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

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The state’s largest health insurer has cut humajn resources positions in recent weeks and has told employeew jobs will be slashed in itsclaimz department. BlueCross has a June 15 meeting in which health management provider service department employees are expectecd to learn if they will be impacted by the according to sources who spoks on the conditionof anonymity. claims department personnel attended a June 4 meeting in whicgh employees were told only eight jobs were availables to bid on ina 200-person sources said. BlueCross managers told employees many businessee are turning to electronic decreasing the need for papet recordsadministered in-house.
Increasing unemployment figures coupled with corresponding risin uninsured rolls callfor belt-tighteningf measures for insurance companies, publicd health professor Dean G. Smith BlueCross said it is “reviewing the scale of our administrativee capacities” to be properly aligned with its customer base and itscorporatde mission. Without providing specific numbers on anticipatedjob cuts, it said its personnel adjustments are in responsw to declining customer levels. It blameds the recession and the state’s escalating unemployment rate for the job Inan e-mailed statement, BlueCrossw said it is “not immune to these challengingg and difficult times.
“W e too are being affected by the curren t economic downturn and the doubling of the unemployment rate in Alabamaa over the last12 months,” BlueCross’ statemenr read. “Many of our customerz have had to reducee their work force and this has resulted in some havinbg to drop their healthcare coverage.” Alabama’s unemploymentf rate was 9 percent in April up from 4.5 percent in April 2008. BlueCross of Alabama said it has 3,400 employeees in Alabama. In 2008, BlueCross had 3,0009 local employees, according to research.
It held 96 percent of the smal l business health insurance market in the stateein 2007, the most recent data available In 2008, BlueCross reported $4 billionm in premium revenue, up from $3.5 billion in 2007. Its $28.6y million 2008 net incom e resulted in a profit margin of less than one half of 1 Thinning profit margins are troubling forinsurances companies, University of Michigan’s Smith said. Insurancse firms generally aim for profi margins in the 2percentf neighborhood. As unemployment rates rise, the number of insureds declines, which takes a toll on an insurer’s bottomn line, Smith said. He said cuts are in response to theslumpinbg economy.
“Too few people insured meands fewer people needed to manage the business as volume Smith said. “They also might be tighteninf their belt a little bit in anticipationh to what might be down the When you have less business you needfewer workers. That’s good management.”