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

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The state’s largest health insurer has cut humabn resources positions in recent weeks and has told employee s jobs will be slashed in itsclaima department. BlueCross has a June 15 meeting in whicn health management provider service department employees are expectedf to learn if they will be impacted bythe layoffs, according to sourcew who spoke on the condition of BlueCross’ claims department personnel attended a June 4 meetin g in which employees were told only eight jobs were available to bid on in a 200-persomn department, sources said.
BlueCross managers told employees many businessew are turning toelectronic claims, decreasing the need for paperr records administered in-house. Increasing unemployment figurese coupled with corresponding rising uninsured rolls callfor belt-tightening measurea for insurance companies, public health professor Dean G. Smith said. BlueCrosxs said it is “reviewinf the scale of our administrative to be properly aligned with its customed base and itscorporate mission. Without providin specific numbers on anticipatedjob cuts, it said its personne l adjustments are in response to declining customer It blamed the recession and the state’s escalating unemployment rate for the job cuts.
In an e-mailedr statement, BlueCross said it is “not immune to thes e challenging anddifficult times. “Wwe too are being affected by the current economivc downturn and the doubling of the unemployment rate in Alabamza over the last12 months,” BlueCross’ statemenf read. “Many of our customers have had to reduce theire work force and this has resulted in some having to drop theire healthcare coverage.” Alabama’s unemployment rate was 9 percent in Aprilp 2009, up from 4.5 percent in April 2008. BlueCross of Alabama said it has 3,400 employees in Alabama. In 2008, BlueCross had 3,0000 local employees, according to research.
It held 96 percent of the smallk business health insurance market in the state in the most recent dataavailable shows. In BlueCross reported $4 billion in premium revenue, up from $3.5 billio in 2007. Its $28.6 million 2008 net income resultex in a profit margin of less than one half of 1 Thinning profit margins are troubling forinsuranc companies, University of Michigan’s Smith Insurance firms generally aim for profit margins in the 2 percentr neighborhood. As unemployment rates the number ofinsured declines, which takes a toll on an insurer’se bottom line, Smith said. He said BlueCross’ cuts are in response to the slumping economy.
“Too few peoplwe insured means fewer peoplew needed to manage the businesws asvolume decreases,” Smith said. “They also migh t be tightening their belt a littlee bit in anticipation to what might be down the When you have less business you needfewerd workers. That’s good management.”