Attempts to keep premiums down and investments in technology last year dug into the bottom line for the Capital Region’s leading nonprofit health insurers, who mostly saw their annual incomes shrink despite increases in revenue.
The Capital District Physicians’ Health Plan ended 2007 with a greater income but fewer members. MVP Health Care and HealthNow, the parent of BlueShield of Northeastern New York, posted opposite outcomes Monday and Tuesday.
CDPHP last year saw its net income rise 12 percent to $35.4 million, compared with 2006. Revenues crossed the billion-dollar-mark, climbing 7.3 percent to $1.07 billion. Despite those gains, the Albany insurer lost 1,453 members, or less than 1 percent, ending the year with a membership of 406,481.
“This strong financial footing also allows us to make infrastructure investments that will strengthen our health plan as we continue to provide affordable health care,” CDPHP President and Chief Executive Officer William Cromie said. Cromie last week announced his plans to resign after heading CDPHP for almost seven years.
After a fall enrollment period rally that netted 40,000 members, MVP in Schenectady had 700,000 members as of last month. But over the year, its membership rose only by 25,000, or 3.6 percent.
MVP’s new members did not immediately drive up revenues or income. Over the year, income plunged 21 percent to $63.2 million and revenues fell 6.8 percent to $2.03 billion.
By far, MVP was the region’s winner during the important fall enrollment period. HealthNow and CDPHP each picked up only about 4,000 members during that period. The Schenectady insurer’s results include the performance of Preferred Care, the Rochester health plan that merged with MVP in 2006.
MVP attributed its 2007 gains to a broader Medicare coverage area and a series on new partnerships Preferred help it forge. Those partnerships included Eastman Kodak in Rochester, Cigna HealthCare in Bloomfield, Conn., and General Electric Co. in Schenectady. MVP President and CEO David Oliker said those initiatives are “producing the positive results that we anticipated.”
MVP spokesman Gary Hughes explained the insurers’ smaller income on greater revenues, saying MVP incurred additional costs by expanding its Medicare Advantage program into several upstate counties and investing in new technology. He also said the insurer tried to keep premiums as low as possible, further narrowing income margins.
HealthNow in Buffalo picked up 40,000 new members over the year, totaling 815,000. Despite that 5.2 percent membership uptick, the insurer’s income tumbled 32.7 percent to $48.4 million. Revenues rose 1.4 percent to $2.14 billion.
As with MVP, technology investments and attempts to keep premiums low weighed down HealthNow’s 2007 income. The company has restructured its primary business operations in Buffalo and it is now carrying out that work at BlueShield’s headquarters in Latham, said HealthNow spokeswoman Karen Merkell-Liberatore.
“People are demanding more from our company. By listening and responding, we’re working more effectively and increasing our competitive edge. The customer-centric thinking benefits members and is reflected in our financial performance,” HealthNow President and CEO Alphonso O’Niel-White said in a statement.