Independence Health Group is proud to be in the vanguard of leaders who are building momentum for health care transformation in America. We have taken up that challenge on behalf of our members and the communities we serve.
Independence Health Group is proud to be in the vanguard of leaders who are building momentum for health care transformation in America. We have taken up that challenge on behalf of our members and the communities we serve. We are committed to giving them a voice in the health care debate, being a source of guidance in a rapidly changing market, and sparking innovation to create a sustainable system. We are committed to getting health care right.
The health care system must pay for outcomes, not volume. So we have made value-based models of care the foundation of our work with health systems. This past year we signed new long-term agreements with major partners, including Penn Medicine, based on our Facilitated Health Networks (FHN) model. FHN creates shared responsibility for care and costs, and supports data exchange and care coordination.
Consumers expect empowerment, transparency, and value when they access health care. So we are offering new tools that help our members make informed decisions about their care and well-being. We made major strides in 2017 when we launched our Achieve Well-being platform.
Our society must maintain a robust health care system if we are to meet critical public health challenges like opioid abuse. We work with health care professionals, members, and communities to spearhead the response to this crisis. Our medical policies seek to give our members access to addiction treatment when they need it, and minimize unnecessary opioids prescribed. And the Independence Blue Cross Foundation has made fighting the opioid epidemic its top priority.
Our corporate results reflect our commitment to improving health care. Businesses, consumers, and government continue to choose our coverage. Despite the reduced length and visibility of Open Enrollment in 2017 for the Federal Marketplaces in 2018, we surpassed expectations for both Independence Blue Cross in Pennsylvania — where we were once again the only insurer on the marketplace — and AmeriHealth New Jersey. Meanwhile, AmeriHealth Caritas is serving nearly 50,000 new Medicaid managed care enrollees in Delaware after winning a competitive contract from the state.
In 2018, we mark our company’s 80th year doing business. That milestone is a great opportunity to reflect on what Independence has always been: a trusted health care partner and engaged corporate citizen in our region. We also celebrate what we have become: a national leader and voice committed to transforming health care. And we reiterate our commitment to what we will be in the future: a consistent force for getting health care right.
Chief Executive Officer
We answer first and foremost to our members. And they have asked overwhelmingly for more information, enhanced service, and new tools to build a healthy lifestyle. To get health care right, we are engaging members in their care and empowering them to improve their own well-being.
Our members want to take action to improve their health. In 2017 Independence gave them a new way to do that: Achieve Well-being.
Achieve provides unique digital resources that help members create short, powerful action plans to improve their nutrition, physical activity, stress level, and sleep. Our platform is based on behavioral science: “bite-size” programs, games, rewards, and easy synchronization with activity trackers. Personalized planning results in stronger engagement and real behavior change, leading members on the journey to positive health outcomes.
We also launched “Get in the Game,” capitalizing on fans’ connection to the NBA’s Philadelphia 76ers, to introduce our members to Achieve Well-being. We created personalized content, including tips from 76ers players and medical staff, and offered high-profile rewards like tickets and signed merchandise.
Since Achieve Well-being launched in the first half of 2017, we have seen:
On the phone, online, or in person, Independence members rely on professional, responsive service. Nearly 500 associates are now meeting customer needs in a new state-of-the-art call center in the heart of our campus at 19th and Market Streets in Philadelphia. Last summer we reached a milestone, resolving a record 74 percent of customer concerns at first contact.
We also relaunched ibxpress.com in 2017 to offer quicker, easier access to the tools members use most, like coverage information, our physician finder, and claims review. And Independence LIVE, our customer and community health and well-being center on Market Street, was recognized by the Greater Philadelphia Alliance for Capital and Technologies with a Digital Innovation Enterprise Award.
We believe Independence offers the best Medicare coverage in the region, a belief reinforced when two of our Medicare Advantage plans — Personal Choice 65SM PPO and Keystone 65 HMO — received four-star ratings from the Centers for Medicare & Medicaid Services (CMS) for 2018. The CMS star ratings evaluate plans on measures such as access to care, member satisfaction, responsiveness, care quality, and customer service. This year our ratings showed improvements in member satisfaction, better care coordination, and increased health care quality. We remain focused on achieving five stars for both HMO and PPO plans.
Medicaid managed care programs help vulnerable and chronically ill people get care, stay well, and build healthy communities. More than 49,000 Delaware residents are now being served by our AmeriHealth Caritas subsidiary. In 2017, AmeriHealth Caritas pursued and won the contract that began January 1, 2018, becoming one of only two companies providing Medicaid managed care in Delaware. The program includes physical health, behavioral health, long-term services and supports (LTSS), and pharmacy services. The contract is for three years with optional extensions up to five years.
A healthy workplace is a top priority for our commercial customers and their employees. We help them proactively address the risk of cancer by supporting their pursuit of CEO Cancer Gold Standard accreditation. The Gold Standard was created by the CEO Roundtable on Cancer to recognize companies that reduce cancer risks for their employees, promote early detection, and connect employees to high-quality care. Independence has achieved the Gold Standard in our own workplace each year since 2009.
There is no turning back from the profound transformation underway in health care. The challenge — helping Americans be healthier while making our system sustainable — demands leadership. Independence is getting health care right by providing that leadership on behalf of our members, our customers, and the communities we serve.
We remain one of the strongest voices advocating a bipartisan solution to health care reform. That voice is heard in national media, in our local market, and by elected officials.
In July 2017, we launched the “Getting Health Care Right” campaign in Greater Philadelphia to educate the public about the changing system, and to underscore what needs to happen to make health care work for all Americans. The campaign included print, digital, and broadcast messages and a website educating visitors about the debate and the basics of health care insurance.
To reinforce our message, Independence leaders were active in national and regional media. CEO Dan Hilferty was interviewed by CNN, The Wall Street Journal, National Public Radio, and The New York Times, and Independence executives spoke frequently with Philadelphia-area outlets about how the uncertainty in Washington impacts rates in our community. Independence experts also spoke at a variety of conferences and symposia, highlighted by Hilferty’s keynote at “Next Steps in Health Reform” in Washington, broadcast live nationally on C-Span. Amplifying our voice in public reinforces the conversations we have with political and regulatory leaders.
What do Philadelphia-area companies that connect patients to clinical trials through the cloud, help improve medication adherence, and provide topnotch member services have in common? The ones described below received significant momentum from Independence, because of their innovative approaches to improving the quality, cost, and accessibility of health care.
VitalTrax, creator of a social media-like assessment tool for clinical trials, was the first recipient of seed funding under the $6 million digital investment initiative launched by Independence Health Group, Ben Franklin Technology Partners of Southeastern Pennsylvania, and Safeguard Scientifics.
TowerView Health’s medication adherence program has impacted Independence members with chronic illnesses and multiple prescriptions: Participating members were significantly more likely to take their medicines. TowerView Health is a graduate of DreamIt Health, the accelerator launched by Independence and Penn Medicine that welcomed its fifth cohort in 2017.
Independence also worked closely with Comcast, a major national customer, to pilot the use of Accoladeâ€™s Health Assistant service to help members navigate the complexities of health care.
More consumers than projected chose our individual plans for 2018, despite the well-publicized challenges surrounding open enrollment.
Independence Blue Cross again was the only insurer offering plans on the Federal Marketplace in southeastern Pennsylvania, and we enrolled more than 200,000 members including 32,000 new or returning. About 81,000 members have zero-dollar premiums because of subsidies under the Affordable Care Act. And we worked with partners to reach traditionally underinsured populations, including the Hispanic market.
AmeriHealth New Jersey enrolled more than 120,000 individual members — 55,000 of whom were new — and saw its highest-ever retention rate at 85 percent.
The impact of Independence in our markets leads to recognition for our companies and their leaders and associates. In 2017, CEO Dan Hilferty was included among Philadelphia Business Journal’s “Power 100,” a list of people with the most impact in shaping the future of the region, and Philadelphia Magazine’s “100 Most Influential Philadelphians.” And AmeriHealth New Jersey was ranked No. 9 on NJBIZ’s annual “Top 250 Privately Held Companies” list, up six places from last year.
The power of diversity helps Independence serve customers and fulfill our role as an economic engine. Our workforce of more than 10,000 is almost three quarters female and half multicultural. And we spent $76.5 million with diverse suppliers in the most recent year studied, activity that creates hundreds of jobs.
Independence executives are recognized for their diverse leadership perspectives. Juan Lopez, vice president of investments and treasury services, received the Hispanic Heritage Award from Latino newspaper Al Día, and The Philadelphia Tribune named Lorina Marshall-Blake, vice president of community affairs and president of the Independence Blue Cross Foundation, one of “Philadelphia’s Most Influential African Americans.”
Seven AmeriHealth Caritas Medicaid plans were recognized for Multicultural Health Care Excellence by the National Committee for Quality Assurance, highlighting our commitment to addressing health disparities that affect Americans of diverse racial and cultural backgrounds.
Providers are the cornerstone of health care. We are forging new models of collaboration with health systems, supporting independent practices, and giving doctors and health care professionals the data they need. Getting health care right means pursuing innovation so providers can give our members the right care at the right place and time.
We are spearheading a transformation of health care in Greater Philadelphia, alongside the outstanding health systems that anchor our region. Our Facilitated Health Networks (FHN) model is the foundation of new collaborations with providers, highlighted by our innovative agreement with the University of Pennsylvania Health System.
The FHN model goes beyond traditional contract negotiations, building in better care coordination, robust data exchange, and shared accountability for both quality and cost of care. The five-year agreement we signed with Penn Medicine in 2017 kicked off a new era of collaboration between Independence experts and Penn Medicine doctors and administrators. Our teams are now working together to design payment models that improve care and outcomes.
One example of this new thinking is a guarantee that Penn Medicine will be responsible for the cost if a member admitted to a hospital in their system is readmitted within 30 days, for any cause. We were able to make this groundbreaking move together because of new advances in coordinating services and monitoring patients immediately after they are discharged.
Our work with Penn Medicine is a model for health systems and insurers nationwide, and we are excited about the future of FHN.
Independence is helping doctors keep our members healthy with an approach called Clinical Care Transformation (CCT). The CCT team offers targeted clinical data and tools so physicians can improve health outcomes and provide more efficient care.
One goal of CCT is to help physicians better understand the cost implications of the treatment recommendations they make to patients, from referrals to prescriptions. For example, we give doctors a list of their most frequent referral sites for common procedures, coupled with comparisons for the cost of those procedures at other referral options. As a result, we’ve seen an increase in referrals to settings that manage costs better.
Our collaboration with providers extends beyond care for our members. Independence and leading health systems are innovating across the spectrum of health care, through initiatives like our Health Innovation Collaboration with Jefferson University.
In 2017, an Entrepreneurs-in-Residence program supported two teams of medical entrepreneurs working on critical health problems at Jefferson. One team explored advanced surgical treatment of complex epilepsy, and moved into coding its research during the year. A second team worked on bone graft and joint replacement infection and was going forward with animal trials.
Tandigm Health, our subsidiary that provides population health services for primary care physicians, made strong progress in its third year. The company achieved profitability, while improving outcomes and reducing utilization costs through coordinated care programs delivered in conjunction with 420-plus primary care physicians. Ninety-four percent of Medicare Advantage patients in the Tandigm model received a comprehensive in-person assessment by their physician. Those patients spent 11 percent fewer days in skilled nursing facilities and had 7 percent fewer unnecessary hospital admissions. Tandigm’s physician network continued improving on quality measures, with 57 percent of metrics now at the highest level for industry benchmarks, up 43 percent over 2016.
Healthy people live in healthy communities. We are committed to standing with the people and organizations who create those communities, and helping them tackle their biggest health problems. It takes everyone, working together, to get health care right.
Independence is committed to helping our nation battle the opioid abuse epidemic — the biggest health crisis in a generation. We are changing prescribing practices, getting our members the help they need, and leading community-based efforts to turn the tide.
We were one of the first insurers to restrict initial opioid prescriptions to five days, and we continued outreach to physicians who prescribe opioids outside of CDC guidelines. In the second half of 2017, we saw the number of members using opioids fall by 14 percent and prescriptions decrease by 16 percent.
Independence members have options to get the help they need to fight opioid abuse disorder, including no limit on the number of visits to detoxification facilities. We also expanded access to medication-assisted treatments, removing prior authorization restrictions on Vivitrol® and Suboxone® and a copay for methadone. The
Independence Blue Cross Foundation is squarely focused on the crisis, working with a broad range of partners. The Foundation is supporting a study of “warm hand-off” programs — connect ER patients to immediate recovery resources — with Bucks County’s BCARES initiative. Our team is also promoting medication disposal with Walgreens. And an anti-stigma project with Penn State University and the Pennsylvania Department of Drug and Alcohol Programs will create a public awareness campaign sharing stories of addiction and recovery, to reduce the stigma often associated with opioid abuse.
Medicare recipients count on our robust and popular Medicare Advantage plans. We also engage and educate seniors living in the areas we serve to promote health and well-being. This year’s Age Fearless seminar series at Independence LIVE included topics such as healthy aging, smart shopping, budgeting, end-of-life planning, and art and wellness. A half-day Age Fearless event at Moore College of Art & Design in Philadelphia featured lectures by college professors on the science of happiness, the future of health care, and the art of aging.
Our 10,000-plus associates are the strongest example of Independence’s culture of service to community. Blue Crew volunteers can be found donating their time and talent to 80-plus organizations — worthy causes like MANNA (supporting nutrition for people dealing with chronic illness) and Philadelphia Reads (helping children unlock the power of reading). Participation reached an all-time high in 2017, with nearly 1,400 volunteers donating more than 11,000 hours.
AmeriHealth Caritas celebrated the 15th anniversary of its award-winning Healthy Hoops program, which operates in eight states and provides health education, screenings, and basketball clinics. Healthy Hoops has helped more than 10,000 children learn to control asthma and their weight and prevent heart disease while having fun.
The Independence Blue Cross Foundation does more than fund grass-roots health programs — it serves as a hub for all types of organizations looking to drive positive community outcomes. In that spirit, the Foundation hosted a national conference called “Partnerships with Purpose”, which convened nonprofit, business, government, and academic leaders to discuss the challenges and opportunities of collaborating to increase social impact. About 400 attendees heard speakers from Independence, Comcast, UPS, the Urban Affairs Coalition, and many other organizations, including a keynote from Katherine Smith, executive director of the Center for Corporate Citizenship at Boston College’s Carroll School of Management.
Throughout our 80-year history, Independence has helped make Philadelphia a great place to live, work, and visit. Our #FearlessFit approach to healthy lifestyles brings people together around activities from skating to biking and beyond. One highlight is the Blue Cross® Broad Street Run, which we sponsored for the 21st year. The nation’s largest ten-mile race attracted 40,000 runners in 2017 and raised funds for the American Cancer Society. At an exposition before the Run, the Mobile CPR Project supported by the Independence Blue Cross Foundation conducted public CPR training sessions. At an exposition before the Run, the Mobile CPR Project supported by the Independence Blue Cross Foundation conducted public CPR training sessions.
In the 20th century, new technology revolutionized health care. The ability to save lives grew rapidly, but so did the costs borne by American families, sparking a new phenomenon: health insurance. In 1938, we began serving the people of Philadelphia, and our innovative spirit has remained constant.
Eighty years later, the vast potential of health care to improve our world remains balanced with concerns about access and costs. And Independence Health Group remains a transformative leader. We serve consumers, workers and their employers, the elderly and disabled. We partner with providers and innovators, support community leaders in health, and give our members a voice in the debate over health care’s future.
Our scope and impact have grown over the years. As health care challenges have been met, new ones have arisen. But our goal remains the same: to help our members get the right care at the right place and time.
1993: Independence invested in health risk assessment software and launched three innovative well-being programs.
Today: We offer Achieve Well-being, digital resources and tools that put members in control of their health and well-being and foster personalized plans.
1965: McCall’s magazine features our efforts to address the rising costs of health care.
Today: Our leaders are relied on by media from CNN to the New York Times, from MSNBC to the Wall Street Journal, to provide insight into the ongoing debate over health care.
1957: We partnered with Bell Telephone on a teletype communications system connecting us to network hospitals to approve benefits within hours of a member being admitted.
Today: Our Facilitated Health Networks model of provider collaboration is expanding data exchange capabilities so that electronic medical records and claims data can provide a 360-degree view of a patient.
1951: With American health care in the throes of a nursing shortage, Independence led a joint effort with regional partners to establish the Community Nursing Bureau.
Today: Nurses are a cornerstone of sustainable health care, and the Independence Blue Cross Foundation’s Nurses for Tomorrow has provided more than $5 million in scholarship grants to nursing schools and developed an internship program at community health centers.
Independence Health Group’s multi-year strategy of growth and diversification led to an increase in net income and a strong balance sheet for 2017, despite uncertainties in the marketplace.
We saw total revenue of $16.4 billion, even after a significant non-recurring receivable reserve. Our net income increased nearly 15 percent from $67 million in 2016 to $77 million in 2017, resulting in a margin of 0.5 percent that we can invest in new capabilities to serve our members and customers.
This performance reflects our commitment to value-based care, which helped us positively impact trends in claims and medical costs. We also improved our operating efficiency and continued to implement effective investment and risk-mitigation strategies.
Our 2017 success underscores the strength of the company as we continue into 2018.
We continue to put our customers and members at the center of all we do, and as a result we are able to focus our expenditures on keeping our members healthy. We spent about 86 cents of each premium dollar on our members’ health care in 2017, up from 84 cents in 2016. We used less than 9 cents to run our business, while using 4.3 cents to pay a total of $705 million in federal, state, and local nonpayroll taxes, including $289 million in gross receipts tax, $127 million in state premium taxes, and $2 million in ACA-related taxes and fees.
|Cash and investments||$4,351,782||$4,873,287|
|Premiums and other receivables||$1,636,021||$1,578,718|
|Intangibles and assets||$1,154,343||$1,139,400|
|Assets held for sale||—||$309,302|
|Liabilities held for sale||—||$236,749|
|Independence Health Group equity||$2,623,490||$2,449,488|
|Noncontrolling interest equity||$488,983||$431,905|
|Total liabilities and equity||$7,142,146||$7,900,707|
|Pre-tax net income||$242,149||$425,894|
|Income tax expense||($109,810)||($347,389)|
|Net income (loss)||$77,155||$66,839|
Independence Health Group, Inc. delivers innovative health and well-being solutions throughout the region and the nation. Through our subsidiaries, we offer a wide range of market-leading health plans and specialty services.
Our portfolio includes coverage for national businesses, large employer groups, small businesses, and individuals; portable benefits for when you travel or live abroad; Medicare supplemental and Medicare Advantage products; Medicaid; and specialty services such as vision and dental coverage.
In addition, our subsidiaries provide specialty services and products including third-party benefits administration and pharmacy benefits management services. Our national health business includes administration of self-funded groups, network access arrangements, claims processing, and other services on behalf of the 35 other independent Blue Cross and Blue Shield plans across the nation.
As of March 28, 2018
1 Independence Health Group, Inc., is the parent company of Independence Blue Cross, LLC, and its subsidiaries and affiliates.
2 The executive team of Independence Health Group, Inc.