Greater Philadelphia's largest insurer ended 2014 with a healthy margin, if one lower than a year before, and a portfolio full of new products and ventures.
Independence Health Group, the parent organization of Independence Blue Cross, had a "solid" financial performance in 2014, bringing in revenue of $13.2 billion and net income of $69 million, a margin of half of one percent.
The Independence Health Group is a nonprofit holding company that includes the IBC insurance business and subsidiaries like AmeriHealth and the Tandigm Health joint-venture. The Independence company as a whole saw "significant membership gains" of nearly 30 percent in 2014, along with revenue growth of 20 percent.
While revenue and membership grew, Independence's net income was down by more than half from 2013, when it earned $143 million, a margin of 1.3 percent--a drop largely driven by some $200 million that went to new taxes and fees related to the Affordable Care Act.
Despite that, the company is at once growing and diversified, and able to weather the financial storms of health reform while trying to bring consumers new value propositions and more choices, said president and CEO Daniel Hilferty.
"Our continued solid financial results allow us to create and invest in innovative products and services that enhance the healthcare experience and help our members improve their health," said Hilferty, who's now in his fifth year as CEO. "We are more than a health insurer; we're an innovator that's keeping our members at the center of everything we do as we work to increase the quality and lower the cost of healthcare."
Independence and its AmeriHealth subsidiary count some 10 million people in 25 states as customers, including 2.5 million in greater Philadelphia, where IBC is the largest insurer, competing against the likes of Aetna and Cigna and an up-and-coming provider-sponsored managed care plan.
Last year, Independence added more than 2 million new members, largely from Medicaid, national business, and its government-market pharmacy benefits plans. The company also enrolled 285,000 new members in Pennsylvania and New Jersey, and serves about 31,000 employers with group and self-funded health plans.
Independence Health Group, in its first year as a holding company with a mutual insurer, maintained a $2.7 billion surplus, well within the "sufficient" range set by the Pennsylvania Insurance Department.
"By modernizing our processes to increase efficiency and add new capabilities, and managing with continued fiscal discipline, we are keeping the company moving forward and building on solid financial footing," said Alan Krigstein, Independence's chief financial officer and treasurer. "We use our margin to enhance our business, support good health, and preserve our financial foundation."
To keep growing and evolving, Independence is counting on various ventures, among them new collaborations with physicians, the information services firm NaviNet and Tandigm Health, a company jointly-owned with the for-profit dialysis giant Davita HealthCare Partners.
Tandigm in particular represents a bid to recreate the narrow network health plan while optimizing primary care and value-based provider contracting. In a model similar to the patient-centered medical home, Independence Blue Cross gives a percentage of insurance premiums to Tandigm, which pays and works with primary care practices to oversee groups of members, focusing on prevention and wellness in at-risk populations. Tandigm recently brought in its first hospital partner, Holy Redeemer Health System, which has an acute care hospital, a home health service and an affiliated physician network of 75 docs.
In addition to leading enrollment regionally in the public ACA exchange, IBC also launched a new private insurance exchange selling health, pharmacy, dental, and vision plans to employers with more than 100 employees. The insurer is also a major leader of a regional health information exchange that's trying to coordinate digital health information sharing efforts across dozens of hospital and medical group sites.
In the healthcare entrepreneurship space, IBC's Center for Health Care Innovation is helping nurture new startup companies, in partnership called DreamIt Health with the University of Pennsylvania Health System.. Designed as a sort of accelerator, the program offers both funding and "political capital" to startups like NarrativeDx, Tissue Analytics and TrueClaim, the latter a company aiming to help consumers save money on medical bills.
Independence is also touting the work of its $64 million Independence Blue Cross Foundation, sponsoring a range of community initiatives in areas like childhood obesity and healthcare workforce development, and ensuring that the IBC brand is major presence in the public square, funding an annual ice rink in the winter and Philadelphia's new bike share program, called Indego.