Kaiser on Pace to Take the Membership Mantle from Regence in 2012

After facing more than a 600,000 membership deficit four years ago, Regence BlueCross BlueShield appears to be losing its commanding lead over Kaiser Permanente
The Lund Report

December 22, 2011 – Membership at Regence BlueCross BlueShield continued its freefall when the latest enrollment numbers were released by the Oregon Insurance Division.

On September 30, Regence came within less than 1,500 members from relinquishing its decade-long lead to Kaiser Permanente, and was the only health plan to lose members during the third quarter. Regence now has 475,002 members, following a drop of 1,292.

Four years ago, Regence had a commanding lead over its competitor, with 1.1 million members in December 2007, according to historical records filed with the Insurance Division.

When asked for a response about its declining membership, Scott Burton, public relations spokesman, refused to comment.  Regence also saw its net income fall by 59% to $28.9 million compared to last year.

LifeWise Health Plan, meanwhile, experienced a 10% growth in membership during the third quarter – the highest of any plan. With an enrollment of 57,393 members, the insurer has nearly reclaimed its total of 58,332 members when the year started.

Overall, Oregon’s seven domestic insurers grew by a half percent, bringing in 8,705 new members. However, these figures do not represent self-insured groups which are not required to file financial or enrollment information with the Insurance Division.

Meanwhile, Kaiser continued spending the highest percentage of its insurance premiums on medical expenses, known as the medical-loss ratio – 93.5%, while HealthNet ranked at the bottom for the second consecutive quarter at 79.5%.

When it came to the combined $177.3 million in prescription drug spending, Kaiser accounted for nearly one-third of the total expenditures -- $66.1 million, while Regence spent $12 million less despite having a similar membership.

There was $4.6 billion spent on hospital and medical expenses by commercial insurers, up 3.8 percent from last year. Lifewise spent 17% less, explained by enrollment losses and accumulated less net revenue, while PacificSource spent 10% more in the same span, as a result of its net gains.

Premium revenues totaled more than $5.2 billion, a 2.6% increase from last year, while PacificSource witnessed a 9.2%, increase – the largest of all seven insurers -- bringing in $476.7 million.

Lifewise suffered an 11.3% drop in revenues with a total of $128.8 million due to a decrease in enrollment numbers from the end of 2010 to the start of 2011, even though enrollment increased in each of the past three quarters.

Net investment gains decreased 8.8% through September, with Kaiser taking a 37.5% decrease compared to 2010. Kaiser, Regence and Providence experienced a combined loss of $19 million during the same time frame.

On the positive side, ODS Health Plan and LifeWise saw their investment portfolios increase by 159% and 154% respectively compared to September 2010. Those increases are especially significant because both insurers posted more than $1.5 million in investment losses during the same period last year.

Also, Providence paid approximately $53 million to Providence Health & Services to implement the Epic electronic medical records record system, and required Insurance Division approval for the transaction.

ODS witnessed a growth in net income by $7.1 million, representing a 128% increase. There are a number of factors responsible for this, according to Dave Evans, chief financial officer. “We have seen our net income improve due to our continued focus on innovation, medical management, and other cost-saving initiatives,” he explained. “In addition, we continue to see growth in our overall membership that allows us to leverage our administrative costs.”

Other than ODS, the other insurers saw their net income drop by a combined 17% - - $139 million.

FOR MORE INFORMATION

To learn more about the reports by Oregon insurers, click here http://insurance.oregon.gov/

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Comments

"When asked for a response about its declining membership, Scott Burton, public relations spokesman, refused to comment. Regence also saw its net income fall by 143% to $28.9 million compared to last year." Just curious, but having your income fall by over 100% if you're still in positive territory isn't possible, is it?

Anonymous, Thank you for reading The Lund Report, I appreciate your readership and your input. You are correct in pointing out the discrepancy. The data is accurate, but the correct percentage should read as 59 percent. I sincerely regret the error. Blair Thomas -- blair@thelundreport.org