Our focus on inspiring breakthroughs for our members made 2018 a very successful year for Independence.
Home is better than the hospital. Your health care journey is better with a good guide. A challenge can be better met by working together.
These are the simple ideas that inspire Independence Health Group. They helped us make 2018 a year of breakthroughs, fueled by the power of collaboration. We work with clinical, research, and technology leaders to transform how care is delivered, one person at a time.
In 2018 we celebrated our 80th year serving the community. A lot has changed in health care in those eight decades. But the goal of our work at Independence remains consistent: to ensure that our members can get — and afford — the care they need, when and where they need it.
Thanks to a slate of innovations we undertook with Penn Medicine, our members who have been discharged from Penn hospitals are being readmitted 25 percent less often than before. This achievement resulted from sharing data, sharing ideas for better care, and sharing responsibility for outcomes.
Built on the complementary strengths of Comcast and Independence, a new company called Quil is moving the patient experience into the digital age. The Quil platform will offer consumers a personalized “roadmap” through common health care procedures, available wherever the patient goes.
Though the opioid epidemic continues to impact lives, Independence’s work with doctors, members, and community partners has promoted prescribing habits that reduce addiction, and treatment that overcomes it. The results include 45,000 fewer Independence Blue Cross members using opioids than four years ago.
Our focus on inspiring breakthroughs for our members made 2018 a very successful year for Independence. We are proud to help transform care, proud to lead innovation, and proud to stand up for those we serve.
None of this would have been possible without the leadership of M. Walter D’Alessio, who after 13 years as chairman of our board became chairman emeritus in July 2018. We are dedicated to carrying forward the legacy of commitment and service Walt established at Independence.
Daniel J. Hilferty | Chief Executive Officer
Charles P. Pizzi | Chairman
Potential has become proof. Together, Independence Blue Cross and the University of Pennsylvania Health System reduced hospital readmission rates for our members by more than 25 percent in a single year. Typical hospital interventions cut readmissions by just one percent annually (per a 2016 study from the College of William and Mary).
When Penn Medicine became the first health system to sign a contract under the principles of our Facilitated Health Networks model — sharing responsibility for outcomes, exchanging data, and collaborating to transform care — they agreed to pay for the cost of Independence Blue Cross members readmitted to a Penn Medicine hospital within 30 days of discharge. Penn Medicine clinicians and Independence experts went to work on programs to streamline care, from emergency departments and inpatient units to outpatient clinics and home care.
We focused first on expanding access to outpatient follow-up care because 40 percent of readmissions occur within seven days. Penn Medicine began ensuring that patients at elevated risk of readmission hear from a scheduler to set up follow-up appointments. And most patients now are discharged with their prescriptions filled, to avoid delays in beginning their drug regimens at home.
Other efforts aimed at specific high-risk populations, such as heart failure and oncology patients, included:
Health care reform helped more Americans access care and coverage than ever before. But there is still work to be done to embrace those left out, and to make sure the system works for future generations. We remain committed to that effort, and to collaboration between the public and private sectors.
The Independence Blue Cross “Getting Health Care Right” campaign offered a message of hope and a call to action in its second year. In national and local advertising, we urged a meeting of the minds among all health care stakeholders — insurers, health systems, consumers, physicians, pharmaceutical companies, device manufacturers, and public health and elected officials. And Independence leaders continue to work closely with government officials and industry colleagues to address issues ranging from expanding health care coverage to the misuse and abuse of opioids.
Because Registered Nurse Health Coaches are critical for helping our members stay healthy, Independence Blue Cross transformed our data tools to give them a more timely, comprehensive, integrated view of each member. The Clinical Nurse Dashboard that debuted in 2018 includes information like demographics, disease conditions, ER visits, diagnostic imaging, and gaps in care. It also adds daily updates from HSX, our region’s health information exchange, as well as our pharmacy management system.
AmeriHealth Caritas is in 16 states, and its revenue and workforce have doubled in five years.
We are better integrating pharmacy and medical services to transform how we provide these critical benefits. A renewed focus on pharmacy and a deeper collaboration with our third-party pharmacy benefits manager have helped Independence better manage use and costs while improving service. The value of this approach — including an integrated service team and robust analytics that combine medical and pharmacy data — is apparent to customers like Steamfitters Local 420, which moved 8,000 members to our pharmacy platform. And the model is having an impact across AmeriHealth New Jersey, AmeriHealth Administrators, and Independence Blue Cross commercial and Medicare business.
Tandigm Health continues to drive transformation of independent primary care practices to a value- and population health-based model of care. Founded in 2014, Tandigm partners with more than 400 area primary care physicians and 900 specialists in delivering quality, coordinated care, leading to 4,200 fewer hospital admissions and 45,000 fewer days in skilled nursing facilities. Tandigm also operates a high-risk medical group that cares for Independence Blue Cross members with complex and chronic conditions, at home and in nursing facilities.
AmeriHealth Administrators continued its transformation in 2018, with contracts from a subsidiary of Blue Cross Blue Shield Minnesota to serve 30,000 new members from employers, unions, and Tribal businesses that self-fund their health care in seven northern and northwestern states. We are especially pleased to acquire the Tribal business, an important population that we have not served previously.
AmeriHealth Caritas has expanded its cutting-edge Medicaid managed care plans and solutions to 16 states, and its revenue and workforce have doubled in the past five years as a result of this success. This year we announced plans to expand the AmeriHealth Caritas corporate headquarters into two vibrant campuses: a new facility for 2,000 employees to open in 2021 in Newtown Square, Pa., and the subsequent renovation of its Essington, Pa., location to serve 2,000 more employees.
Our remarkable results in reducing hospital readmissions with Penn Medicine prove that transformation can happen, and it can change lives for the better.
We laid the groundwork for more improvements in quality and cost this year, signing new five-year agreements with leading independent and community-based physician groups — vitally important components of our care delivery network not affiliated with any health system — that complement our work with academic and community systems. Rothman Orthopaedic Institute became the first large independent physician group to join our Facilitated Health Networks model and pursue better outcomes and value for our members. Contracts with Cardiology Consultants of Philadelphia and Premier Orthopaedics show our commitment to physician-driven organizations that care for our members in the most appropriate, high-quality, cost-effective settings.
Imagine the potential of two national leaders — a proven health innovator and a peerless media and technology pioneer — joining forces to move the patient experience into the digital age. That’s what Quil represents.
Quil Health is the new Independence joint venture with Comcast NBCUniversal, launched in 2018 to offer patients a better way to navigate their health care journey. Quil’s platform will let patients access personalized content and information and communicate with their providers and even their families, at home or on-the-go.
Quil is the fruit of longstanding collaboration between Independence and Comcast, two iconic Philadelphia companies. Comcast’s expertise in reaching consumers and creating informational content is the perfect complement to our strengths in managing risk, coordinating care, and understanding the member or patient perspective.
The Quil Health platform will be accessible nationally, across multiple distribution channels and devices. Starting with orthopedics, Quil is personalizing treatment protocols for major health challenges by delivering related content to patients through mobile phones, tablets, laptops, and TV. The key is to get critical information to patients when and where they need it.
The Quil team includes more than 40 developers in Philadelphia and New York and is planning its growth in markets outside of Philadelphia in 2019.
Our overarching goal is to help our members lead the healthy lives they deserve. For members in Medicaid managed care plans, this should include helping them stay out of nursing homes, overcome the challenges of intellectual or developmental disabilities, and access the resources that keep people healthy — all goals of the AmeriHealth Caritas Next Generation Model of Care.
Introduced in 2018, the Next Generation Model of Care applies population health principles and puts members and caregivers at the center of care. AmeriHealth Caritas focuses not only on members’ physical and behavioral health and pharmacy needs, but on all factors associated with health, including the need for suitable housing and access to fresh food, transportation, and job training.
New breakthroughs in how we support providers are helping our members get the right care, at the right place and time. More robust data reporting by the Independence Clinical Care Transformation team now offers providers a clearer picture of our members, including:
We offered our members and their care providers a breakthrough in choosing the right medications at the most reasonable cost. Providers in our Independence Blue Cross network can now use PreCheck MyScript to see in real time what a member will pay for a medication and what lower-cost alternatives may be available. PreCheck MyScript is embedded in electronic medical records platforms and lets providers obtain prior authorization on the spot if needed.
Independence data gives providers a clearer picture of our members, including whether they’ve seen a doctor in 12 months.
Behavioral health care is as important to our members as physical care, and a breakthrough in online and mobile tools has made it easier for them to access critical services. On to Better Health offers free and confidential self-help tools from Magellan Behavioral Health to increase early screening and treatment for common conditions — from depression and anxiety to substance use or chronic pain — and to alert a clinical team when outreach is needed.
We continue to develop new breakthroughs to manage our members’ health and provide value to our customers. Achieve Better Health is our new suite of care management products for complex health conditions, combining our award-winning engagement tools and predictive analytics with personalized support from a multi-specialty care management team — all designed to improve health outcomes and costs. The portfolio includes specialized solutions for specific health concerns for employees, such as onsite preventive check-ups, COPD and asthma digital monitoring, and fertility and pregnancy care.
New ideas arise from collaboration with doctors, members, and technology leaders. And those ideas benefit all of us.
Two of today’s leading innovators showcased tomorrow’s great ideas when Independence and Comcast presented Innovation Day with Greater Philadelphia’s most promising health care start-ups and entrepreneurs. Approximately 20 companies presented, and the event highlighted potential breakthroughs in keeping patients healthy, improving outcomes, lowering costs, and meeting the ever-increasing expectations of the health care consumer in fields ranging from care coordination to pharmacy management to the social determinants of health.
There is no single solution to the opioid abuse epidemic, but our efforts to prevent and treat addiction have shown remarkable promise.
Working directly with doctors and members to counter the crisis through policy changes and education, Independence Blue Cross has experienced a 45 percent reduction in the number of members using opioids (totaling 45,000 fewer members over four years). We have also seen a 35 percent reduction in opioid prescriptions to our members, ahead of the national average reduction of 29 percent in the same period.
In 2018, we implemented new guidelines for prescribing opioid medications and began to offer the opioid-reversal drug Narcan to members with no cost-share. These actions are built on previous Independence Blue Cross efforts such as limiting initial opioid prescriptions to five days and intervening with providers whose records showed patterns of potential overprescribing.
We are also finding success with the AmeriHealth Caritas Opioid Blueprint, a comprehensive approach to combating substance use disorder among the populations the company serves. Implementation of the Blueprint led to a 39 percent decrease in opioid prescription claims and a 38 percent increase in utilization of medication-assisted treatment compared with four years ago. And we have seen significantly more opioid users engaged through the AmeriHealth Caritas integrated care management program and other wrap-around support services.
These results give us hope that the tide of the opioid crisis can be turned.
Seniors with moderate incomes or experiencing poverty need and deserve comprehensive, coordinated care. That is why we helped bring a new provider to Philadelphia last year to provide exactly that approach: Dedicated Senior Medical Centers, a subsidiary of ChenMed.
Dedicated opened four new centers in Philadelphia neighborhoods with assistance from Independence. The centers follow a proven high-touch ChenMed model: primary care physicians average 189 minutes face-to-face with each patient annually (nine times the average in traditional Medicare practices), reducing emergency room visits by 33 percent and in-patient hospital admissions by 28 percent compared with the average for Medicare patients in the same counties, according to ChenMed.
The four Dedicated Senior Medical Centers that opened in Philadelphia reported nearly 500 Independence Medicare members selecting their site for service during Medicare open enrollment for 2019.
Our Foundation announced nearly $5 million in funding for projects promoting innovation and access.
Using data to inspire innovation, the Blue Cross Blue Shield Association’s “Health of America” reports provide valuable insights on national and regional health care trends. Powered by the industry’s largest resource for health care claims, provider, and cost data, “Health of America” shed new light on topics from vaccination rates to depression to prescription drug pricing in 2018. We augmented these reports with analyses for our service region based on Independence member data, and used this information to assess current needs and plan for the future.
We are inspiring people to see the diverse backgrounds of the more than one in five Americans who rely on Medicaid. The AmeriHealth Caritas “Faces of Medicaid” advertising campaign in Pennsylvania highlighted veterans, disabled individuals, children, and senior citizens who are Medicaid managed care members. The “On a Mission” campaign in Texas and North Carolina showed a family with a child who has had a disability since birth and a single parent facing financial challenges as she raises her children. The message is clear: this is what Medicaid looks like today.
Inspired by Magee Rehabilitation Hospital’s cutting-edge work on behalf of patients with stroke and spinal cord injuries, we are supporting the work of The Jerry Segal Classic to help Magee acquire three Ekso GT bionic suits. The Ekso GT is a wearable robotic exoskeleton that enables people whose lower limbs are paralyzed to stand up and walk during therapy.
As part of Independence’s 80th anniversary celebration, we held our first Community Impact Day, an inspirational company-wide day of service volunteering at local nonprofit organizations focused on good health and well-being. Nearly 350 Independence associates and interns volunteered more than 1,200 hours in one day. These service projects were organized by our corporate volunteer program, the Blue Crew, which plays an essential role in promoting our mission to enhance the health and well-being of the community. AmeriHealth New Jersey associates also participated, volunteering with Habitat for Humanity to help ready homes for families.
The Independence Blue Cross Foundation continues to inspire innovation and access in health care, announcing nearly $5 million in funding in 2018 for 117 grant awards including scholarship funding for nursing students, support for programs to prevent and treat opioid use disorder, and funding for community-based health and wellness nonprofits. The Foundation also supported “I Am Not Invisible,” an exhibition presented by the Women Veterans Center of the Veterans Multi-Service Center featuring stories and portraits of female veterans.
Our inspiration comes from our members, our provider network, and our community partners. Together, we are advancing health care.
One of the biggest obstacles in battling opioid abuse is the stigma attached to addiction. Our Independence Blue Cross Foundation tackled this problem head-on in 2018 through the “Someone You Know” campaign. Through advertising, personal videos, social media, print stories, and community events, the campaign focuses on inspiring hope in people seeking help and treatment.
“Someone You Know” was also the theme of the Foundation’s second annual national summit, headlined by Dr. Jerome Adams, Surgeon General of the United States. The event drew nearly 600 attendees from business, nonprofit, government, educational, and community organizations who share the goal of working together to end the opioid crisis.
In a year in which we expanded our Center City Philadelphia campus, helped our members get better care, and advocated for the continued transformation of health care, Independence celebrated our 80th year of service. We marked the occasion by renewing our commitment to service, innovation, and collaboration.
Our longstanding Supplier Diversity Program builds alliances with businesses owned by members of minority groups and women. For the first time in 2018, our total diverse supplier spend across Independence Health Group exceeded the $100 million mark!
Forbes magazine called Independence Blue Cross one of the best employers in the country, naming us to their list in the Large Employer category along with companies like Google, Costco, and Wegmans. Forbes asks 30,000 U.S. workers annually if they would recommend their current company to family and friends, and also to name other companies they would recommend. Our inclusion speaks to our positive relationship with our associates and to our strong reputation in the business community.
Independence Blue Cross won the HR Award for Excellence in Diversity at the 2018 HR Department of the Year Awards for Delaware Valley companies. The honor reflected our many initiatives in support of diversity and inclusion.
Our Center City Philadelphia campus now encompasses more than one million square feet of office space at three sites around 19th and Market Streets, unified by a public plaza and new outdoor digital signage. The next step will be a new Innovation Center in our 1901 Market Street headquarters, scheduled for completion in fall 2019.
We helped fans celebrate the Philadelphia Eagles’ first Super Bowl championship, sponsoring cut-outs of the team’s signature “underdog” masks in The Philadelphia Inquirer and free rides to the championship parade on SEPTA’s subway lines. As the Eagles’ official health insurance partner, Independence presents Eagles Training Camp and supports their health and wellness platform.
We sponsored the Philadelphia Heart Walk at Citizens Bank Park, the American Heart Association’s premier event for raising funds to save lives from heart disease and stroke, with more than 450 Independence, AmeriHealth Administrators, and AmeriHealth Caritas associates taking part.
We teamed up with the Philadelphia 76ers for the seventh consecutive year to bring 76ers-themed activities to fans all over the city as part of “Blue Week” leading up to the team’s home opening game.
We served for the first time as the “Transformation” presenting sponsor of the third annual Chester County Color 5K run and walk, supporting the Overdose Prevention Task Force’s efforts to combat the opioid and heroin epidemic in Chester County, Pa.
For the 22nd year we supported the Blue Cross Broad Street Run, as 40,000 runners — and more than 13,000 Independence Blue Cross members — took to the streets for the nation’s largest 10-mile race.
This year marked the 25th anniversary of the Blue Cross® RiverRink at Penn’s Landing, and we are as proud as ever to sponsor this landmark of healthy fun in Philadelphia.
We once again brought the holiday magic of the Deck the Hall Light Show projected nightly onto the facade of Philadelphia’s historic City Hall to residents and visitors alike.
The Philadelphia Union became the latest hometown sports team to take part in a “Get in the Game” promotion for our Achieve Well-being tools, offering Union-related incentives for our members.
For the 10th consecutive year, we sponsored the Step Out Walk to Stop Diabetes, a family-friendly 5K run and walk that raises funds for research, education, and advocacy and support for people living with diabetes.
Independence Health Group experienced a successful year in 2018 marked by strong financial performance. Our strength is evident in our year-over-year growth, with $324 million in net income in 2018 versus $77 million in 2017, for a 2.1 percent margin on $16.3 billion in total revenue. These results are primarily due to favorable medical cost trends in our individual and small group business, as well as strong investment income despite a volatile market.
Our multi-year diversified strategy has allowed us to weather dramatic shifts across the industry. We have the momentum to lead and grow within our region and nationwide. And our financial results have allowed us to make key investments and to support the communities we serve through a $25 million contribution to the Independence Blue Cross Foundation.
We remain committed to stringent stewardship of the premium dollars our members and customers entrust to us. We spent 81.5 cents of each premium dollar on hospital, physician, and pharmacy bills for our members’ care in 2018. We used 10.5 cents to run our business, and 5.9 cents to pay more than $900 million in federal, state, and local nonpayroll taxes.
| As of December 31, | ||
| 2018 | 2017 | |
| Cash and investments | $4,842 | $4,352 |
| Premiums and other receivables | 1,529 | 1,636 |
| Other assets | 1,048 | 1,154 |
| Total assets | $7,419 | $7,142 |
| Medical costs payable | 1,961 | 2,160 |
| Unearned income | 222 | 184 |
| Accrued expenses | 811 | 747 |
| Other liabilities | 1,080 | 939 |
| Total liabilities | $4,074 | $4,030 |
| Independence Health Group equity | 2,874 | 2,623 |
| Noncontrolling interest equity | 471 | 489 |
| Total equity | $3,345 | $3,112 |
| Total liabilities and equity | $7,419 | $7,142 |
| For the years ended, | ||
| 2018 | 2017 | |
| Premium revenue | $15,499 | $15,682 |
| Management fees | 781 | 731 |
| Total revenue | $16,280 | $16,413 |
| Claims incurred | 12,625 | 13,546 |
| Operating expenses | 2,291 | 2,295 |
| Premium, health care reform and other taxes | 620 | 285 |
| Total expenses | $15,536 | $16,126 |
| Operating income | $744 | $287 |
| Investment income | 4 | 112 |
| Other expense | 157 | 157 |
| Pre-tax net income | $591 | $242 |
| Income tax expense | (253) | (110) |
| Noncontrolling interest | (14) | (55) |
| Net income | $324 | $77 |
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.
M. Walter D’Alessio | Chairman EmeritusIn 2018, Walter D’Alessio was named chairman emeritus after serving as chairman of the Independence Health Group board since 2005. Walt’s steady hand as chairman guided Independence during tumultuous times in the health care industry. His business acumen and strategic thinking were key to our company’s national growth and success, and his commitment to our mission and our members was evident in every aspect of his leadership. We extend our gratitude, admiration, and best wishes to Walt as we acknowledge his extraordinary contributions.
Juan A. Lopez, Jr.
Senior Vice President, Finance Shared Services
Anthony J. Maleno
Senior Vice President, Operations
Marcy F. Rost
*
Senior Vice President and Chief Strategy and Communications Officer
Richard L. Snyder, M.D.
Senior Vice President and Chief Medical Officer
Paula J. Sunshine
Senior Vice President and Chief Marketing Executive
Michael R. Vennera
Senior Vice President and Chief Information Officer
Patrick Y. Yung
Senior Vice President, Corporate Development and Strategic Investing
*The executive team of Independence Health Group, Inc.
Independence Health Group, Inc., is the parent company of Independence Blue Cross, LLC, and its subsidiaries and affiliates.
As of December 31, 2018
