MESSAGE FROM THE BOARD CHAIRMAN AND THE CEO

We’re committed to health care that’s simpler, more transparent, and based on keeping people well. As we reimagine better care for all, we are accelerating healthy.

Message from the Board Chairman and CEO

Innovating to improve health: It’s the powerful idea that drives our fearless efforts to reshape health care. Through outspoken leadership, forward-thinking investments, and proactive partnerships, we’re thinking differently, putting patients and their health first through a program we call Human-Centered InnovationSM. We’re committed to health care that’s simpler, more transparent, and based on helping people get well and stay well. As we reimagine better care for all, we are accelerating healthy.

Our vision has taken root and is growing strong. We’re harnessing information and technology to help real people solve real health problems — sometimes even before they occur. Our High-Touch HeartSM Program uses data analytics and machine-learning principles to predict which members with congestive heart failure are most at risk for being hospitalized. Then we collaborate with their physicians to monitor their condition at home, 24/7, through nurses on call and Bluetooth-enabled technology. At the first sign of trouble, the doctor’s orders may be initiated to keep our members safe and at home. We’re keeping costs down and our members healthy — that’s what our Human-Centered InnovationSM Program is all about.

It’s also about joining forces with best-in-class technology partners to make health care more accessible. To put the newest, most convenient health care tools directly into the hands of our members, we’re collaborating with like-minded innovators such as Relay Network, which fuels our personalized mobile communication tool, IBX Wire. And we’re also investing in cutting-edge startups such as Biomeme, which enables smartphones to perform gold-standard DNA analysis.

Our powerful partnerships are allowing us to bring state-of-the-art advances in care to our members. Through an exciting new collaboration with next-generation technology leader NantHealth, we are now the first health insurer in the nation to cover whole genome sequencing for our members with certain types of cancer.

We’re committed to radically improving the health care experience for doctors as well as patients. Consider Tandigm Health,
the company we founded with DaVita Healthcare Partners two years ago. Tandigm has developed a network of nearly 400 Philadelphia-area primary care physicians and provided tools, resources, and training to enhance their ability to deliver the finest possible care to their nearly 95,000 patients. Tandigm also motivates physicians to perform well by rewarding quality of care, not quantity. Tandigm has already demonstrated solid progress toward accelerating the impact of primary care on improving health outcomes and lowering costs.

powerful partnerships

And Human-Centered InnovationSM is also about inspiring people with fun ways to stay fit. Our long history of energizing our community to take healthy action now includes Philadelphia’s new bike-share program, Indego — a name that combines “Independence Blue Cross” with “Get up and go!” Since Indego’s launch last April, people in our community have taken more than 430,000 rides on Indego’s eye-catching blue bikes.

Our innovative thinking and bold action have resulted in a year of strong, consistent membership growth. We’re particularly proud of the ways we innovated to retain key business such as Comcast NBCUniversal. With this valued customer and partner, we’re looking to further our efforts on Connected Health: Ways to empower care and health information when and where people need it using the power of media and technology. And we’re investing with Comcast in Accolade, a forward-thinking innovation company that combines leading technologies, integrated clinical decision support, and customer service to simplify navigating the health care system, creating a superior experience for our members.

Our groundbreaking vision of health care innovation, collaboration, and partnership was recently recognized in Philadelphia magazine, which named Independence one of “Philly’s Coolest Companies 2015.” One of only 20 businesses chosen, we were lauded for our investments in promising health care startups, our outreach to Philadelphians, and our tuition-reimbursement benefit — dynamic innovations that put people first. This honor reflects the growing commitment of our more than 10,000 associates to innovating, collaborating, and partnering to fundamentally transform health care — a commitment to “accelerating healthy.”

Daniel J. Hilferty

Daniel J. Hilferty

President and
Chief Executive Officer

M. Walter D'Alessio

M. Walter D'Alessio

Chairman

National scope, innovative energy

Independence Health Group and its subsidiaries touch the lives of nearly 10 million people in 27 states and the District of Columbia, including 2.5 million in the Philadelphia region. Diversifying across products, capabilities, and geography, we serve everyone, from individual customers to local family businesses to large national corporations — all trusting in the power of Blue and the innovative energy of Independence.

  • Medical, administrative services, and specialty services
  • Medical and specialty services
  • Administrative and specialty services
  • Medical
  • Administrative service
  • Specialty service
  • As of December 2015

At a glance

OUR FINANCIAL PERFORMANCE 2015

Against a backdrop of enormous change in the health care industry, Independence remains a financially strong company, poised for growth and well-positioned for the future. Independence finished 2015 with growth in topline revenue and membership, but also experienced the financial challenges of an ever-evolving health care marketplace.

In 2015, Independence reported a record $13.8 billion in revenue, up $622 million (or 4.7 percent) over 2014. We also saw an increase of nearly 400,000 members from the previous year, bringing membership to nearly 10 million people in 27 states and the District of Columbia.

At the same time, 2015 was a challenging year for health insurers, and Independence incurred a net loss of $54.4 million. Contributing to this loss was a significant increase in health plan utilization among individual and Medicare members, and an increase in the amount spent on specialty and high-cost brand-name prescription drugs. In addition, we paid a total of $695 million in federal, state, and local nonpayroll taxes. For taxes and fees related to the Affordable Care Act alone, we paid $263 million — nearly 30 percent above what we paid in 2014.

Despite these headwinds, our financial foundation continues to be strong. Our average five-year margin is 1.2 percent, and we have seen year-over-year growth for revenue and membership since 2012. In addition, we ended 2015 with $2.7 billion in surplus, ensuring that we have the resources to pay claims and keep customers secure.

THE COMPANIES OF INDEPENDENCE HEALTH GROUP, INC.

Independence Health Group, Inc., through its subsidiaries delivers innovative health and wellness solutions in southeastern Pennsylvania and throughout the nation by offering a wide range of market-leading health plans and specialty services. Independence Health Group subsidiaries include:

  • M. Walter D’Alessio
    Chairman
  • Charles P. Pizzi
    Vice Chairman
  • Daniel J. Hilferty
    President and Chief Executive Officer
  • Robert W. Bogle
  • Debra L. Brady
  • Christopher D. Butler
  • Hon. Renée Cardwell-Hughes
  • Edward S. Cooper, M.D.
  • Edward Coryell
  • A. Bruce Crawley
  • Nicholas DeBenedictis
  • Valentino F. DiGiorgio III, Esq.
  • Patrick J. Eiding
  • Patrick D. Finley
  • Joseph A. Frick
  • Dr. Vail P. Garvin, FACHE
  • Patrick B. Gillespie
  • Nicholas A. Giordano
  • John Heenan
  • Anne F. Kelly King
  • Anthony LaRosa
  • Thomas A. Leonard, Esq.
  • Andrew L. Lewis IV
  • Hon. Michael D. Marino, Esq.
  • J. William Mills III
  • Alan Paul Novak, Esq.
  • Denis P. O’Brien
  • Thomas G. Paese, Esq.
  • Michael V. Puppio Jr., Esq.
  • Pedro A. Ramos. Esq.
  • William R. Sautter
  • James C. Schwartzman, Esq.
  • Robert W. Sorrell
  • Daniel L. Woodall Jr.
  • Daniel J. Hilferty*
    President and Chief Executive Officer
  • Yvette D. Bright*
    Executive Vice President and Chief Operating Officer
  • Anthony V. Coletta, M.D., MBA*
    Executive Vice President and President,
    Facilitated Health Networks,
    Independence; President and Chief
    Executive Officer, Tandigm Health
  • Alan Krigstein*
    Executive Vice President, Chief Financial Officer, and Treasurer
  • Richard J. Neeson*
    Executive Vice President and
    Chief Development and Innovation Officer
  • Paul A. Tufano, Esq.*
    Executive Vice President, Independence,
    and Chairman and Chief Executive Officer,
    AmeriHealth Caritas
  • Douglas L. Chaet
    Senior Vice President, Provider Networks and Value-Based Solutions
  • Stephen P. Fera
    Senior Vice President, Public Affairs
  • Kathryn A. Galarneau, F.S.A.
    Senior Vice President, Finance Operations, and Chief Actuary and Underwriting Officer
  • Regina Heffernan*
    Senior Vice President, General and Chief Human Resources Officer
  • Thomas A. Hutton, Esq.*
    Senior Vice President, General Counsel, and Corporate Secretary
  • John R. Janney Jr.
    Senior Vice President, Transformation
  • Daphne Klausner
    Senior Vice President, Senior Markets
  • Brian Lobley
    President, Commercial and Consumer Markets
  • Lauren C. O’Brien, CPA, CIA
    Senior Vice President and Chief Accounting Officer
  • Marcy F. Rost*
    Senior Vice President, Office of the President and CEO
  • Richard L. Snyder, M.D.
    Senior Vice President and Chief Medical Officer
  • Mike Sullivan
    President, Diversified Businesses
  • Paula Sunshine
    Senior Vice President and Chief Marketing Executive
  • Michael R. Vennera
    Senior Vice President and Chief Information Officer
  • Elizabeth A. Williams
    Senior Vice President and Chief Communications Officer
  • *The executive team of Independence Health Group, Inc.

As of April 1, 2016

Independence Health Group, Inc. is the parent company of Independence Blue Cross, LLC, and its subsidiaries and affiliates