Michigan Blues on path to slash ex­penses $300 mil­lion by 2019

Modern Healthcare - - REGIONAL NEWS - —Jay Greene, Crain’s Detroit Busi­ness

Blue Cross and Blue Shield of Michigan has cut ex­penses by $106.5 mil­lion since it an­nounced its three-year strate­gic busi­ness trans­for­ma­tion pro­ject in Novem­ber 2015 and said it is on-pace to cut a to­tal of $300 mil­lion by 2019.

Over the past year, Blue Cross laid off more than 50 of its 7,900 em­ploy­ees, out­sourc­ing some in­for­ma­tion tech­nol­ogy and au­tomat­ing pro­cesses in ben­e­fits. It also plans on re­duc­ing in­de­pen­dent agents’ com­mis­sions.

For 2016, Blue Cross projects it will lose $73 mil­lion in its in­di­vid­ual busi­ness unit. Last year, it lost $68 mil­lion on its over­all op­er­a­tions.

Blue Cross has been try­ing to di­ver­sify its busi­ness lines—hav­ing some suc­cess by boost­ing rev­enue in its Medi­care Ad­van­tage man­aged-care ser­vice line—to help sub­si­dize its com­mer­cial in­di­vid­ual and Medi­care sup­ple­men­tal insurance lines, which have lost hun­dreds of mil­lions of dol­lars in re­cent years.

Blue Cross of Michigan has av­er­age an­nual rev­enue of $9.7 bil­lion.

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