business, and that is evident in the successes we have seen,” said Gregory E. Deavens, Independence executive vice president, chief financial officer, and treasurer. “As we look to the future, we are assessing the near- and long-term impacts of COVID-19 as well as industry trends, opportunities, evolving care delivery, and changes in the health care landscape.”
In July Independence communicated to our customers that the company would expand its financial support during COVID-19 and issue nearly $120 million in premium credits and rebates to fully insured employers. The company offered medical and dental premium credits and rebates to fully insured employers, as well as extending payment options for certain fully insured employers and providing premium rebates due to the effective management of medical costs.
2019: A look back
- Care Cost Estimator. The enhanced Care Cost Estimator allows members to “know before they go” and avoid surprises. At home or on the go from a mobile device, members can use the tool to compare estimated out-of-pocket costs for doctors and services covered by their health plan. They can see quality ratings for network doctors and other health care professionals.
- MANNA partnership. Independence partnered with Philadelphia-based MANNA to deliver free and nutritious meals to Keystone 65 HMO members with certain chronic conditions after they get out of the hospital. The program, which was expanded in 2020, marked the first time MANNA partnered with a Medicare Advantage plan to offers meals as part of a benefits package.
In the community:
- Health of America Forum. More than 500 health care providers, health experts, and employers gathered in Philadelphia in November for the first national Health of America Forum, “Millennial Health: A Call to Action,” hosted by Independence and the Blue Cross Blue Shield Association. The forum offered a chance to understand more about millennials and learn how Blue Plans are working to address the health care risks of this generation. For example, six of the top ten conditions affecting millennials are behavioral health conditions. Attendees focused on solutions like improved health care access, integrated care, and workplace wellness.
- Mental Health. Launched a mental health public awareness campaign that included a focus on social media tied to millennial health. This campaign continues in 2020 as the #mindPHL Together campaign with the City of Philadelphia. The campaign aims to reduce the stigma associated with needing mental health support and encourage Philadelphians to seek help for themselves and others.
- Celebrate Caring. Independence honored the collaborative work of nurses through the first-ever Celebrate Caring The company received nearly 700 nominations of nurses who go above and beyond to deliver exceptional care. Nominees came from more than 180 different health care settings.
- Keystone Connection to Wellness. Independence and AmeriHealth Caritas formed this new initiative with Project HOME to address the significant health disparities in life expectancy and infant mortality experienced by North Philadelphia residents.
- Blue Crew. More than 1,700 Blue Crew volunteers donated over 15,000 hours in support of 92 nonprofit organizations in our region. The Blue Crew participated in 354 service projects.
- Independence Blue Cross Foundation: The Independence Blue Cross Foundation teamed up with the Pennsylvania Department of Drug and Alcohol Programs and Bucks County Drug and Alcohol Commission to announce new funding for emergency room “warm hand-offs.” The program puts overdose survivors in immediate contact with a certified recovery specialist. The Foundation also launched a successful first season of the “Someone You Know” podcast to address the stigma of opioid misuse, reaching listeners in 49 states and 28 countries.
- Announced key provider agreements including Einstein Healthcare Network, Trinity Health, and Cancer Treatment Centers of America.
- Penn Medicine pilot. Primary Integrated Care Program (PIC), a pilot from Independence and Penn Medicine, helps primary care practices deliver evidence-based behavioral health care, extends the reach of specialists, and addresses the whole-person health of members. PIC launched at eight Penn practices serving more than 40,000 Independence members. The pilot resulted in the identification of members who had undiagnosed or untreated behavioral health conditions, including some with suicidal ideation. PIC also improved results in chronic disease care, as patients with depression are three times less likely to adhere to a treatment care.
- Christopher’s Hospital for Children. Independence offered financial and general support to the Drexel/Tower coalition purchasing St. Christopher’s Hospital for Children to ensure that the children and families who rely on St. Christopher’s can continue getting the care they need.
Through its subsidiaries, Independence ended 2019 serving 7.8 million members nationwide. In addition, the company employed more than 10,000 people throughout the country.
Independence ended the year with $3.3 billion in surplus, which ensures that the company has the resources to pay claims and keep customers secure, as regulated by the Pennsylvania Insurance Department.