SOURCE: HealthPartners

April 18, 2007 12:43 ET

HealthPartners Lowers Administrative Costs for Third Consecutive Year

BLOOMINGTON, MN -- (MARKET WIRE) -- April 18, 2007 -- For the third consecutive year, HealthPartners reported lower administrative costs. Excluding taxes and assessments, administrative expenses in 2006 fell to 5.9% from 6.4% in 2005. Ninety two percent of health plan premiums went directly to patient care. Net income ($30 million) was one percent of revenue.

"Our goal is to make health care affordable for all Minnesotans," said Mary Brainerd, HealthPartners president and CEO. "We need to keep focused on improving health care quality and keeping administrative costs low," she added.

HealthPartners is increasing the use of the website to create more convenient and cost-effective service for members. For instance, members can use a personalized and secure webpage to receive communications from providers and the health plan. In addition, in the past year 83% of all claims were processed electronically, ensuring prompt and accurate payment to providers. HealthPartners is also using the Toyota lean process to streamline workflows. This reduced expenses by an estimated 3 million dollars in 2005.

Key cost drivers

        Medical expenses rose 10% in 2006 over the previous year. The main
         cost drivers were:
                 Diagnostic imaging (10% increase)
                 Specialty pharmacy (12% increase)
                 Hospital services (7.8% increase).
Membership growth

For the second year in a row, HealthPartners reported solid membership growth according to financial reports filed with the state. Medical and dental membership grew by over 21,000.

About HealthPartners

HealthPartners (www.healthpartners.com) is the largest consumer-governed, non-profit health care organization in the nation with commercial and Medicare Advantage plans that received the highest rating of "Excellent" from the National Committee for Quality Assurance.

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