Insurers in Minnesota spent nearly $19 billion in medical care in 2012, up 7 percent from 2011, while the average operating margin dropped to 0.57 percent, according to a report from the Minnesota Council of Health Plans (MCHP).
Enrollment in MCHP's seven member plans -- all of them nonprofits, some including Medicaid managed care plans -- grew by 2 percent between 2011 and 2012, to 4.4 million, covering about 80 percent of Minnesota's population.
At the same time, spending on hospital outpatient care, emergency care and hospitalizations all grew by about 10 percent, while spending on prescription drug and non-reusable medical supplies grew by 14 percent.
Spending on care provided by chiropractors, therapists, social workers and nurse practitioners grew by 15 percent, according to MCHP. Spending on substance abuse and mental health services in inpatient and outpatient settings also increased 15 percent, while spending on physician services rose 8 percent.
Areas of spending that declined between 2011 and 2012, according to MCHP, include durable medical goods (down 5 percent), care at skilled nursing facilities (down 8 percent) and at-home care directed by a physician (down 2 percent).
Overall, healthcare spending for the average member of MCHP health plans increased 5 percent between 2011 and 2012.
The increase in spending came along with a drop in average operating margins of about 1 percent -- down to 0.57 percent -- on revenues of $20.9 billion, while the seven nonprofit health plans contributed $252 million to their reserves (more than half from investment income), an increase of 1.2 percent from 2011..
The 0.57 percent average operating margin for 2012 brings the health plans in line with trends from the second half of the 2000s. After hovering between 0.4 percent and 0.8 percent between 2005 and 2009, the average margins hit highs of 1.52 percent and 1.8 percent in 2010 and 2011.
The 2012 average operating margin for health plans covering the 615,000 Minnesotans in Medicaid, meanwhile, was 1.4 percent, on revenue of $4.1 billion, down slightly from the 10 year average of 1.8 percent.
"Managed care continues to demonstrate excellent value that allows the state to predict its budget and provide excellent coverage," Julie Brunner, MCHP executive director, said in a media release. "Minnesota's nonprofit health plans continue to outperform plans from across the nation in service, quality and access to care."
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