CONTACT: Tara Murray
BOSTON February 26, 2010 Blue Cross and Blue Shield of Massachusetts, Inc. (BCBSMA) and Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc. (BCBSMA HMO Blue) announced its 2009 calendar year, statutory financial results today and is reporting a combined after-federal tax net loss of $149.2 million.
"Like most other businesses, Blue Cross Blue Shield of Massachusetts has been affected by the worst economic downturn since the Great Depression," said Allen Maltz, BCBSMA's Chief Financial Officer. Maltz said the company's 2009 results were the result of an adverse employment market which reduced membership; increased utilization of medical services due to the seasonal and H1N1 flu; a rise in elective procedures such as knee, hip and back surgeries, and in behavioral health utilization; as well as higher than anticipated costs associated with merging the individual and small group markets.
Maltz added, "Nearly two thirds of our net loss or approximately $95 million is due to our adoption of a more conservative view of existing accounting rules which caused us to write off certain investment assets with a current market value that is below the price we initially paid." Maltz said the decision was consistent with best practice accounting standards.
BCBSMA has already taken steps to improve its 2010 financial results. "Before the downturn even began," said Maltz, "we took action to reduce our administrative and medical costs which will help improve our financial position going forward." Maltz specifically pointed to initiatives underway to reduce medical costs by eliminating the overuse, underuse and misuse of health care services that don't improve patient care but do add unnecessary costs that drive up premiums. Maltz said he is concerned that future regulatory action by state government could negatively affect the company's 2010 results if premiums that reflect the cost of medical care are not approved.
BCBSMA continues to be the leading private health plan in Massachusetts, with 2,924,133 members as of December 31, 2009.
Blue Cross Blue Shield of Massachusetts ( http://www.bluecrossma.com ) was founded more than 70 years ago by a group of community-minded business leaders. Today, headquartered in Boston, BCBSMA provides coverage to more than 3 million members, 2.5 million in Massachusetts. BCBSMA believes in rewarding doctors and hospitals for delivering safe and effective care, and in empowering patients to take more responsibility, become educated health care consumers and become stronger partners with their doctors. Blue Cross Blue Shield of Massachusetts is an independent licensee of the Blue Cross Blue Shield Association.