Independence Health Group reports strong financial results for 2017
Independence Health Group, Inc., (Independence) the parent company of Independence Blue Cross, LLC, reported strong financial results for 2017 with total revenue of $16.4 billion and net income of $77 million, or 0.5 percent of total revenue.
Throughout the last five years, the company has increased revenue by 57 percent while consistently committing the majority of each premium dollar — 86.4 cents in 2017 — to helping its members achieve and maintain good health.
“2017 was a strong year for Independence Health Group. Our strategy allowed us to keep growing despite uncertainty in the industry,” Independence President and CEO Daniel J. Hilferty said.
“We experienced growth across all sectors, highlighted by AmeriHealth Caritas which outperformed in many markets, as well as a solid turn around in our New Jersey business. Our core commercial consumer businesses also had a very strong year.
“Overall we managed well against our plan for diversification and we continue building on the momentum of our multiyear strategy of growth and diversification,“ he continued.
The company ended 2017 with $77 million in net income, which is up from $67 million in 2016.
“Our performance can be traced to favorable claims and medical cost trends reinforced by the company’s commitment to value-based care,” said Gregory E. Deavens, Independence executive vice president, chief financial officer and treasurer.
“We saw improvement in pharmacy costs as a result of our renegotiation with our pharmacy benefits manager. We also identified opportunities to improve the efficiencies of our operations and we continue to make our systems more efficient for our members.
“We ended 2017 with an increase in net income and a strong balance sheet and I feel positive about the direction and the strength of the company into 2018,” Deavens added.
Strategic decisions to mitigate business risk also impacted Independence’s year-end results. This included the decision to exit the Medicaid managed care business in Iowa and the sale of AmeriHealth Casualty Insurance Company, Independence’s workers’ compensation business.
Due to its strong performance, the company was able to contribute $10 million to the Independence Blue Cross Foundation.
“We are particularly proud of the work that they are doing to combat the opioid crisis, support and strengthen nursing education and invest in community health clinics in medically underserved areas and much more,” Hilferty stated.
“Bottom line, in this time of political turmoil, where we are dealing with the financial impact of post Affordable Care Act implementation, Independence continues to grow and innovate while keeping members at the center of all we do.”
Independence paid more than $700 million in federal, state and local non-payroll taxes for 2017. The company did not receive refundable tax credits in 2017 associated with the recently enacted federal tax reform law because the company was not subject to the Corporate Alternative Minimum Tax in prior years.
The company ended the year with $2.6 billion in surplus, which is in the efficient range as defined by the Pennsylvania Insurance Department and ensure that the company has the resources to pay claims.
Headquartered in Philadelphia, Independence serves nearly 8.5 people in 24 states and the District of Columbia.