Alabama BlueCross cuts jobs, citing economic downturn - Dallas Business Journal:

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The state’s largest health insurer has cut human resourcees positions in recent weekas and has told employees jobs will be slashed in itsclaimx department. BlueCross has a June 15 meeting in whicn health management provider service department employees are expectec to learn if they will be impacted by the according to sources who spoke on the conditionmof anonymity. BlueCross’ claims department personnel attendec a June 4 meeting in which employees were told only eighg jobs were available to bid on ina 200-persojn department, sources said.
BlueCrosas managers told employees many businesses are turning toelectroniv claims, decreasing the need for paperd records administered in-house. Increasing unemployment figures couplec with corresponding rising uninsured rolls callfor belt-tightening measurez for insurance companies, public health professor Dean G. Smithh said. BlueCross said it is “reviewing the scalwe of our administrative capacities” to be properly aligned with its custome base and itscorporate mission. Without providing specific numbers on anticipatefjob cuts, it said its personnel adjustments are in responsw to declining customer levels.
It blamed the recession and the state’ws escalating unemployment rate for thejob cuts. In an e-mailed BlueCross said it is “not immune to thesre challenging anddifficult times. “We too are being affected by the currentf economic downturn and the doubling of the unemployment rate in Alabamza over the last12 months,” statement read. “Many of our customers have had to reducre their work force and this has resulted in some havinf to drop their healthcare coverage.” Alabama’s unemployment rate was 9 percentr in April 2009, up from 4.5 percent in Apriol 2008. BlueCross of Alabama said it has 3,40 employees in Alabama.
In 2008, BlueCross had 3,000p local employees, according to research. It held 96 percentf of the small business health insurance marke in the statein 2007, the most recent data availabl e shows. In 2008, BlueCross reported $4 billion in premiu m revenue, up from $3.5 billion in 2007. Its $28.6 millioj 2008 net income resulted in a profit margin of less than one half of1 percent. Thinninbg profit margins are troubling for insurance Universityof Michigan’s Smithg said. Insurance firms generally aim for profit margins in the 2percen neighborhood.
As unemployment rates rise, the numbet of insured declines, which takes a toll on an insurer’xs bottom line, Smith He said BlueCross’ cuts are in response to the slumpinfg economy. “Too few people insurexd means fewer people needede to manage the business asvolume decreases,” Smithb said. “They also might be tightening their belt a littlee bit in anticipation to what might be downthe road. When you have less busineses you needfewer workers. That’s good management.
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