Independence Blue Cross (IBC) has rebounded, coming back from two years of financial losses by attracting new customers, partnering with like-minded organizations and expanding offerings.
The Philadelphia-based insurer reported Tuesday that its total 2011 revenues were $9.2 billion and its net income was $314.8 million, a 49 percent increase from 2010. IBC's 3.4 percent profit margin was its largest in at least 10 years. That's in contrast to IBC's financial results a few years earlier, when it reported a net loss of $78.7 million in 2008 and $124 million in 2009.
"I'm proud of the progress we've made," IBC CEO Daniel Hilferty said Tuesday during a conference call with reporters. One key achievement for the company was its recruitment of 45,000 new members last year, which Hilferty attributed to "smart business decisions."
IBC was able to make such a transformation by focusing on three critical areas: expanding its health plan offerings, investing in technology and maintaining financial stability. "We knew going into 2011 that it was imperative that the company maintain financial stability," IBC Executive Vice President and CFO Alan Krigstein said during the call.
First, IBC expanded its core insurance business with innovative products and services, such as new individual plans with high deductible copay and spending account options and new small group plans with rates 30 percent lower than 2010, Krigstein said. Plus, IBC will begin providing health plans for Medicaid members after it jointly acquired AmeriHealth Mercy with Blue Cross Blue Shield of Michigan.
IBC also has invested in technology to establish more modern and efficient operations within the company. For example, Krigstein said, IBC optimized processes to increase first call resolution by 20 percent and reached a vendor agreement to use Highmark's operating platform. Additionally, the insurer has opened more patient-centered medical homes and enhanced its performance-based payment model.
The third primary focus for IBC has been managing its business with fiscal discipline. "Maintaining financial stability allows us to continue serving our customers through difficult financial times," Krigstein said.