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Minnesota Health Market Review 2020, Part Two

  • ID: 5233751
  • Report
  • January 2021
  • Region: United States
  • Allan Baumgarten
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Enrollment in Minnesota Medicaid HMOs Increased by 16.5% in 2020

FEATURED COMPANIES

  • Allina
  • Blue Cross Blue Shield
  • CentraCare
  • HealthPartners
  • Mayo Clinic
  • Sanford Health
  • MORE

Minnesota Health Market Review 2020, Part Two finds:

Health Insurers Report 16.5% More Medicaid Enrollees, Reduced Claims and Stronger Profits in 2020; Minnesota Hospitals Posted Continued Strong Net Income in 2019

Enrollment in Minnesota Medicaid HMOs increased by 16.5% in 2020, and health insurers saw lower claims and higher profits. Twin Cities hospital systems reported strong net income in 2019, 15.2% higher than in 2018.

Part Two of Minnesota Managed Care Review 2020 presents a new analysis of hospital and health plan finances based on data from 2019 and the first nine months of 2020. The author is a Minneapolis-based analyst who published his first Minnesota market analysis in 1990. He analyzes data from Medicare cost reports, health insurer quarterly and annual statements and other sources and shows some of the early impacts of the COVID-19 pandemic.

The report analyzes data for 31 hospitals in the Twin Cities area, including four in western Wisconsin that are part of Minnesota systems, and 51 hospitals serving communities in outstate Minnesota. It includes detailed data on financial results and inpatient utilization for the state’s major integrated delivery systems, including Fairview, Allina and HealthPartners in the Twin Cities and Mayo Clinic, Essentia, CentraCare and Sanford Health in outstate Minnesota. The health plan analysis uses quarterly statement data for the first nine months of 2020 to show the impact of the COVID-19 pandemic on insurers, including Blue Cross Blue Shield, UCare and HealthPartners.

The Report Found:

  • Even with a high number of COVID-19 hospitalizations, Minnesota health insurers reported lower medical expenses and higher profits in 2020. In the first nine months of 2020, the average medical loss ratio for Minnesota HMOs dropped from 91.8% to 88.5% and their average profit margin increased from 0.3% to 3.7%, compared to the same period in 2019. Other insurers, including Blue Cross Blue Shield and Medica Insurance Company, reported that their average medical loss ratio dropped from 80.7% to 77% and their average margin grew from 6.4% to 10.3%. Medicaid HMOs, including UCare and Blue Plus, added more than 138,000 members, an increase of 16.5%.
  • Twin Cities area hospitals reported net income of $603.2 million in 2019, or 5.3% of net patient revenues. That was 15.2% higher than their 2018 net income of $523.5 million (4.7% of net patient revenues). The HealthPartners hospitals, including Regions and Methodist, had the best results: $182 million in net income, or 10.7% of net patient revenues. The M Health Fairview hospitals saw their net income decline by half from $133.5 million in 2018 to $63.2 million. The system has since closed Bethesda and downsized St. Joseph, which had combined losses in 2019 of almost $50 million. Net income for the Allina Health hospitals in the Twin Cities dropped from $220.8 million 2018 to $148.8 million in 2019.
  • Led by the Mayo Clinic and Sanford Health systems, hospitals serving communities in Greater Minnesota reported combined net income of $1.502 billion, or 11.2% of net patient revenues. The Mayo Clinic hospitals in Minnesota reported net income of $943.9 million in 2019, up from $848.6 million in 2018. The Mayo hospitals in Rochester alone had net income of $949.1 million, or 33.4% of net patient revenues. The Sanford Health hospitals reported net income of $272 million, up from $222 million, while CentraCare, with eight hospitals across central Minnesota, had net income of $102.7 million, half of its 2018 net income. The Essentia hospitals reported combined net income of $89.5 million, about the same as in 2018. While some hospitals, including Altru in Grand Forks and the University of Michigan, have delayed major capital projects, Essentia is moving ahead with its $900 million Vision Northland project.
  • Inpatient hospital days increased for the second year at Twin Cities hospitals, though not at the hospitals outstate. Twin Cities hospitals provided 1.551 million inpatient days in 2019, up 2.5% from 2018. On an average day in 2019, 72.1% of inpatient beds at metro area hospitals were occupied in, up from 71.6% in 2018. Hospitals serving the Twin Cities provided about 8,600 more days to Medicaid recipients in 2019 compared to 2018.
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FEATURED COMPANIES

  • Allina
  • Blue Cross Blue Shield
  • CentraCare
  • HealthPartners
  • Mayo Clinic
  • Sanford Health
  • MORE

1. Introduction

2. Hospitals and Provider Systems

3. Twin Cities Area Hospitals and Systems

  • Revenues and Net Income
  • Occupancy and Payer Mix
  • Performance Bonuses and Penalties

4. Outstate Systems and Hospitals

  • Revenues and Net Income
  • Occupancy and Payer Mix
  • Performance Bonuses and Penalties

5. Health Plan Trends

  • Enrollment by Region
  • Utilization and Effectiveness of Care and Enrollee Satisfaction

6. A Look Ahead

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  • Allina
  • Altru
  • Blue Cross Blue Shield
  • Blue Plus
  • CentraCare
  • Essentia
  • HealthPartners
  • M Health Fairview
  • Mayo Clinic
  • Medica Insurance Company
  • Sanford Health
  • UCare
  • University of Michigan
Note: Product cover images may vary from those shown
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