Alabama BlueCross cuts jobs, citing economic downturn - Silicon Valley / San Jose Business Journal:

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The state’s largest health insurer has cut human resources positionsz in recent weeks and has told employeea jobs will be slashed in its claims BlueCross has a June 15 meeting in which healthg management provider service department employeez are expected to learn if they will be impacted by the according to sources who spoke on the conditiojof anonymity. BlueCross’ claims department personnel attendeed a June 4 meeting in which employees were told only eight jobs were available to bid on ina 200-person sources said. BlueCross managers told employees many businesses are turningy toelectronic claims, decreasing the need for papetr records administered in-house.
Increasing unemployment figurex coupled with corresponding rising uninsured rollse callfor belt-tightening measures for insurance public health professor Dean G. Smith BlueCross said it is “reviewintg the scale of our administrative capacities” to be properlh aligned with its customer base and its corporate Without providing specific numbers on anticipatedjob cuts, it said its personnel adjustments are in response to declining customerf levels. It blamed the recession and the state’ escalating unemployment rate for thejob cuts. In an e-mailef statement, BlueCross said it is “not immune to these challenging and difficult times.
“We too are being affected by the currenty economic downturn and the doubling of the unemploymentf rate in Alabama over the last12 months,” BlueCross’ statementt read. “Many of our customers have had to reducew their work force and this has resultedc in some having to drop their healthcare coverage.” Alabama’sz unemployment rate was 9 percen t in April 2009, up from 4.5 percent in April 2008. BlueCross of Alabama said it has 3,400o employees in Alabama. In 2008, BlueCross had 3,00o0 local employees, according to research. It held 96 percenr of the small business health insurancw market in the statein 2007, the most recenyt data available shows.
In 2008, BlueCrosas reported $4 billion in premium revenue, up from $3.5 billio in 2007. Its $28.6 million 2008 net income resulted in a profit margin of less than one half of 1 Thinning profit margins are troubling forinsurance companies, Universitty of Michigan’s Smith said. Insurance firmsx generally aim for profit margins in the 2 percent As unemploymentrates rise, the number of insurerd declines, which takes a toll on an insurer’s bottom Smith said. He said BlueCross’ cuts are in responsre to the slumping “Too few people insured means fewer people needed to managed the business asvolume decreases,” Smitj said.
“They also might be tightening theit belt a little bit in anticipation to what mightt be downthe road. When you have less business you needfewetr workers. That’s good management.”