2017 Annual Report — CEO Letter (Section 1)

Providence landscape

2017 Annual Report

Harnessing change, investing in Rhode Island

No one can deny that 2017 was a rollercoaster year for healthcare. For months, the future of the Affordable Care Act dominated the headlines from coast to coast.

While we certainly felt the effects of this national debate, at Blue Cross & Blue Shield of Rhode Island we were not buffeted by the winds of constant change. Rather, building on the foundation of our strategy, driven by our corporate values, we harnessed change by accelerating our efforts to achieve affordable and simple healthcare for Rhode Islanders.

You’ll see reflected in this annual report signs of the progress we’re making on this journey.

We invite you to read the story of Coastal Medical, where doctors, pharmacists, nurse practitioners, and other providers work as a team to ensure that patients receive the right care in the right place at the right time. Similarly, we’re delighted to share that our patient-centered pharmacy program was recognized with an industry award affirming that this innovative approach saves money for our members while improving their health outcomes.

Innovation is a critical component of our work; our retail stores, the newest of which opened in 2017 in East Providence, show that innovation isn’t always about the hottest new tech application. Providing comfortable spaces for Rhode Islanders to come together in their own neighborhoods, where they can speak to caring experts who put them at ease and answer tough questions, turns out to be a prescription for success.

Our retail stores are popular in part because while all healthcare is local, in Rhode Island we take it hyper-local. As the largest Rhode Island-based insurer serving the state's businesses as well as individuals, we’re uniquely positioned to understand the challenges faced by our customers and members. That’s why we introduced B2Blue, providing data and tools to enable businesses to offer the most cost-effective health plans to their employees. That’s why we empowered members to engage in their own well-being through our wellness program powered by Virgin Pulse®. Our partnership with this energetic young company is one of the reasons they now make their home in the Ocean State.  And finally, that’s why we continually recommit to investing in organizations that focus on the health of our state’s children. We believe a healthier Rhode Island is the key to vibrancy, growth, and sustainability.

As we look ahead to our next decade, working together with our partners, we will continue to drive the changes needed to ensure this bright future for our state. We hope you share our optimism and our commitment. We treasure your partnership and the trust you place in us.

Kim A. Keck, President and CEO, BCBSRI and Randy A. Wyrofsky, Board Chair, BCBSRI

2017 Annual Report — Accelerate (Section 2)



Expanded approaches to care drive positive outcomes

BCBSRI furthers commitment to improving health and lowering costs.

Making strides in systems of care

Advancing the coordination of healthcare across providers is a key component within our strategy to improve the quality and cost of healthcare for our customers and the larger Rhode Island community. We’ve partnered with the state’s leading providers of healthcare to create “systems of care” where primary care providers (PCPs) direct and coordinate their patients’ care with specialists and hospitals. This collaboration has led to our members seeing measurable results in the quality and cost of their healthcare through a variety of innovative clinical programs.

To accelerate the pace at which our state’s leading healthcare organizations establish new models of patient engagement and coordination, BCBSRI continues to focus on aligning our provider payment models and health plan designs to incent and reward the outcomes our members and healthcare providers achieve.

High-risk members managed through systems of care*

High Risk Members

*Numbers based on engagement reports received from systems of care.

Defined health outcomes for systems of care

Systems of care are evaluated on measures such as the number of members who:

  • Have complicated health conditions and were helped by nurse case managers
  • Receive evidence-based screenings for chronic conditions such as diabetes

A model system of care

At Coastal Medical, 125 providers deliver care at 20 medical offices across Rhode Island. Their PCPs, nurses, specialists, and other healthcare providers work as a team to care for patients. Through our partnership, BCBSRI members at Coastal can take advantage of:

  • Extended office hours
  • No-cost visits with a nurse and pharmacist in the PCP’s office
  • Behavioral health counselor located in the PCP’s office
  • Classes to help members manage chronic conditions
  • Palliative care program to facilitate honest end-of-life discussions

This model of care truly puts the patient at the center.

Nurse with patients

Coastal doctor Kristen Hubbard, MD, with patients

Bringing patients and pharmacists together to improve health

BCBSRI offers an industry-leading approach to help members manage their pharmacy needs. For members with complicated health conditions, pharmacists play an essential role on their healthcare team. That’s why we offer visits with a pharmacist—alongside the doctors, nurses, and other healthcare professionals taking care of our members—as part of our systems of care model.

Locating pharmacists in provider offices has helped members improve their health and, in many cases, saved them money as well. These visits—offered at no cost through a member’s BCBSRI plan—are also available over the phone or in local pharmacies. We have shared the success of our program, and several Blues plans around the country have implemented similar programs.

Discover more about our Patient-Centered Pharmacy Program.

2017 Best Practices Prize
 from the FAST Network

This award recognizes Blues Plan innovations that improve quality and value for members in government business.

$23 million
saved since the program began in 2014*

*Based on direct costs of reduced or avoided drug costs annualized and on indirect costs supported by an actuarial model estimating the cost of a medical intervention.

Rated as a top 10 health plan in the nation

NCQA Private Health Insurance Rating

Locating pharmacists and nurse case managers in systems of care are just two initiatives that are showing results in improved quality for our members. In 2017, the National Committee for Quality Insurance gave us an Excellent rating. We received a 4.5 out of 5 in NCQA’s Private Health Insurance Ratings 2017-2018 for our commercial preferred provider organization (PPO) plans. That makes us one of the highest rated health insurance plans in the countryand we're honored.

2017 Annual Report — Innovate (Section 3)

Woman in factory


New models of care, service create more choice

Regional plans, local service reach members where they are.

Creating new choices in coordinated care

Knowing that successful Rhode Island businesses have a strong regional reach, we developed new provider network choices so they can better meet their employees’ needs.

Our BlueCHiP New England regional health plans not only extend options for businesses to buy the right size network—local, regional, or national—they also expand our systems of care approach beyond the state. Individual members also gained new choice in coordinated care when we partnered with the Lifespan health network to introduce BlueCHiP Direct Advance on HealthSource RI, a plan that can help members save money on premiums. With a coordinated care plan, members choose a primary care provider (PCP) who understands the whole view of their health. We know from national studies as well as our own data that members who have regular access to a highly capable PCP are healthier and have better health outcomes. They also are less likely to receive unnecessary care or expensive services that deliver little value.

Your Blue Store

Building on the success of our retail stores

To better serve the East Bay community, we opened a flagship store in East Providence, adding to our locations in Warwick and Lincoln. Our new store built on the success we already achieved with retail, helping our customers improve their health and more easily understand their healthcare. Our three Your Blue StoreSM locations offer:

  • Sales and service staff to help with questions and plan choices, in English and Spanish
  • Free exercise classes for our members, such as yoga and Zumba, as well as community events
  • An on-site nurse to help members with questions about their ongoing health conditions
  • Health screenings for blood pressure and body mass index

70%of Rhode Islanders live within a short drive of a Your Blue Store location

67%increase in retail visits compared to 2015

87,000retail visits since 2015

Kristina DiMatteo Fields and Shannon Pierce
Kristina came to our store for help. Shannon helped her change her life.

Infertility is such an emotional, personal thing, and I just wanted to talk to someone in person. Shannon sat with me for two hours going through my options. If it wasn’t for her, my daughter wouldn’t be here.

Kristina DiMatteo Fields, BCBSRI member

Mobile messaging

We have extended customer service to the place many members turn most often: their phones. Members can use our app, Your Blue Touch RI, to find a doctor, view their benefits, check claims, and contact us with questions. Members also have chosen to receive important health reminders and plan information via our secure mobile messaging platform:

375,000messages delivered

97%view rate

Expanding access to confront the opioid crisis

In Rhode Island, opioid overdose is the leading cause of accidental death.* To help our members struggling with substance use disorders, we participated in the Governor’s Opioid Overdose Task Force and offered expanded access to medical treatment options, including:

  • The CODAC Medication-Assisted Treatment Program
  • A pilot program with Roger Williams Addiction Services Center
  • Butler Hospital Ambulatory Detoxification Program
  • HealthPath, a team-based approach to care created by BCBSRI, Care New England, and Continuum Behavioral Health

Through all these efforts, we are striving to keep stigma out of the discussion with Say This, Not That.

Learn more in our 2017 Community Investment Report and in this op-ed from CEO Kim Keck.

*Rhode Island Department of Health


Given the extent of the opioid crisis and our understanding of how difficult it can be to address addiction, and our knowledge that this is a chronic disease of the brain, a medical approach is clearly warranted. We are pleased to have the opportunity to collaborate with BCBSRI on this important program.

Linda Hurley, CODAC President and CEO

2017 Annual Report — Enable (Section 4)



New business, consumer tools help customers thrive

We’re showing customers how they can shift their thinking about health.

B2Blue-It's where business is going

Helping Rhode Island businesses grow

With a firsthand knowledge of the competing demands on businesses, we are taking the lead on helping employers and brokers take a fresh look at benefits strategies.

B2Blue is shifting perceptions of health insurance, demonstrating that it is a key element employers can use to attract talent, control costs, and grow. We are showing businesses how to create a new strategy by combining these overlapping tools:

Arrow  Wellness incentives

Arrow  Network choices

Arrow  Consumer-driven health plans

Arrow  Blue Insights data and analytics platform

Arrow  New tools that increase levels of service to customers

Sharing what we’ve learned about costs

As a local company with deep roots in the community, we understand the challenge all businesses face in controlling employee healthcare costs. From 2004 to 2012, our own employee healthcare costs rose 56%. We knew that wasn’t sustainable, and recognizing our responsibility to lead change, we launched a multiyear plan to rethink our benefits strategy and deliver:

  • Commitment to high-value healthcare that delivers care at the right time and at the right place
  • Benefits structure that increases health plan value and employee control
  • Employee well-being through targeted programs and incentives

Since then, we’ve not only avoided projected increases but actually reversed our cost trend by 20%.

At the same time, we helped our employees make healthy choices through incentives and well-being programs. Almost 90% of BCBSRI employees have chosen a consumer-driven health plan that comes with a health savings account, allowing them to save for future medical expenses. Now we are sharing what we’ve learned to help employers throughout the state address changes in their own benefits strategies.



BCBSRI employee HSA savings

Leveraging technology and a local partnership

In 2017, our customers embraced our new wellness platform powered by Virgin Pulse®, which is available on their phones, tablets, computers, and wearable devices.

A full 80% of those who registered completed health risk assessments, and some employers, such as BankNewport, had more than 65% of their employees use the platform. Many members also earned financial rewards. 

251,019,529steps taken by BCBSRI members using the wellness platform in 2017

Carolyn Odell and Wendy Kagan, BankNewport

We’ve had walking competitions for years at BankNewport, but the new app makes it so easy. You can see your progress in real time. It makes wellness contagious.

Wendy Kagan (right), BankNewport executive vice president, director of employee and community engagement, and Carolyn Odell, BankNewport HR specialist

Offering a real-world way to compare costs

We continue to help members navigate the changing healthcare landscape and become better informed healthcare consumers. With our recent enhancements to My Cost Calculator, members can compare their total estimated out-of-pocket costs for more than 150 treatments.

They can compare costs by doctor/hospital or by different treatment options (for example, surgical vs. non-surgical treatments), as well as view an estimated timeline of treatment.

500%variance in costs for MRIs and CAT scans depending on the facility used

Cost Calculator

Helping members make informed health decisions

How do you choose the right health plan? Avoid overpaying for a medical test? Boost your spending power with a health savings account? In 2017, our members found the answers to those questions—and many more—in our member publication, The Rhode Ahead.

Through this print and online publication, members can find practical, easy-to-understand tips to help improve their health, save money, and make the most of their BCBSRI plan. Last March, we launched a new Rhode Ahead website just for our Medicare members.

95%of survey respondents* look forward to reading The Rhode Ahead or read it when they find the time

6 out of 10survey respondents* read it cover to cover or read most of the articles

1 in 3survey respondents* visit online content promoted in the print edition

*Results from a 2017 print and online readership survey

2017 Annual Report — Community (Section 5)



Investing in the health of all Rhode Islanders

We partner with results-oriented local nonprofits to make a meaningful impact.

Through our BlueAngel Community Investment Program, we’re proud to support nonprofits and projects that address community health, education, and access to quality care, with a focus on the uninsured and underinsured populations.

In 2017, we also continued to expand upon the work begun during our 75th anniversary year—investing in the health of our future, Rhode Island’s children.

Learn more about our efforts in the 2017 Community Investment Report.

Providence Skyline


2017 Community Investment by the Numbers


Organizations supported through in-kind donations, volunteerism, or financial support


Volunteer hours served


Value of volunteer hours*


Generated by employee fundraising


Invested by the company through financial or in-kind donations

*Source: Independent Sector

For more about our partnerships and programs, read our 2017 Community Investment Report.

2017 Annual Report — Financials (Section 6)

People in meeting


We are achieving stability despite uncertainty

Focus on managing costs reverses prior losses.

As described elsewhere in this report, our multiyear effort to improve the quality of healthcare while better controlling cost played a part in our ability to contribute $22 million (0.8% of operating margin) into reserves, money we set aside to pay future claims for the protection of all our members. However, the single greatest factor contributing to our 2017 financial results was a one-time investment gain of $10 million, which does not carry over into 2018. In keeping with our mission and commitment to our local communities, we enhanced programs and initiatives to improve our members’ experience and continue to work toward providing access to affordable, high-quality care.









Local economic impact in 2017


$300 million
in economic value to the state


Rhode Island suppliers used


$34 million
spent with local suppliers

We are proud to be a participating anchor for Governor Raimondo’s “Supply RI” initiative, which aims to increase local Rhode Island spend.

*Please note that this information is subject to change due to the Economic and Supplier Diversity Impact Study we are currently conducting.


In 2017, we recorded $1.72 billion in premiums from members (individuals and employers). We also earned $16.66 million in investment revenue.

Premium Revenue

+ $16,659,000
Investment Revenue

Total Revenue


From total revenue, $1.48 billion was used for medical and dental claims for our members. This amount accounted for 85.9% of premium revenue collected. The company spent $228.2 million on expenses to support the core operations of our business, or 13.3% of premiums. An additional $8.06 million was spent on other expenses, including $3.74 million on assessments required by the Affordable Care Act.

Payments to Providers

+ $228,199,000
Administrative Expenses

+ $8,059,000
Other Expenses

Total Expenses

Net Gain

Overall, total revenue stood at almost $1.74 billion, and expenses exceeded $1.71 billion in 2017, resulting in a net gain of $22.62 million.

Net Gain

Premium Reserves

In 2017, premium reserves that we held for the protection of our members totaled $293 million at year end.

Premium Reserves as of 12/31/2017

*This formulation represents unaudited results utilizing Statutory Accounting Principles. The Blue Cross and Blue Shield Association licenses Blue Cross & Blue Shield of Rhode Island to offer certain products and services under the Blue Cross and Blue Shield brand names. Blue Cross & Blue Shield of Rhode Island is an independent organization governed by its own Board of Directors and solely responsible for its own debts and other obligations. Neither the Association nor any other organization using the Blue Cross and Blue Shield brand names acts as a guarantor of Blue Cross & Blue Shield of Rhode Island’s obligations. A copy of Blue Cross & Blue Shield of Rhode Island’s most recent audited financial statements is available on request to: Blue Cross & Blue Shield of Rhode Island, 500 Exchange Street, Providence, RI 02903.