Blue Cross Blue Shield of Massachusetts
Annual Report 2013

At Blue Cross Blue Shield of Massachusetts, we're offering innovative health care solutions for our members, employer customers and hospital and physician partners.

In this brief video, Andrew Dreyfus outlines our strategic priorities and highlights two especially difficult challenges that require collaboration by everyone in the health care community – cost and complexity. There's still a lot to be done, but the products, programs and partnerships featured on this website point to a future where health care works better for everyone, at a cost we can afford.

We're empowering patients to become active partners in their health care for the first time in decades. Andrew Dreyfus

It is hard to overstate the amount of change taking place in health care today. Along with the Affordable Care Act, the movement toward consumerism and patient engagement, advances in technology, and the steady rise in chronic disease have all created new challenges and opportunities.

Our innovative products, programs, and trusted advice help employers derive maximum value from their health benefits and prepare strategically for what lies ahead.

Employers have taken a leadership role in trying to reduce health risks linked to factors like physical inactivity, smoking, poor nutrition, and stress, but they encounter tough challenges. Topping the list: engaging employees, sustaining results, and measuring impact.

After examining the evidence for best practices in prevention and wellness, we introduced a new suite of solutions designed to overcome these obstacles.

The natural progression in a population is for lifestyle-related health risks to increase if they're left unaddressed. Cathy Hartman

Our Alternative Quality Contract (AQC), an innovative payment model that rewards doctors and hospitals for the quality, efficiency, and effectiveness of the care they provide, continues to produce measurable results.

The AQC also encourages long-term investments in improving the outcomes of care. For example, a Boston Children's Hospital program called CAPE uses home visits to help children with severe respiratory problems avoid hospitalization.

In a very competitive environment, our membership grew and our financial results were on target. Our 3,700 associates worked tirelessly to serve our customers and gave freely of their time and talent to strengthen other nonprofits.

Sadly, 2013 will also be remembered for the Boston Marathon bombing, but the skill and compassion of medical workers, public safety personnel, and individual bystanders testified to the strength of our community.


Alere wants to be “the healthiest company anywhere,” says Bob Hargadon, VP of Global Human Resources. In 2013, this world leader in health care technology and management chose us to be a partner in that quest.

For Alere, corporate health includes excellent benefits, consumerism, and wellness inside and outside the office. A key strategy is to increase the use of high-quality, lower-cost providers.

“We chose Blue Cross for their tiered products in Massachusetts and their nationwide Blue Distinction Centers,” Hargadon says. Alere's 6,000 U.S. employees are offered a plan that places primary care providers and acute-care hospitals in tiers based on cost and quality. Members pay less out of pocket when they choose higher-value providers.

“It's a way to align the benefits we offer with the services we provide in the marketplace,” Hargadon adds. “We believe that knowledgeable employees will make the right choices about health services and that together we can better manage rising costs.”

Boston Duck Tours
Boston Duck Tours

In 2013, Boston Duck Tours CEO Cindy Brown worked with broker Tim Nugent to select Blue Cross Blue Shield of Massachusetts as the company's new health insurer. “We have all kinds of employees – mechanics, managers, drivers, sales people, service reps – and most of them are seasonal workers,” Brown says. “We wanted a plan that works for everyone, and Blue Cross came through with excellent choices.”

“Cindy has always been super-focused on maintaining high-level benefits for all their employees, and Blue Cross offered competitive rates and a clear commitment to top-notch service,” says Nugent, a principal at The Incentive Group, LLC. “Switching to Blue Cross went very smoothly because of their great reputation in the marketplace.”

With 30 year-round and 100 seasonal employees, Boston Duck Tours gave more than 600,000 people an informative and entertaining ride through Boston last year, and 25 Ducks carried the World Champion Boston Red Sox on their Rolling Rally victory celebration in November.

Tree Tech, Inc.
Tree Tech

In 2013, Tree Tech president Andy Felix worked with broker Cindy Gariepy to add new savings options to the company's health plan. “We take a hard look at our health benefits every year with Cindy's help,” Felix says. “We wanted to hold our costs down but we didn't want to cut benefits for our 90 employees.”

The answer was Blue Funding Solutions, a new program that offers groups with 51–99 employees a self-insurance option with fixed monthly premiums and the opportunity for a year-end rebate if claims are below projections. “Blue Funding Solutions has the level monthly funding you get with a traditional, fully insured plan, but it allows the employer to monitor claims and have a year-end reconciliation,” says Gariepy.

Adds Felix: “With Blue Funding Solutions, we can earn back up to a month's premium at the end of the year and there's no downside risk.”

Tree Tech provides tree services in Massachusetts and Rhode Island, and its crews have been featured in the Big Bad Wood TV series.

Beacon Hill Staffing Group
Beacon Hill Staffing Group

Putting Massachusetts to work since 2000

Andy Wang, CEO of Beacon Hill Staffing Group, knows what he wants from a health plan: “#1, comprehensive, outstanding health care, and #2, affordability.”

The company provides executive search, staffing, and contract consulting, with 350 internal employees plus more than 3,000 temporary workers in 35 states.

With many options on the table, Wang and CFO Aaron Mace made a strategic decision to offer Blue Cross to all of their employees, nationwide. They also chose our dental, life, and disability coverage, so the firm receives Pathway to Savings trend discounts. Pathway to Savings is a multi-year strategy that lets employers maximize savings in three areas: product choice, total benefit package, and employee health improvement.

“Blue Cross found that we have relatively high utilization, so we added some cost-sharing features with deductibles,” Wang says. “That way, employees take more ownership of their health care decisions and we're working collectively to control costs.”

The McCormack Firm, LLC
The McCormack Firm

Health insurance is the third largest cost for The McCormack Firm, so Legal Administrator Clare Marie Wheeler is always on the lookout for new ways to save. Last year, she discovered Healthy Actions with help from broker Neil Kutzen of Baystate Benefit Services.

“I created a spreadsheet with all their options, and the potential savings from Healthy Actions jumped right out,” Kutzen says. Sure enough, the firm, which offers a broad range of trial and litigation services and has two dozen employees, earned a substantial premium rebate last year.

Healthy Actions is available in Massachusetts to individuals and companies with up to 99 employees. If participants complete a health assessment and act on their doctor's recommendations, the individual, the company, and the doctor all receive financial rewards.

Participating employees can receive up to $300 from Healthy Actions, so The McCormack Firm sets aside time for daily walks and offers free membership at a nearby gym.

Reinventing Home Visits

Sixteen-year-old Caleb has severe cerebral palsy. Last year, after he had to be fitted with a tracheostomy to help him breathe, he joined the Boston Children's Hospital CAPE program. Founded by Dr. Robert Graham and respiratory therapist Lauren Perlman, CAPE (Critical Care, Anesthesia Perioperative Extension) uses home visits and coordinated follow-up care to help children with chronic respiratory insufficiency avoid hospitalization. Although CAPE predates the hospital's participation in our AQC, its expansion has been supported by a Blue Cross grant for innovation in primary care, and Dr. Graham says the two fit together perfectly.

“Care coordination is the crux of what we do, and essential services like those our respiratory therapists and social workers provide wouldn't be reimbursed in a traditional payment system,” he says. “We want to optimize outcomes for kids and their families, and when we can also make the best use of resources for these high-cost patients, everyone benefits.”

Corporate Citizenship
Corporate Citizenship

Our Corporate Citizenship focuses on five areas – healthy child development, education enrichment, family nutrition, healthy environments, and sustainable health system improvements.

In our Skills-Based Volunteer Program, associates share their expertise with nonprofits that need to bolster their business capacity. Last year, 35 associates were matched with 11 organizations statewide. At the West End House Boys & Girls Club, Sandra Cole, Kristen McQuaid, and Julianne Bride worked with Executive Director Andrea Howard on human resources strategies.

“We were adding five employees and we don't have a full-time HR person,” Howard says. “The Blue Cross team had us think through what we want people to understand about our mission and values, and how to prepare them even before they start. They were wonderful colleagues and they gave us a concrete plan that couldn't have been more timely.”

For more information, see our latest pdf iconCorporate Citizenship annual report.

Diversity & Inclusion

Our longstanding practice of hiring a diverse workforce has been a major factor in our success. Having associates that reflect the communities we serve improves our ability to meet the needs of customers, and it makes Blue Cross a better place to work.

Last year, we broadened this commitment, as Su Joun, Senior Director of Talent, Inclusion, and Mobility, explains: “We know that recruiting a diverse talent pool is only part of the equation; we also need to develop current employees whose perspectives can be invaluable throughout the company.”

One step in that direction is Blue Express, a career enhancement program that allows associates to develop new skills and try different work during two five-month deployments in business areas other than their own. They devote about 20% of their work time to their Blue Express assignments, and they also benefit from skills training and professional mentoring.

For more information, see our latest Diversity & Inclusion annual report.

Diversity and Inclusion

The first Blue Express participants started in September. Standing from left; Francisca Anna Ribeiro, Theresa Tillmon, Pete Sally, and Duane Tynes. Seated from left; Rinaldo Dorman, Portia Lee, Tamar Zaidenweber, and Hiren Thakkar.

The Strength of a Community

For our city and state, and for friends of Boston everywhere, the meaning of community became very clear in 2013, as a tragic event inspired heroism, compassion, and unity.

On April 15th, explosions near the Boston Marathon finish line killed three people and seriously wounded many others. Race volunteers, first responders, and onlookers scrambled to care for victims, saving lives and limbs. Medical professionals at Boston’s trauma centers treated multiple, devastating wounds, and everyone who arrived at a hospital alive survived.

Almost a quarter of those directly affected by the bombings were our members, and many more were traumatized. We mounted a rapid response, working with local hospitals to identify members and help coordinate their care, and we created a special service team with expertise in case management and mental health.

Within days after the bombing, contributions were pouring into a fund for victims, including $180,000 from our company and associates.

Winchester Hospital staff nurses Eun Kim, Julie Christopher, Sun Park, and Betsy Hurowitz were in the Marathon medical tent as the race started. Three hours later, they cared for almost 100 bombing victims in a half-hour period.

Among the Blue Cross associates involved in our response were from left; Jennifer Carbone, Erika Braga, Lisa Wu, Dr. Jeff Simmons, Michael Dent, Keyeona Coleman, Kate Glynn, and Bridget Gately.

Facts and figures
Board of Directors (as of December 31, 2013)
George R. Alcott, III Vice President, Massachusetts AFL-CIO
Brian M. Barefoot President Emeritus, Babson College
Andrew Dreyfus President & CEO, Blue Cross Blue Shield of Massachusetts, Inc.
Helen G. Drinan President, Simmons College
Richard C. Garrison President, Bink Inc.
Paul Guzzi, Vice Chair President & CEO, Greater Boston Chamber of Commerce
Bruce H. Hamory, M.D., FACP Executive Vice President & Managing Partner, Geisinger Consulting Services
Philip W. Johnston President, Philip W. Johnston Associates
Gloria C. Larson, Vice Chair President, Bentley University
Ralph C. Martin, II Senior Vice President & General Counsel, Northeastern University
Robert F. Meenan, M.D. Dean, Boston University School of Public Health
Dorothy E. Puhy Executive Vice President & COO, Dana-Farber Cancer Institute
Timothy M. Sweeney Executive Vice President, Liberty Mutual Insurance
Paul F. Toner President, Massachusetts Teachers Association
William C. Van Faasen Chairman of the Board of Directors, Blue Cross Blue Shield of Massachusetts, Inc.
Benaree P. Wiley Principal, The Wiley Group
Phyllis R. Yale Senior Advisor, Bain & Company, Inc.
Leadership Team (as of December 31, 2013)
Andrew Dreyfus President, Chief Executive Officer
Bruce Bullen Chief Operating Officer
John Fallon, M.D. Senior Vice President, Chief Physician Executive
Sarah Iselin Senior Vice President, Policy & Community Partnerships, Chief Strategy Officer
Stephanie Lovell, Esq. Senior Vice President, General Counsel
Allen Maltz Executive Vice President, Chief Financial Officer
Jay McQuaide Senior Vice President, Corporate Communications
Jason Robart Senior Vice President, Chief Human Resources Officer
Dolar figure
Financial Results

2013 Combined Balance Sheets and Income Statements

Our Combined Balance Sheets and Income Statements provide a statutory-basis overview of the financial results of both Blue Cross Blue Shield of Massachusetts, Inc. and Blue Cross Blue Shield of Massachusetts HMO Blue, Inc.

pdf iconView our 2013 Combined Balance Sheets and Income Statements

2013 Audited Financial Reports

2013 Audited Financial Reports include Audited Statutory-Basis Financial Statements for Blue Cross and Blue Shield of Massachusetts, Inc. for the years ended December 31, 2013 and 2012 with Report of Independent Registered Public Accounting Firm. The reports also include the Audited Statutory-Basis Financial Statements for Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc. for the years ended December 31, 2013 and 2012 with Report of Independent Registered Public Accounting Firm.

pdf iconView our 2013 Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc.

pdf iconView our 2013 Blue Cross and Blue Shield of Massachusetts, Inc.