DURHAM – Insurance provider Blue Cross and Blue Shield of North Carolina (Blue Cross NC) reported financial results from 2021 earlier today. In a statement, the organization noted that despite rising medical expenses, its efforts and investments position Blue Cross NC in a “strong, stable position.”
The three highest costing months, with regard to health care, that the company has on record, occurred during 2021, the company noted.
“While many industries are just now feeling the effects of inflation, Blue Cross NC has been working to address rising medical costs for years,” said Mitch Perry, chief financial officer of Blue Cross NC, in a statement shared with WRAL TechWire. “Our fiscal preparation and focus on making health care better, simpler, and more affordable for our members helped us keep rates stable, but there is still more work to do as inflation and drug prices continue to rise.”
According to the company, it saw membership grow by 4.3 million subscribers, some 11%. That increase in membership, including 440,000 “Healthy Blue Medicaid” members, allowed the company increases in revenue, as well.
The company launched a joint venture in 2021, as well, though the company statement did not report directly on the collaboration.
According to the statement, Blue Cross NC’s 2021 net income was $569 million, and the company’s net income ratio was 5.3%. Meanwhile, the company’s operating income ratio was negative 0.4%.
“Unrealized gains in the company’s investment portfolio also contributed to revenues increasing from $9.9 billion in 2020 to $10.7 billion in 2021,” the company statement reads.
Overall, the statement notes that Blue Cross NC believes itself to be in a “strong, stable position despite a lingering pandemic and record high claims and medical expenses.”
COVID-19 costs doubled
A driving factor of rising healthcare costs came from COVID-19 and the global pandemic. According to Blue Cross NC, claims related to COVID-19 more than doubled, with $185 million in 2020 to $378 million in 2021.
The second leading contributor to increasing healthcare costs came from rising drug costs, the insurance provider noted in its statement.
According to Blue Cross NC, drug costs rose by 10% in 2021, which the company said in a statement was “driven by a 15% increase in the cost of specialty drugs such as antidiabetics and those used to treat autoimmune and dermatological conditions.”
Telehealth up 7,500%
The company noted that following the onset of the global pandemic, there was a dramatic increase in teleheath services.
How large? 7,500%, approximately, the company statement noted, which the insurance provider said that shift persisted during 2021.
“This equals a total spend of approximately $76 million per year,” the statement reads.
Blue Cross NC response
The company said it saved more than $100 million in operating costs during the year, as well as strong financial returns from further investment in the company’s Blue Premier value-based program, which the company estimated as a savings of some $197 million.
“As a not-for-profit, Blue Cross NC does not have shareholders, which gives us the flexibility to invest earnings directly toward lowering our customers’ out-of-pocket costs and to make significant investments in capabilities for our members,” said Perry. “Our financial strength and stability give us the ability to fight for our members during the pandemic and beyond.”
The organization brought in a new CEO, Dr. Tunde Sotunde, in 2020.