BCBSRI reports $35M loss last year

BLUE CROSS & Blue Shield of Rhode Island announced yesterday that it experienced a $35 million loss in 2016.
BLUE CROSS & Blue Shield of Rhode Island announced yesterday that it experienced a $35 million loss in 2016.

PROVIDENCE – Blue Cross & Blue Shield of Rhode Island experienced a $35 million loss in 2016.

Citing information from its annual filing to the R.I. Department of Business Regulation, the insurer attributed the loss to increased use of medical services and identified its efforts to improve health care delivery, including investments in technology, patient-centered medical homes and data analysis, in addition to new insurance coverage solutions designed to lower premiums and overall costs.

After reporting a $50 million year-to-date loss in June 2016, BCBSRI implemented several cost-saving initiatives that achieved a $15 million gain for the second half of the year.

“Collectively, we have to create a path to affordable and simple health care in Rhode Island,” Kim Keck, BCBSRI president and CEO, said in a statement released Monday. “Health care costs in our state rank in the top 10 in the country. To achieve the ‘triple aim’ of better health, a simpler patient experience and lower costs, we must collaborate to accelerate the coordination of patient care, innovate lower cost solutions and enable better health care information.”

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While medical service costs remained stable, BCBSRI reported that its data showed a considerable increase in medical use, especially for hip and knee replacements, among other expensive procedures. Specialty drugs continue to be a cost driver, as they accounted for 35 percent of overall drug spending in 2016.

“The older we are the more we need health care services and Rhode Island ranks first in the nation for people aged 85 and older and eighth highest in median age. To address utilization issues, we need to shift our health care delivery system to embrace new models that support coordinated patient-centered care and outcomes-driven approaches,” BCBSRI Chief Financial Officer Mark Stewart said in the statement.

With its efforts around patient-centered medical homes bringing improved outcomes and lowered costs, BCBSRI reported that it aims to have 70 percent of eligible primary care providers entered into patient-centered medical home arrangements by 2018.

“Our experience is that we can improve quality and manage costs for our members by focusing on data-driven practices and contract incentives for care coordination,” Dr. Gus Manocchia, chief medical officer of BCBSRI, said in the statement. “We are committed to sustaining and growing this initial impact by expanding the number of physicians, hospitals and other providers who partner with us in this approach.”

As both Rhode Island’s median age and use of key health care services are higher than the national average, focusing on employee needs and use patterns can be important in driving members to high quality, affordable choices, BCBSRI reported.

For example, if an employer identifies high emergency room usage by an employee population due to poorly-managed or ignored chronic health conditions, that employer might consider working with BCBSRI to integrate a coordinated care plan that could address those employees’ chronic health conditions in a more cost-effective, yet highly accessible, manner.

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