Together, We’re Making Quality Health Care Affordable

From Our CEO

Blue Cross of MA CEO Andrew Dreyfus talking with others.

Dear Friends:

As I think about the ways Blue Cross is working with others to make high-quality health care more affordable, three priorities stand out. Taken together, they have the potential to reshape how we think about, and experience, health care in Massachusetts and across the country.

  1. 1.

    Getting in Step with Consumers

    We operate in a complex, fragmented health care system that is out of step with what consumers demand in many other aspects of their lives, especially when their money or well-being are at stake. That has to change. Whether they’re choosing where to get their care, trying to understand a deductible, or managing a health savings account, our members want us to simplify their experience, anticipate their needs, and engage with them on their terms. Guided by our promise to always put our members first, we’re developing new programs and tools – some using the latest personal technology and others based on old-fashioned person-to-person outreach – to ensure that we deliver what contemporary health care consumers require.

    “Consumerism means our employees are asked to consider all their options when choosing health care, just as they would when making other important purchases.”

    Gail Beauregard, director of corporate benefits, Boston Scientific

  2. 2.

    Changing Payment Incentives

    Instead of incentives to do more, we offer doctors and hospitals the incentives, data, and support they need to perform at their best. For the past five years, the vast majority of doctors in our Massachusetts HMO provider network have participated in a new payment model we call the Alternative Quality Contract or AQC. Unlike traditional fee-for-service, which pays for activity – visits to a physician, diagnostic tests, admissions to a hospital – the AQC rewards better quality and outcomes. In 2014, independent researchers examined the first four years of the AQC and found that it has lowered costs and improved patient care for our HMO members. By 2016, we will offer new payment incentives for quality and efficiency that will include our Massachusetts PPO and Medicare Advantage membership as well.

    “This new kind of contract asks doctors and hospitals, together, to think about prevention, to think about high-value care, to think about reducing waste…”

    Zirui Song, M.D., Ph.D., Harvard Medical School

  3. 3.

    Turning the Tide on Chronic Disease

    It has long been known that chronic conditions such as diabetes, heart disease, and obesity are among the most debilitating, costly, and preventable of all our nation’s health problems, yet progress has been frustratingly slow. Five percent of our members account for half of our medical costs, and most of them have multiple chronic conditions linked to lifestyle risks and behaviors like diet, physical activity, and tobacco use. To help turn the tide, we’re working with our members, employer customers, and physicians and hospitals on new, outcome-oriented approaches to wellness, including personalized coaching, online programs and tools, and support for people living with chronic conditions. We believe that by focusing on what happens outside the doctor’s office – in people’s homes, communities, and work sites – we can help improve our members’ quality of life, reduce the burden of illness, and slow the rise in health care costs.

    “We firmly believe that the wellness program does impact our claim experience. For our active employees, our rates haven’t increased in four years.”

    Joe Shea, executive director, Hampshire County Joint Insurance Trust

As the brief stories in this report demonstrate, we share with our customers and provider partners a strong commitment to creating a far better consumer experience, using incentives to improve patient care, and reducing the burden of chronic disease. We still have a lot of work to do, but together we’re making real progress toward the goal of higher quality at lower cost.

With thanks and best wishes,

Andrew Dreyfus
President and CEO, Blue Cross Blue Shield of Massachusetts

Customer Solutions: Members, Employers, Brokers, Doctors, Hospitals, & Blue Cross collaborating for success.

Boston Scientific

New Tools Support Engaged Employees

A technician in clean-room gear examining something under a large magnifying lens.

When Boston Scientific decided to look for new ways to bolster their commitment to the health and financial security of their employees, the answer was to expand their decade-long relationship with Blue Cross.

Gail Beauregard, director of corporate benefits, explains:

Gail Beauregard smiling and leaning on a staircase with Boston Scientific offices in the background.
“We recognize that good health is critical to employee well-being, a productive work force, families, and the community.

Boston Scientific’s products and technologies are used to diagnose or treat a wide range of medical conditions for patients worldwide, and they have almost 10,000 employees in Massachusetts, California, Minnesota, Indiana, and Rhode Island. The company self-funds its employee health care, and about 95 percent of their covered employees choose Blue Cross products, including a consumer-directed plan with a health savings account.

“We made the shift to consumerism and new health plans in an effort to decrease the rate of rising costs associated with providing health care,” Ms. Beauregard says. “Consumerism means that our employees are asked to consider all their options when choosing health care, just as they would when making other important purchases. Blue Cross offered a combination of personalized services, coaching, and online tools that will help employees to make the very best decisions and become more engaged and invested in their own health.”

Factors that Boston Scientific considered in its decision, include:

  • Access to the Blue Cross system’s network of physicians and hospitals in all the states where Boston Scientific has employees.
  • In-house care management and behavioral health support.
  • Outreach services to help people get the most out of their health plan.
  • Care Concierge, which includes lifestyle coaching and medical consultation.
  • A Coverage Advisor Tool and a customized, mobile-friendly wellness website.

Genesis HR Solutions

Big Benefits for Growing Companies

A group shot of the Genesis HR Solutions team.

Hundreds of small and mid-sized companies entrust their human resource programs to Genesis HR Solutions, and this year, Genesis chose our company as the exclusive health insurance provider for their clients’ employees.

Headquartered in Burlington, Massachusetts, Genesis HR is a Professional Employer Organization (PEO) that acts as a partner and trusted advisor to businesses throughout New England. Their highly experienced team and MyGenesisHR web portal deliver HR services that are typically available only at larger companies. For example, they now offer six Blue Cross benefit options, with a combination of traditional and consumer-directed health plans. Bob Burbidge, the company’s CEO, says, “By partnering with Genesis to meet their HR needs, our clients can concentrate on the things they do best.”

“The transition to Blue Cross was really well received by our clients.”

Patty Hilger, who is president and chief operating officer, says their clients rely on Genesis to choose the best health coverage available. “We’re serving a very diverse set of businesses with about 2,300 employees. Providing a plan that offers access to good health care, affordably priced, and with the right network of doctors and hospitals, is very important for our clients and critical to our success.”

Genesis HR returned to Blue Cross after several years with another insurance carrier, and, according to president and chief financial officer Diane Stevenson, access to a nationwide provider network was an important factor. “Some of our clients have employees in other parts of the country, and offering Blue Cross means everyone gets the same level of great coverage. At the same time, Blue Cross understands the New England market better than a national carrier would.”

The Genesis HR team worked with broker Jennifer Borislow of Borislow Insurance to develop our renewed partnership.

James Hook & Co.

A Partnership That Spans Generations

Two people from James Hook & Co. inside their retail showroom with customers in the background.

Jimmy Hook and John Mulkerrin

James Hook & Co. is a treasured Boston institution, and we are proud to say that we have been their health insurer for “as long as anyone can remember.”

This small family business, managed by siblings from the third generation of the Hook family, has been selling lobsters on the Boston waterfront for 90 years. Blue Cross Blue Shield of Massachusetts is a relatively youthful 77 years old, and there are no records of exactly when we started covering James Hook’s workers, but everyone agrees that they were one of our earliest customers.

says general manager John Mulkerrin. “Our broker looks at other plans for us during renewal every year, but Blue Cross always seems to be the best fit. I can’t imagine why we’d ever go with anyone else.”

John is a co-owner of the company, along with Jimmy, Ed, and Al Hook, and their sister, Nancy Hook Doto. Most of their business is wholesale, but they also have a retail store and cafe with lobster rolls, soups, and fresh fish.

“We’re small – only eight out of all those Blue Cross members – but they give us good service, peace of mind, and products that keep our coverage affordable,” says Jimmy Hook. “There’s a lot of hard work involved, but I think both of our companies have a bright future!”

Cities & Towns

Wellness Focus Pays Dividends

We provide coverage to three quarters of the state’s municipalities, and some that had chosen other paths for their health insurance returned to Blue Cross, while groups that combine the purchasing power of multiple communities continued to expand their relationships with us.

Ten thousand of our members are covered through the Hampshire Group Insurance Trust, which includes public employers in four Western Massachusetts counties. Joe Shea, the Trust’s executive director, proudly points out that they have held premium rates flat for four years without changing benefits. He especially credits the Trust’s worksite Wellness Initiative, led by Christine Sass, which was developed with our company’s wellness experts. The initiative includes mini-grants that local “wellness teams” can use to create customized programs for their sites.

View Our Partners’ Perspectives

  • “One of the programs we’ve supported is workout at work.”

    Christine Sass, leader of the Hampshire Group Insurance Trust Wellness Initiative

  • “We were spending too much on insurance…”

    Bill Cross, firefighters union president, Town of Saugus

  • “Blue Cross Blue Shield has been a great partner for the Trust.”

    Joe Shea, executive director, Hampshire Group Insurance Trust

Saugus was one of several municipalities that moved its coverage back to our company in 2014, through our partnership with the Massachusetts Interlocal Insurance Association. Bill Cross, president of the town’s firefighters union, strongly supported the move back from the state’s Group Insurance Commission. “We came together and said, let’s find something that works for the town, the taxpayers, the employees, and the retirees, so we can have the best coverage at the best cost.”


Teamwork Enhances New Medicare Option

A doctor interacts warmly with an elderly patient.

In 2014, we began an innovative partnership with select Massachusetts physician groups, including our state's five Pioneer Accountable Care Organizations, to offer a new option for Medicare beneficiaries.

Our broad portfolio of affordable Medicare plans now includes Medex Choice, which offers members enhanced benefits when they choose a primary care provider from designated physician groups in our HMO Blue® network to coordinate their care.

“When Medex Choice members get their care at a Massachusetts Pioneer ACO or one of the other high-value groups in the Choice network, they benefit in two ways,” says Ken Arruda, Blue Cross' executive director of Medicare markets. “First, there's the team approach and high-quality, coordinated care these providers are recognized for, and second, they can lower their out-of-pocket spending when they need care.”

The Pioneer ACO model is one of several initiatives created by the Affordable Care Act to promote high-quality, efficient care for Medicare beneficiaries. Steward Health Care System, which is a designated Medex Choice provider group, joined the Pioneer ACO program when it began in January 2012.

Mark Girard, M.D., president of Steward Hospitals, explains the ACO concept: “As an accountable care organization, we are focused on delivering high-quality care more efficiently and in the most clinically appropriate setting. Our patients benefit from a team of providers working together to keep them healthy and help them better manage their care.”

Headshot of Dr. Mark Girard, speaker of the quote below.
“Thanks to our collaboration, plus substantial out-of-pocket savings when compared to traditional Medicare.”

Dr. Mark Girard

Medex Choice providers in the statewide HMO Blue network:

  • Accountable Care Associates
  • Atrius Health
  • Baycare Health Partners
  • Beth Israel Deaconess Physician Organization
  • Central Massachusetts Independent Physician Association
  • Cooley Dickinson Physician Hospital Organization
  • Mount Auburn Cambridge Independent Practice Association
  • Partners HealthCare
  • Steward Health Care System
  • All HMO Blue primary care providers in Berkshire County

2014 Year in Review.

2014 was a very successful year.

Guided by our Promise to Always Put Our Members First and our Vision to Make Quality Health Care Affordable, we advanced each of our strategic goals – to grow our business, maintain our financial stability, engage health care consumers, and be the partner of choice for employers and providers.


An independent study published in the New England Journal of Medicine (October 30, 2014) found that our Alternative Quality Contract (AQC) payment model has improved the quality of patient care and lowered costs.

The AQC, which includes 85 percent of the physicians and hospitals in the Blue Cross HMO network, fosters shared responsibility for improving care and moderating the unsustainable rate of increase in health care costs.

2.4% 3.1% 8.4% 10% 2009 2010 2011 2012 SAVINGS ON MEDICAL SPENDING
2007 2008 2009 2010 2011 2012 National Average Blue Cross MA POINTS ABOVE NATIONAL AVERAGE 12 IMPROVED HEALTH OUTCOMES
“Members who belonged to physician organizations that joined the AQC experienced slower growth in their health care spending… [and] greater increases in quality of care.”

– ZIRUI SONG, M.D., Ph.D., Harvard Medical School

  • NCQA Health Insurance Plan Rankings logo: Medicare Plan

    We have the top-ranked Medicare PPO plan in the U.S. for the second straight year.*

  • NCQA Health Insurance Plan Rankings logo: Private Plan

    Our commercial PPO and HMO are among the highest-rated in the U.S.*

  • US News and World Report 'Best Medicare Plans 2015: Medicare Advantage' logo

    A Top Rated Insurer in Massachusetts

  • US News and World Report 'Best Medicare Plans 2015: PartD' logo

    Highest Overall Rating in Massachusetts

  • Boston Business Journal Most Admired Company Recognition
  • Boston Business Journal Leaders in Diversity and Top Charitable Contributor Designations
  • Center for Plain Language Award for Our Multimedia Tutorial on Consumer Directed Health Care
  • Benchmark Portal Center of Excellence Certification for Our Retail Sales and Retention Team
  • Massachusetts ECO Awards Excellence in Commuter Options Leadership
  • METCO Leadership Pioneer Award for Support of Educational Opportunity
  • Color Magazine All-Inclusive Awards for Leadership and Supplier Diversity

* National Committee for Quality Assurance (NCQA) Health Insurance Plan Rankings 2014–2015. Overall, our Medicare Advantage PPO plan is ranked as the #15 Medicare Advantage plan in the U.S. and our Medicare Advantage HMO plan is ranked #19. (NCQA is not affiliated with CMS, nor is the award given by Medicare.) Our commercial PPO plan is ranked by NCQA as the #10 private plan in the U.S. and our commercial HMO plan is ranked #11.

10¢ heads 10¢ heads 10¢ heads 10¢ heads 10¢ heads 10¢ heads 10¢ heads 10¢ heads 10¢ heads 10¢ tails
90¢ Medical Care
for Our Members
  • 45¢ is used for hospital services
  • 30¢ is used for physician services
  • 15¢ is used for prescription drugs
10¢ Admin
  • Pay and benefits
  • IT investments
  • Facilities maintenance
  • Taxes and assessments
  • Contributions to reserves

2014 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.

2014 Combined Balance Sheets and Income Statements

2014 Audited Financial Reports

2014 Audited Financial Reports include Audited Statutory-Basis Financial Statements for Blue Cross and Blue Shield of Massachusetts, Inc. for the years ended December 31, 2014 and 2013 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, 2014 and 2013 with Report of Independent Registered Public Accounting Firm.

2014 Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc.

2014 Blue Cross and Blue Shield of Massachusetts, Inc.

Together We’re Building a Healthier Community

We believe all children and families throughout the Commonwealth deserve to thrive, learn, and lead as healthy and engaged citizens.

Investment: $6M in contributions to 500 Mass. Nonprofits
Engagement: 3,200 Associates, 30,000 hours donated, 284 projects. Value of volunteer hours: $1.1M
Sustainability: 400 tons recycled. 2% electricity reduction. 5,600 trees saved.
Foundation: 73 grants made totaling $3.5M. 27 grants from employee giving.

View Our Corporate Citizenship 2014 Report >

Together We’re Giving Everyone a Voice

We will not rest until every Blue Cross associate can say, “I see a reflection of myself at every level of the organization and I have a clear shot to be successful.”

Associate Engagement: 400 Associates turned out to support Gay Pride and other unifying causes
Internal Programs: 604 Associates participated in 7 diversity-related groups; 42% increase in 2014
Innovation: 800 leaders have completed diversity & inclusion leadership training
Strategic Partnerships: 50 partnerships and 150 events

View Our Diversity & Inclusion 2014 Report >

Board of Directors (as of December 31, 2014)

  • George R. Alcott, IIIVice President, Massachusetts AFL-CIO
  • Brian M. BarefootPresident Emeritus, Babson College
  • Andrew DreyfusPresident & CEO, Blue Cross Blue Shield of Massachusetts, Inc.
  • Helen G. DrinanPresident, Simmons College
  • Richard C. GarrisonPresident, Bink Inc.
  • Paul Guzzi, Vice ChairPresident & CEO, Greater Boston Chamber of Commerce
  • Philip W. JohnstonPresident, Philip W. Johnston Associates
  • Ralph C. Martin, IISenior Vice President & General Counsel, Northeastern University
  • Robert F. Meenan, M.D.Dean, Boston University School of Public Health
  • Paula A. PriceSenior Lecturer, Harvard Business School
  • Dorothy E. PuhyExecutive Vice President & COO, Dana-Farber Cancer Institute
  • Timothy M. SweeneyPresident, Liberty Mutual Personal Insurance
  • Paul F. TonerPresident, New Voice Strategies
  • Benaree P. WileyPrincipal, The Wiley Group
  • Phyllis R. Yale, ChairSenior Advisor, Bain & Company, Inc.

Leadership Team (as of December 31, 2014)

  • Andrew DreyfusPresident, Chief Executive Officer
  • Bruce BullenChief Operating Officer
  • Deborah DevauxSenior Vice President, Network and Service Integration, Interim Chief Strategy Officer
  • John A. Fallon, M.D.Senior Vice President, Chief Physician Executive
  • Stephanie Lovell, Esq.Senior Vice President, General Counsel
  • Allen MaltzExecutive Vice President, Chief Financial Officer
  • Jay McQuaideSenior Vice President, Communications & Corporate Citizenship
  • Jason RobartSenior Vice President, Chief Human Resources Officer
Together, We’re Making Quality Health Care Affordable.