Profitable insurer singing the health care blues

BlueCross BlueShield of Florida has been plenty vocal lately about its burden of the rising cost of health care. The insurer is sending letters to its members in the Tampa Bay area, telling them they won't be able to use seven BayCare hospitals after Sept. 30 because the hospitals are demanding too much in reimbursements.

BlueCross also said it is exiting the Medicare HMO program in Pinellas County next year because the federal government isn't paying it enough to run the program.

But at a recent annual policyholders' meeting last week, the Blues weren't complaining about money. Instead, the company was celebrating record financial performance.

The Jacksonville company, the biggest health insurer in the state with more than 6-million members, had record premium revenue of more than $5-billion last year, up 11 percent from 2000. The Blues did an even better job of bringing money to the bottom line. Profits were up 26 percent to $92-million last year.

The company, which is an independent, tax-paying mutual company, also has nearly $1-billion in a surplus called policyholders' equity. This money is set aside to meet higher-than-expected claims.

Dr. Robert Lufrano, Blues' president and chief operating officer, said the enormous surplus also allows the company to "develop new capabilities that improve the quality of health care coverage while lowering overall costs."

"Consumers want more convenience, control and personalized service and choice," he said in his message to board members.

Sounds good, but based on his company's recent decision to cut hospitals and eliminate coverage for more than 6,000 seniors in the market, some consumers might question whether Lufrano is getting his own message.

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