Minn. health plans report good year in 2010

The Minnesota Council of Health Plans released figures Friday showing a slowdown in spending per person for health care, most likely due to the recession and the continued high unemployment.

At the same time health plans reported an operating margin that was much wider than in recent years, which indicates most plans profited in 2010.

Health plans had total revenue of $19.3 billion and an operating income of $293.2 billion. The operating margin as a percent of revenue was 1.5 percent in 2010, 0.8 percent in 2009 and 0.4 percent in 2008. In three years prior to that Minnesota HMOs as a group had a negative operating margin.

Minnesota Council of Health Plans Executive Director Julie Brunner said the bad economy kept people in plans where there were co-pays from seeking medical care altogether. And for subsidized health care programs, the state set contract rates that were too high in the end.

"Because there was a reduction in spending per person of about 6.5 percent, the health plans ended up spending less out of the rate the state set than was anticipated and there were more people served in the program," Brunner said. She added that HMOs have figured out ways to more efficiently care for the chronically ill, which may have helped cut costs.

HMOs are required to report financial results to the state of Minnesota every year. Blue Cross and Blue Shield of Minnesota posted its 2010 financial summary on its website April 1. The HMO reported an increase in operating income of 41 percent from 2009, to $127.8 million. Its revenues declined to $9.05 billion from $9.12 billion in 2009.

Brunner noted the rates for health plans in the current fiscal year will not result in the kind of gains seen in 2010. She said the Minnesota Department of Human Services knew health care spending would decrease and adjusted the rates accordingly, which Brunner said saved the Medicaid program $64 million.

Minnesota health plans also reported health care costs per person rose 2.6 percent from 2009 to 2010. The report also covered spending by private sector. The largest increase between 2009 and 2010 was in spending on chemical dependency and mental health services at 7 percent. There was a 5 percent rise in outpatient care spending.