Spending For Minn. Health Plan Members Up $1.3B In 2012

By David Dankwa

InsuranceNewsNet

Health plans in Minnesota paid nearly $19 billion for medical care on behalf of their members in 2012, an increase of $1.3 billion, or 7 percent, over the previous year.

In all, plan members spent $52 million a day on doctor visits, prescription drugs, hospital stays and other medical services in 2012, according to the Minnesota Council of Health Plans.

The uptick in spending brought the overall industry-wide operating profits to slightly more than $120 million, against premium revenues of $20.9 billion. Investment income for the year totaled $145.7 million, contributing 1.2 percent to reserves.

Expenditures were up dramatically in a number of categories, including for care provided by hospitals in outpatient settings, which increased 10 percent, and for care provided by emergency centers, which was also up 10 percent.

Spending on chiropractors, therapists, social workers and nurse practitioners went up 15 percent, as did spending on chemical dependency and mental health services provided in both inpatient and outpatient settings, excluding prescription medications and supplies.

In addition, spending on prescription drugs and non-reusable medical supplies increased 14 percent, according to MCHP.

Other categories that experienced spending increases included: care for people who were hospitalized, physician services, medical doctors and doctors of osteopathy.

Only a few categories experienced declines in spending. Expenditures related to medical goods such as wheelchairs, eyewear, hearing aids, oxygen and equipment rental, dropped 5 percent, while spending on care provided at a skilled nursing facility declined 8 percent.

Spending on care provided at home under the direction of a physician was down 2 percent.

MCHP reported that revenue derived from state public programs that serve 615,157 Minnesotans was $4.1 billion in 2012 and the health plans spent more than $10.2 million a day on care for enrollees. Providers ended the year with an operating margin of 1.4 percent or $56.7 million.

The average operating margin over the past 10 years on public programs is 1.8 percent of revenue, according to MCHP.

In a statement, Julie Brunner, executive director of the Minnesota Council of Health Plans, said managed care continues to demonstrate excellent value that allows the state to predict its budget and provide excellent coverage. “As the state’s recent value of managed care report showed, Minnesota’s nonprofit health plans continue to outperform plans from across the nation in service, quality and access to care,” Brunner said.

Overall, enrollment in MCHP’s seven member health plans topped 4.4 million, a 2 percent increase from 2011.

Enrollment in Special Needs Basic Care, a plan for 18- to 64-year-olds who have a disability and qualify for Medicaid, was up by more than 18,000 in 2012 as a result of the state moving from fee-for-service coverage to managed care.

MCHP data also shows nearly 61,000 Minnesotans were enrolled in health care coverage under the federal expansion of Medicaid, an increase of 14 percent from 2011. Total enrollment in all public programs reached 615,157.

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