Blue Cross Blue Shield Plans Post 18.2% Decline in Operating Earnings in 2007

PHILADELPHIA, June 17 /PRNewswire/ -- Sherlock Company reported in its PULSE research publication that Blue Cross Blue Shield Plans posted a 18.2% decline in operating earnings as revenues increased by 7.4% in 2007. Insured membership decreased by 1.4% to 51.5 million as ASO revenues posted a mean increase of 6.0%.

Operating margins declined by 1.0 percentage points to 3.3% in 2007. Results for the 39 plans varied; 6 had improvements in operating margins of at least one percentage point and nine worsened by three or more percentage points. The median health benefit ratio increased by 1.1 percentage points to 86.1%.

The median premium rate increase was 5.4% as median medical costs per member increased by 6.4%. Results varied by each of the Blue Cross Blue Shield Plans, and they are individually reported in PULSE.

Administrative costs increased at a median rate of 7.6% per member. "The increase among Blue Cross Blue Shield Plans as a whole is higher than reported in 2007 by Blue Cross Blue Shield Plans participating in this year's Sherlock Expense Evaluation Report benchmarking studies," said Douglas Sherlock, President of Sherlock Company.

Results in this analysis are drawn from financial statements of individual Blue Cross Blue Shield plans, including their statutory statements.

Sherlock Company (http://www.sherlockco.com/) based in Gwynedd, Pennsylvania, provides informed solutions for health plan financial management. Since its founding in 1987, Sherlock Company has been known for its impartiality and technical competence in service to its clients. Sherlock Company's performance benchmarks reflect over 340 health plan years of experience.

   Contact: Douglas B. Sherlock, CFA
            215-628-2289
            sherlock@sherlockco.com

CONTACT: Douglas B. Sherlock, CFA of Sherlock Company, +1-215-628-2289, sherlock@sherlockco.com

Web site: http://www.sherlockco.com/

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