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BLUE CROSS POSTS 1ST-QUARTER GAIN, BUILDS RESERVES

 BLUE CROSS POSTS 1ST-QUARTER GAIN, BUILDS RESERVES
 CLEVELAND, May 27 /PRNewswire/ -- Blue Cross & Blue Shield of Ohio (BCBSO) is pleased to report solid financial performance for the first quarter of 1992. Financial results exceeded projections as reserves continue to grow after an outstanding financial year in 1991.
 The following figures are in terms of Generally Accepted Accounting Principles (GAAP):
 -- Reserves for the protection of policyholders increased 29 percent ($38.6 million) to $170.8 million at March 31, 1992, versus $132.1 million a year earlier.
 -- Net income was $3.8 million, versus a $26,000 loss for the first quarter in 1991.
 -- Income from BCBSO investments rose 2.6 percent to $4.6 million for 1992 versus $4.4 million in 1991.
 For the first quarter, net revenues (premiums earned) totaled $372 million in 1992 versus $351.1 million in first quarter 1991.
 "The great year we experienced in 1991 is carrying over into 1992," said Kent W. Clapp, BCBSO president and chief operating officer. "I don't know which is the more remarkable -- the fact that we ended the previous year with improvements of 29 percent in reserves or that we posted a gain in the first quarter of 1992. But also encouraging is the continued growth in total revenue."
 BCBSO, as a mutual insurance company, uses net income to build reserves for policyholder protection and to provide the best value for subscribers. There are no dividends paid out to shareholders or investors.
 Historically, health insurers experience underwriting losses during the first two quarters of the year. This is due in part to higher utilization of hospitals for elective inpatient procedures that were put off during the prior November-December holiday season.
 This time, those forces were more than offset by a combination of increased sales and favorable contract terms negotiated with hospitals, according to Ronald H. Rafal, BCBSO chief financial officer. He noted that there was also an improvement in the ratio of claims incurred to revenue.
 Other first-quarter highlights:
 -- President Bush affirmed Blue Cross' confidence in the free- market solution to the health care crisis in his health care policy address in Cleveland in February. He cited the expanded access and affordability of small-business health coverage promoted by BCBSO's largest customer, the Council of Smaller Enterprises (COSE), as a model for the nation.
 -- Blue Cross and COSE have reached a new, six-year agreement with rates increasing just 6 percent in the new rate year beginning July 1 and averaging less than a third of the increases in the Cleveland market. Similar small-business coverage in Toledo through the Toledo Area Small Business Association is scheduled to increase an average of just over 7 percent.
 -- BCBSO was named among the first 17 utilization review organizations to be accredited by the national Utilization Review Accreditation Commission based in Washington, D.C. -- the only major health insurer in Ohio to be so honored. About 90 percent of Blue Cross groups use BCBSO utilization review procedures, such as the Preview Managed Care program, in which health care providers are reimbursed only for medically necessary, quality care in appropriate and cost-effective settings.
 "Success in our business -- whether it's financial strength, cost- containment or customer satisfaction -- doesn't come easily," said Clapp. "But we are finding that commitment to quality, hard work and competitiveness does bring results."
 For further information or a copy of the quarterly financial statement, call Paula Slimak at 216-696-7750.
 -0- 5/27/92
 /CONTACT: David Eden or Paula Slimak of William Silverman and Company for Blue Cross & Blue Shield of Ohio, 216-696-7750/ CO: Blue Cross & Blue Shield of Ohio ST: Ohio IN: HEA SU:


BM -- CL020 -- 4393 05/27/92 16:07 EDT
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Publication:PR Newswire
Date:May 27, 1992
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