WARWICK – Blue Cross & Blue Shield of Rhode Island reported net income of $22.6 million in 2017, significantly better than the previous year’s $34.4 million loss, thanks in part to a one-time $10.7 million realized capital gain as a result of moving assets from one investment to another due to changing custodial banks. Total revenue for the year was almost flat at $1.7 billion.
The realized gain doesn’t carry over into 2018, the nonprofit said in a statement. The gain, first reported in the middle of 2017, was not a result of the recent tax reform bill, said Jill Flaxington, public relations specialist at Blue Cross & Blue Shield of Rhode Island.
BCBSRI also attributed the profit to a number of positive developments, including members requiring fewer inpatient hospital stays, fewer expensive procedures such as joint replacements and better access to prenatal care resulting in fewer babies needing expensive neonatal care.
Flaxington said BCBSRI’s gain/loss before Affordable Care Act fees and taxes is $11.9 million. However, she said, BCBSRI excludes the premium deficiency reserve, $2.1 million in this case, from its operating margin calculation. Adding that to the $11.9 million gain/loss is $14 million, which is divided by premium revenue of $1.7 billion for a 0.8 percent operating margin.
Hospital and medical expenses declined $4.5 million in 2017 to $1.5 billion from the previous year. Net cash from operations increased by 215.2 percent year over year to $72.6 million, and net admitted assets rose $8.8 million, or 1.5 percent, to $627.2 million year over year in 2017.
“In keeping with our mission and commitment to our local communities, we enhanced programs and initiatives to improve our members’ experience and continue to work toward providing access to affordable, high-quality care. From our newest Your Blue Store in East Providence to improvements in telemedicine and technology, we’re focused on meeting our members where they are and helping them to be engaged health care consumers,” the nonprofit said in a statement.
Rob Borkowski is a PBN staff writer. Email him at Borkowski@PBN.com.
