March 1, 2018

Fallon, Tufts finish 2017 in the black

Grant Welker
Fallon Health, whose home office is in downtown Worcester, posted nearly $8 million in profit last year, a sharp turnaround after a $20 million loss in 2016.

Worcester-based Fallon Health and Tufts Health Plan of Watertown each reported positive net income for 2017, while Blue Cross Blue Shield of Massachusetts and Harvard Pilgrim Health Care posted losses, according to earnings statements from the four Massachusetts insurers Thursday.

Fallon posted net income of $7.9 million for the year ending Dec. 31. That's a turnaround from the $20.1-million net loss the company posted in 2016. The health plan saw its revenue increase from $1.2 billion to $1.3 billion, though it did finish 2017 with an operating loss of $7.6 million.

Fallon listed strategic investments over the last year as factors boosting earnings. Included in those are the company's participation in the new Accountable Care Organization program run by the state Medicaid program, MassHealth; an expansion into Berkshire county with Medicare plans; and the development of a new Summit ElderCare site in Webster.

"Our year-end results are consistent with expectations, reflecting strategic decisions and investments that were made to provide high-quality products and services, achieve purposeful growth and turn around financial performance over the prior year. We finished the year strong, generating good momentum for 2018," Kevin Grozio, senior vice president and chief finanical officer for Fallon said in the earnings statement.

Tufts Health Plan, which as a corporate office in downtown Worcester, reported net income of $59.4 million, including operating income of $14.9 million, significantly better than the company's 2016 results, which included net income of just $3 million, and a $53.5-million operating loss.

Meanwhile, the state's largest insurer, Boston-based Blue Cross Blue Shield of Massachusetts, and Wellesley-based Harvard Pilgrim Health Care, both finished the year with losses. Blue Cross posted a $6.9-million net loss, and an $89-million operating loss, which it attributed to a one-time charge related to its dental business. The results mark a reversal from a positive 2016 year for Blue Cross, which ended that year netting $78.1 million.

Harvard Pilgrim didn't turn a profit, but narrowed its losses, finishing 2017 with an $8.7-million net loss, and an operating loss of $23.8 million, compared with $48.5 million and $91.3 million, respectively, in 2016.


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