Keeping you well: It's what drives us. It's why we're transforming health care, putting quality and affordability first, and rewarding doctors and hospitals for outstanding care. It's why we're unlocking the potential of Philadelphia to become a national magnet for health care innovation, drawing the best minds and brightest ideas to our region. And it's why we're shaping visionary partnerships with Blue plans and other dynamic health care leaders, combining expertise and resources to deliver fresh approaches to your healthy future.
Independence Blue Cross. Leading boldly for a healthier you.
When 40 million Americans have no access to health care, the quality of care is inconsistent, and the cost is skyrocketing, it's time for bold leadership to transform health care in our nation. At Independence Blue Cross, we're forging a new path to high-quality care — simpler, more personal, more affordable.
Serving nearly 7.5 million people in 24 states and the District of Columbia, we're leading boldly for a healthier you.
With the expertise we've developed serving this region for 75 years, our focus is on you — your family, your workplace, your community. That's why we are charting a clear course to become the best Blue health insurer in the United States — a recognized leader in transforming the delivery of health care — by shaping innovative collaborations and partnerships and offering market-leading commercial and Medicare health plans in our region and state-of-the-art Medicaid managed care nationwide.
Our commitment? To deliver what you truly need: encouragement to stay healthy, excellent care when you become ill, and a system that expertly coordinates the care you receive from hospitals, physicians, nurses, and other health care professionals — and rewards the safest, most effective care.
As our 2013 advertising campaign “Live Fearless” conveyed so memorably, you can rely on us. With the power of an Independence Blue Cross ID card that opens doors in all 50 states, we give you peace of mind so you can live your life to the fullest and count on having quality care when you need it. Knowing that we're behind you for whatever lies ahead, you can “Live Fearless.”
This was particularly important in 2013 with sweeping change in health care on the horizon — driven largely by the health care reform law, the Affordable Care Act. We are committed to implementing the law and to helping you understand reform and make the best health care decisions for your family and your employees. So we're going the extra mile to make our educational outreach more engaging and innovative — from digital platforms to social media to mobile devices.
Probably our favorite mobile device is our biggest: the Independence Express. The Express is an eye-catching, 50-foot tractor-trailer that brings a personalized learning experience right to you. Just imagine an Apple Store for health care reform — that's the Express. Inside it's fully web-enabled with laptops and tablets and staffed by health care reform experts. Some 5,000 people climbed aboard the Express and nearly 60,000 interacted with us at more than 200 community events — held at health clinics, festivals, sports venues, malls, zoos, and YMCAs.
Another cause of the recent major changes in health care is the realization that America must stop the dramatic increase in health care costs and find ways to offer consistently excellent, affordable care. We're leading that effort in our region. With unbridled energy and a deep curiosity about new ideas, we continue to pioneer new models of care that get you care better, faster, and at less cost.
For example, building on the accountable care model, our forward-thinking subsidiary AmeriHealth New Jersey has formed an unusual venture with Cooper University Health Care in southern New Jersey. Together they created new, co-branded health plans that will offer more affordable, higher-quality care to thousands of Cooper's patients.
To spearhead changes that will improve the health of the nation, we've also made collaborating with other Blue health insurers a top priority. Two years ago, we partnered with Michigan Blue Cross and Blue Shield to buy AmeriHealth Caritas, a leader in government-sponsored heath plans such as Medicaid and Medicare Special Needs Programs that provide access to health care for those most in need in communities nationwide. Today, this organization has expanded to 16 states and the District of Columbia and serves 5 million people.
One of these Blue ventures cares for our members no matter where in the world they work, travel, or study. Five years ago, we joined with other Blues to expand the services we offer by investing in Highway to Health, a global health insurance company headquartered in our region that provides GeoBlue coverage for Americans overseas. In 2013, the international health care company Bupa bought nearly half of Highway to Health, expanding opportunities for GeoBlue's growth by creating the world's largest network for international health insurance with more than 11,500 hospitals and 750,000 medical professionals in more than 190 countries.
We continue to unlock the potential of Philadelphia as a magnet for health care innovation, drawing the best minds and the brightest ideas to our region. With Penn Medicine, we created DreamIt Health, the first health care accelerator in Philadelphia. DreamIt is attracting promising health care startups from around the nation and the world to Philadelphia and jump-starting the development of their novel health care solutions.
Our passion for innovation extends to research, too. We're collaborating with premier research universities to find new ways to tackle pressing health issues such as the spread of chronic illnesses like diabetes. For example, some of our research will more accurately predict whether you are likely to get diabetes so your physician can help you take steps to avoid this dangerous chronic disease.
Amid dramatic changes in health care, we are pleased to report a year of financial stability. In 2013, we continued our strong financial performance, ending the year with total revenues of $11.1 billion and net income of $143 million, or 1.3 percent. This positive performance enables us to better serve our customers and prepare for the future.
We are proud of our role as a leader in our region in corporate social responsibility. Our two-year-old, $58 million Independence Blue Cross Foundation has become a force in combating childhood obesity, strengthening health care for the vulnerable, and strengthening the nursing workforce. To build the health of our community, we also invest tens of millions of dollars in innovative health and wellness initiatives. What's more, nearly 2,400 of our associates participated in more than 180 volunteer projects in 2013.
When we consider all that our company has accomplished in this remarkable year, we must thank our 8,568 associates for their dedication and for always putting our customers first. And we must salute our committed and talented partners — the physicians, nurses, and hospitals that bring you compassionate, expert healing; the brokers and consultants who guide your health care coverage decisions; and, most important, our customers, their employees, and their families, who for generations have trusted the security of Blue. You inspire us. We pledge to continue leading boldly for a healthier you.
Chief Executive Officer
Independence Blue Cross and its subsidiaries serve nearly 7.5 million people in 24 states and the District of Columbia — 4.2 million through our medical coverage and administrative services and 3.2 million through pharmacy, dental, and vision coverage and other specialty services.
For more than 75 years, Independence Blue Cross has boldly led the way in changing how health care is delivered. With our affiliates, we are committed to enhancing the health and wellness of the people we serve in southeastern Pennsylvania and across the nation.
We're leading the way with groundbreaking changes that can help keep you healthy. We've introduced new models of care that encourage physicians and hospitals to better coordinate your treatment and raise the quality while lowering costs. And we've pioneered fresh approaches that increase your satisfaction with your care and doctors' satisfaction with practicing medicine.
Health care that's personal, effective, and affordable … we know that's what you want. With that in mind, we're changing the way you experience health care.
We're leading payment innovation through our accountable care payment model, which rewards hospitals and physicians for lowering costs and improving the quality of care they deliver — and it's making a difference. Care is safer and more effective and affordable.
With a goal of transforming the delivery of health care in New Jersey, our subsidiaries AmeriHealth HMO, Inc., and AmeriHealth Insurance Company of New Jersey, which we call AmeriHealth New Jersey, have joined forces with Cooper University Health Care. As a result, Cooper is acquiring a 20 percent interest in the future earnings of AmeriHealth New Jersey. Together, these organizations have begun to collaborate on creating co-branded health plans designed specifically for individuals and small businesses in Camden, Gloucester, and Burlington counties. In addition, they have jointly designed a pay-for-performance model that aims to reward the delivery of high-quality and cost-effective care, encourage care coordination, and promote clinical integration of a hospital and its medical staff. A venture of this kind is unprecedented in New Jersey.
We're using our acclaimed accountable care organization payment model to reward health systems for keeping you well, and the results are clear: participating health systems are lowering their readmission rates as well as their medical and pharmacy costs.
We're also introducing accountable care in novel ways. In the first collaboration among a health insurer, a health system, and a health care technology firm in the Philadelphia area — and one of only a few in the nation — nationally recognized Lumeris is using its leading-edge accountable care technology to combine our data about physician visits, prescriptions, hospitalizations, and lab results with information from Abington Health's records. The result? A detailed 360-degree view of the care each patient is receiving at Abington and elsewhere. With this information, a team of physicians and care managers at Abington is providing improved coordination of quality care, lower overall health care costs, and increased patient and physician satisfaction.
Our Health Coaches are also transforming your care — in a very personal way. If you are facing a chronic illness or complex health challenge such as diabetes or cancer, our trained registered nurses are available to address your concerns and coordinate your care among doctors and hospitals. You can call your Health Coach whenever you have a question, and he or she will also call you periodically to check in with you about your health care needs. After your first contact, you will be able to speak with the same Health Coach, who will become a trusted adviser in navigating your health, from understanding your diagnosis to helping you make treatment decisions based on the latest information. In addition, we offer a Nurse Hotline, available 24/7. Whether you have a bee sting, flu symptoms, or something more serious, professional guidance is just a phone call away.
Our primary Health Coach service provides you with a single point of contact … you'll speak with the same registered nurse every time you call. It's our way of saving you time and ensuring that no detail of your health care is overlooked.
And there's more: If you need specialty care, the Blue Distinction Centers+ program can point you toward health care facilities nationwide that consistently provide the best quality, the most patient satisfaction, and value. If you need cardiac care, spine surgery, knee and hip replacements, and other specialty care, just choose a Blue Distinction Center+ and know that this designation means top quality, reliable safety, and value.
When you or someone you love needs heart care, knee replacement, or other specialty care, the Blue Distinction Centers recognition program can help you find a facility you can trust. Hospitals designated as Blue Distinction Centers and Blue Distinction Centers+ are proven to outperform their peers in areas that matter to you — quality and safety — and have fewer complications and readmissions. And, Blue Distinction Centers+ deliver care more efficiently, giving you top quality, safety, and value.
There are Blue Distinction Centers for bariatric surgery, cardiac care, complex and rare cancers, knee and hip replacement, spine surgery, and transplants. Find out more about Blue Distinction program.Source: "Blue Distinction Specialty Care: Sell Sheet,” Blue Cross and Blue Shield Association, 2013
In 2013, we made great strides in the transformation of your health care experience, but our commitment to driving change is not new. For more than six years, we've been one of the nation's leading supporters and innovators in the development of the patient-centered medical home, a team-oriented approach to primary care focused on your good health. This year, nearly 300 medical homes in our network serve 40 percent of our members. Our published studies have shown that patient-centered care, with its strong focus on preventive medicine, is helping chronically ill patients show significant improvements in important health markers and reducing health care costs. Most notably, diabetic members treated in a medical home practice had 21 percent lower total medical costs driven by a 44 percent reduction in hospital costs. In addition, total medical costs for high-risk members in medical homes fell 11 percent compared to those treated elsewhere.
By developing nationally respected and highly effective new models of care and motivating physicians and hospitals to improve the quality of care and lower costs for consumers, we're leading the way to your healthier future.
We're leading change that truly improves your health and enhances your life. So we asked: Why can't Philadelphia become the Silicon Valley of health care innovation?
After all, Philadelphia is the ideal environment for health care innovation. Our region is home to expert health care entrepreneurs, a thriving biosciences industry, an active investment community, nationally ranked medical schools, world-class research and academic institutions and health systems. We are committed to transforming Philadelphia into a national magnet for health care innovation — the optimal location to grow successful, progressive health care companies.
If you can dream it, we can help build it in Philadelphia: That's our message to promising health care entrepreneurs who are inventing fresh approaches to solving health care problems. DreamIt Health, our partnership with national health care leader Penn Medicine and entrepreneurial experts DreamIt Ventures, marks the first time a Philadelphia-based insurer and hospital system have collaborated to create a national health care accelerator. DreamIt Health selected ten extraordinary health care startups from a national field of applicants and provided mentorship from experienced health care leaders such as Independence Blue Cross, top-tier legal and accounting services, and $50,000 in seed money so they could set up shop right here in Philadelphia.
The results are fascinating, practical, and applicable. Consider Biomeme, a DreamIt Health startup whose app transforms your smartphone into a convenient, low-cost lab for quick DNA testing and on-site disease tracking. Or AirCare, which helps hospitals prevent readmissions and improve treatment results through tele-nursing, remote monitoring, and analytics. These are just two of ten young companies that, with our support, are developing and marketing technologies that keep people well. Thanks to DreamIt Health, more and more innovation will be born in Philadelphia to shape a healthier future for people across the nation and around the world.
Here's another example of our commitment to leading — and investing in — forward-thinking, life-changing ideas right here in Philadelphia. We've joined forces with Penn Medicine to discover novel ways to improve health for our members and our community. By leveraging our vast database of claims information with Penn Medicine's research expertise, we're identifying research opportunities and opening up brand-new fields of study related to health.
For example, we all know that a prescription medication works only when you remember to take it. We are working closely with Penn Medicine to address a grave problem: More than half of heart attack patients were not taking their medication, greatly increasing the chances they would suffer a second, more debilitating heart attack or even sudden death. What would encourage these patients to take their medicine? The answer: Vitality GlowCap, an unusual pill bottle that glows and plays music when it's time for the heart patient to take a pill, and even calls, texts, and emails you if you fail to take the medicine. It's practical and user-friendly, the kind of advance that can make a real difference in living a longer, healthier life.
With Penn Medicine, we're leading a study that addresses a very real problem: many patients don't take life-saving medication after a heart attack. Would more patients take their medicine if we gave them a noisy reminder? We're saving lives and improving health through Vitality GlowCap, an innovative medicine bottle that reminds patients to take their pills.
Imagine the promise of technology that uses real-time health care data to predict undiagnosed diabetes, which can be dangerous and expensive. What if primary care physicians could reach out and treat these at-risk patients before they develop the disease? That's exactly what we're researching in conjunction with New York University and NYU Langone Medical Center. As a founding member of NYU's effort to harness data for advances in medicine, science, and technology, we're funding three years of critical research into improving patient care and lowering costs for people who are at risk for developing diabetes — the most prevalent chronic illness in our region.
Attracting innovative health care startups to our region, helping people take much-needed medication, and exploring new approaches to preventing diabetes are just a few examples of the groundbreaking results we can get when we bring bright minds, resources, and bold leadership together to help keep you well.
Relax! We've developed a flexible portfolio of innovative, affordable health plans and services that offer you choice and security — and exceed your expectations. And we've gone the extra mile to help you understand what health care reform means to you or your business.
The Affordable Care Act introduced dozens of changes for individuals and employers, including requiring the uninsured to obtain health insurance in 2014. In 2013, a Kaiser Health Tracking poll showed that nearly half of all Americans felt they did not have enough information about the health care reform law to understand how it would impact their families. So in 2013, we worked closely with our business customers and their brokers and consultants to prepare. We launched a powerful, innovative educational outreach program that attracted national media attention. And to help consumers understand health care reform, we connected with thousands via phone, mail, and social media.
We rolled out the Independence Express, a state-of-the-art, Internet-enabled mobile education and retail health care experience installed in a tractor-trailer outfitted with computers, educational material, and meeting space and staffed by health care reform experts. Its mission: to travel throughout the region to help consumers become familiar with the changes that reform will bring in 2014 and feel comfortable choosing a health plan.
We wanted to make learning about reform easy, entertaining, and memorable, and to provide a supportive environment for learning about and shopping for health insurance. We invited visitors to the Independence Express to play the Independence IQ Game, to test their knowledge about the Affordable Care Act, and the Live Fearless Wheel of Life iPad game, where they could experience how real-life health care needs, such as a broken leg or sudden illness, relate to the cost of health care. In all, in 2013, more than 5,000 people climbed aboard the Independence Express during our visits to nearly 200 community events.
The Independence Express is an interactive, internet-enabled mobile learning experience designed to educate the public about health care reform and help consumers feel confident about choosing a health plan. The ADA-compliant tractor-trailer, which rolled out to the community in August 2013, includes the Independence IQ game show with a live game show host and participant prizes; the Live Fearless Wheel of Life game; and the Live Fearless photo experience, which gives participants a chance to be photographed flying high over Philadelphia or rowing a boat on the Schuylkill River.
To learn more about where the Independence Express stopped and why it gained national media attention, www.ibx4you.com/truck
We know you need a health plan that really works — for you, your family, or your employees. That's why in 2013 we created new products and services that consider budget, lifestyle, and health care needs, and introduced nearly 110 new health plans, all designed to reflect the requirements of the Affordable Care Act that took effect in 2014.
If you're purchasing insurance for yourself or your family, we've introduced two new tiered network health plans: Keystone HMO Gold Proactive and Keystone HMO Silver Proactive. Through these plans, primary care physicians and hospitals are placed into one of three tiers — standard, enhanced, and preferred — based on how they performed on cost and quality benchmarks. You'll have access to our entire network of health care professionals, but you'll pay the lowest out-of-pocket cost when you select a physician or hospital in the preferred tier. It's one way we're helping you get the best-quality health care without paying a high cost.
If you're an employer, we've made it easier for you to select a health plan for your employees. Blue Solutions® plans for small employers are now organized into platinum, gold, silver, and bronze categories based on the level of coverage they offer and the amount of your employees' out-of-pocket costs. Within each category is a broad range of Blue Solutions plans that vary based on coinsurance, copay, and deductible amounts, giving you more options. And, with Blue Solutions® Choice, you can define the contribution that you want to make toward the cost of your employees' health coverage, then allow them to select plans from a portfolio of options that you design.
Through our specialty product offerings and competitive pricing, our large local business continues to grow. Additionally, we are reaching far beyond southeastern Pennsylvania to offer our health plans to national employers headquartered in our region and with multiple worksites across the country.
To offer you protection against unforeseen events that can bring financial hardship, we've forged a relationship with the Guardian Life Insurance Company of America. Now we offer a wide range of specialty insurance products — life, disability, accident, critical illness, and cancer insurance.
For many of our new national clients, we're entering private health care exchanges with leading global consulting firms. New national employers headquartered in southeastern Pennsylvania with employees throughout the United States can take advantage of our low-cost, high-quality health plans through these private exchanges.
AmeriHealth Caritas, which we own in partnership with Michigan Blue Cross and Blue Shield, is a leader in government-funded programs that provide access to health care in needy communities across the country. One of the largest companies of its kind nationwide, AmeriHealth Caritas is helping financially pressured states lower Medicaid costs and take advantage of the Medicaid expansion through health care reform. The company brings access to health care to nearly 2 million people through Medicaid managed care plans and administrative services. Including pharmacy benefits management and behavioral health care, it touches 5 million lives in 16 states and the District of Columbia.
If you're a self-funded employer, you can now take advantage of Blue InsightSM, an online analytics tool that helps you better understand and manage your employees' health benefits. Blue Insight provides detailed, easy-to-understand summaries of how your employees are using their insurance plans — the frequency and nature of the claims they are reporting, as well as their participation in health improvement programs — and identifies the prevalence of chronic illnesses. Because these aggregate summaries never identify your employees, their information remains confidential. Understanding your employees' health needs can help you make important benefits decisions.
If you're over 65, you'll be interested to know that we introduced a new customer service model for our Medicare Advantage members called the Member Help Team. This new initiative provides a highly personalized customer service experience, ensuring our senior members the special attention they deserve. Each time you call us for information or support, you'll speak to a representative from the same small customer service group who is familiar with your history and who, in addition to answering your benefit questions, will look for additional ways for you to get the most from your health plan.
Our work in 2013 helped transform the way you experience health care, invested in innovation that will enhance your health and your future, and engaged you and your fellow consumers in a dialogue about health care while providing dynamic, flexible products for the way you live. As we continue to shape a healthier tomorrow, you, your family, and your employees will be the focus of all we do.
At Independence Blue Cross, we believe in leading boldly to improve the health and wellness of the people and communities we serve. To do that, we have continued to maintain our financial stability so we can invest in a healthier future for you.
In 2013, we continued our strong financial performance, ending the year with total revenue of $11.1 billion and net income of $143 million, or 1.3 percent.
Unlike publicly traded health insurers, we use our income to benefit our customers and our community, not shareholders. In 2013, we continued to invest substantially in keeping you well. For example, we introduced technology to lower costs, improve care, and make it easier to do business with us. We also responded to customers' needs for new products and services and continued to improve our high level of service, while controlling the cost of doing business. In addition, we supported initiatives that bolster our community's health.
In 2013, we also dedicated significant time and resources to implementing the sweeping changes introduced by the health care reform law, the Affordable Care Act. We launched powerful and highly engaging educational outreach to explain to employers and individuals the impact of the reform law, and carefully walked our customers and uninsured people through the wide range of options we offer.
As a result of these efforts to exceed our customers' expectations through innovative new products and services, we continued to grow our business. Overall, we increased our membership by 550,000, or 8 percent. We now serve nearly 7.5 million people throughout the United States.
In 2013, we added to our surplus — the funds set aside to pay unexpected claims. A solid surplus is a crucial measure of an insurance company's financial stability. Our 2013 surplus was $2.7 billion. This level falls in the “sufficient” range, as defined by the Pennsylvania Insurance Department, and ensures that we have resources to pay claims and keep our customers secure.
We are committed to continuing to maintain our financial health as we innovate, invest, and expand — leading boldly for a healthier you.
December 31, 2013, and December 31, 2012 ($ in thousands)
|Cash and investments||$3,663,406||$3,550,839|
|Premiums and other receivables||1,407,885||1,387,842|
|Intangibles and other assets||851,079||809,387|
|Independence Blue Cross surplus||2,533,219||2,346,167|
|Noncontrolling interest surplus||201,504||169,528|
|Total liabilities and surplus||$5,922,370||$5,748,068|
We spent 84.7 cents of each premium dollar to pay for our customers' health care in 2013. We used 11.6 cents to run our business and invest for the future. We used 2.4 cents to pay taxes — a total of $268 million in federal, state, and local nonpayroll taxes, including $164.2 million in gross receipts tax and $35.2 million in state premium taxes. We had a 1.3-cent margin, which we used to strengthen our financial foundation.
December 31, 2013, and December 31, 2012 ($ in thousands)
|Operating income (loss)||$253,293||$402,604|
|Other income (expense)||(232,940)||(201,706)|
|Pretax net income (loss)||$236,643||$324,462|
|Income tax benefit (expense)||(83,861)||(116,964)|
|Net income (loss)||$142,635||$191,529|
Independence Blue Cross and its affiliated companies deliver innovative health and wellness solutions — in southeastern Pennsylvania and throughout the nation — by offering a wide range of market-leading health plans and health specialty services.
QCC Insurance Company, a wholly owned subsidiary, offers quality, cost-effective preferred provider plans — including Personal Choice® PPO and Personal Choice 65SM PPO — and a Medicare Part D Plan called Select Option® PDP.
Keystone Health Plan East, a health maintenance organization and a wholly owned subsidiary, offers a flexible suite of products that includes Keystone Health Plan East HMO, Keystone Point of Service, and Keystone 65.
Independence Administrators, a third-party administrator and a wholly owned subsidiary, serves self-funded health plans in the five-county southeastern Pennsylvania region for groups of 100 or more employees. The company offers tailored, cost-effective benefits management services, including claims payment, health management, and consumer-directed health plan options.
AmeriHealth health insurance companies provide HMO, POS, PPO, traditional coverage, and AmeriHealth 65® products in Pennsylvania (outside the five-county southeastern region) and New Jersey.
AmeriHealth Administrators, a national third-party administrator and a wholly owned subsidiary, serves self-funded health plans outside the five-county southeastern Pennsylvania region for groups of 100 or more employees. The company provides comprehensive benefits management services, such as claims payment, health management, and consumer-directed health plan options.
AmeriHealth Casualty Services,a wholly owned insurance agency, offers workers' compensation insurance, life and disability insurance, third-party claims administration, and integrated disability management in Pennsylvania, New Jersey, Delaware, and Maryland.
AmeriHealth Caritas, owned by Independence Blue Cross (majority shareholder) and Blue Cross Blue Shield of Michigan (minority shareholder), is an experienced leader in government-funded health insurance programs. The company brings access to health care to nearly 2 million people through Medicaid managed care plans and administrative services. Including pharmacy benefits management and behavioral health care, AmeriHealth Caritas touches 5 million lives in 16 states and the District of Columbia.
CompServices, Inc., a wholly owned subsidiary, offers administrative services for self-insured workers' compensation programs, such as case management and claims administration. The company operates in Pennsylvania, New Jersey, and Delaware.
NaviNet, Inc., owned by Independence Blue Cross; Highmark Inc.; Horizon Blue Cross Blue Shield of New Jersey; and Lumeris, Inc., speeds and simplifies more than 50 kinds of administrative, financial, and clinical transactions among three-quarters of America's physicians, 3,800 hospitals, and dozens of the nation's largest health insurers. The company also offers software and guidance to support hospitals shifting to accountable, value-based health care.
Independence Blue Cross offers products directly, through its subsidiaries Keystone Health Plan East and QCC Insurance Company, and with Highmark Blue Shield — independent licensees of the Blue Cross and Blue Shield Association.
Highmark Inc., Horizon Blue Cross Blue Shield of New Jersey, and Blue Cross Blue Shield of Michigan, with which Independence Blue Cross has vendor relations and business partnerships, are independent licensees of the Blue Cross and Blue Shield Association.