CONTACT: Tara Murray
BOSTON — November 13, 2009 — 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 third quarter, statutory financial results today and is reporting a combined net income of $17.1 Million for the quarter. This total is comprised of a combined operating income of $8.1 Million and a combined investment income of $8.0 Million (see the attached fact sheet for details). For the first nine months of 2009, BCBSMA is reporting a combined net loss of $53.2 Million.
Allen Maltz, BCBSMA's Chief Financial Officer, said, "Though we earned a profit in the third quarter, 2009 has been a particularly challenging year due to a number of environmental factors. The economic downturn has impacted investment income, a rise in the utilization of medical care associated with the flu and elective procedures, and high claims costs associated with newly insured individuals have all played a role in our results to-date."
In relation to increased utilization of medical services, Maltz went on to explain that among other factors, the unusual extended flu season into spring, summer, and continuing through today has played a role with increased office visits, use of antibiotics and other prescriptions for flu-like symptoms, lab tests, and chest x-rays.
Blue Cross Blue Shield of Massachusetts continues its efforts to address costs while improving quality through working to eliminate waste in the health care delivery system. It is estimated that approximately 30 percent of medical services may be unnecessary and potentially harmful. BCBSMA believes the most effective way to improve quality and slow the rising cost of care is by changing the way we pay for care.
BCBSMA's Alternative Quality Contract (AQC) - a new contract with physicians and hospitals designed to improve the quality of care our members receive and reduce the rate of medical cost trend over time - continues to gain momentum with 20 percent of its HMO provider network currently partnering with BCBSMA under an AQC contract.
Additional measures taken by BCBSMA to impact costs include a series of steps to reduce administrative spending, including a freeze on salaries, as well as actions that will reduce cash compensation for the company's senior executives in 2009 by approximately 30-50 percent.
BCBSMA continues to be the leading private health insurer in Massachusetts, with 2,976,103 members as of September 30, 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.