Blue Cross of NC’s net income down, exec pay up
Blue Cross and Blue Shield of North Carolina’s net income was down about 67 percent last year compared with 2011 as the health insurer said it spent more on investments in technology and infrastructure and saw increased medical claims.
The insurer, the state’s largest, also reported that the total compensation of nine of its top executives were up in the year. Its chief executive officer saw a 37 percent increase in the total that includes base salary, a bonus and other compensation.
The insurer reported in a news release Friday that it saw a consolidated net income in 2012 of $57.7 million. That’s down from the $177.1 million the insurer reported in 2011.
Revenues totaled $5.7 billion, up about 4 percent from revenues in the prior year, while claims and medical expenses were up 8.4 percent to $4.5 billion.
For each premium dollar, the insurer said in the release that it spent 87 cents on medical care, up from 85 cents in 2011.
It said most of the remainder of the premium dollar was spent on customer service and information technology.
The insurer said it made investments in technology and infrastructure necessary to prepare for health care reform.
“2012 was a year of focus on the future and the full implementation of health reform,” Brad Wilson, president and CEO of Blue Cross and Blue Shield of North Carolina, said in the release. “We are making investments today to ensure we can meet North Carolinians’ health care needs tomorrow.”
In addition, the company reported that nine different executives received increased total compensation in the year.
Wilson saw a 37 percent increase in compensation for a total of almost $2.48 million. That is made up of a salary of $854,692, a bonus of almost $1.6 million and other compensation of $25,291.
The next highest paid executive was Maureen K. O’Connor, executive vice president, chief strategy officer, innovation officer and assistant corporate secretary.
O’Connor was reported to have received $1.665 million in total compensation in 2012, composed of a salary of $500,000, a bonus of $1.14 million, and other compensation of $25,115. The total was up about 41 percent.
Lew Borman, a spokesman for the insurer, said in an email that the executives’ compensation was in-line with other companies of Blue Cross and Blue Shield of North Carolina’s nature and size.
“Less than (one-tenth) of a cent on a premium dollar goes to exec compensation, while 87 cents of every dollar covers health care of our customers,” Borman said in the email.