As HealthPartners has gotten bigger in recent years, the nonprofit group says it hasn’t used its size to make health care less affordable.
That was the message Tuesday from Mary Brainerd, chief executive of Bloomington-based HealthPartners, in a speech to more than 600 people gathered for the nonprofit group’s annual meeting in St. Paul.
Compared to a regional benchmark, total cost of care has been declining within the old Park Nicollet system since it merged into HealthPartners in 2013, Brainerd said.
Meanwhile, clinics operating under the HealthPartners brand, she said, have become slightly more affordable.
“When we came together three years ago, the question was: Are you going to just jack up prices and try to take advantage of being more consolidated in the market,” Brainerd said in an interview.
“At the time, the total cost of care position for Park Nicollet was a little higher, and so it’s come down,” she said. “We’re really happy with that. And we’ve come slightly down in HealthPartners.”
Rival health insurers did not comment on the assertions.
In 2015, HealthPartners posted income of $103.4 million on $5.74 billion in revenue — less profit than the $198.2 million posted for 2014.
Income declined primarily because of a one-time $67.2 million charge in 2015 that will lower borrowing costs in future years.
HealthPartners’ income from its health insurance business was up last year, but patient care profit was down due primarily to the one-time charge for refinancing debt at some of its hospitals and clinics.
The nonprofit runs Methodist Hospital in St. Louis Park, Regions Hospital in St. Paul and Park Nicollet clinics that operate across the Twin Cities.
The profit margin of 1.8 percent was down from 3.6 percent in 2014. But after backing out the one-time charge, the 2015 results were more in line with past performance, said Kathy Cooney, chief administrative officer.
“Overall our financial performance was solid in 2015 and in line with what we want our bottom line to be in the 2 to 3 percent range when adjusted for the one-time refinancing charge,” spokesman Vince Rivard wrote in an e-mail. “Investment income was also down from $52.6 million in 2014 to $29.1 million in 2015, or $23.5 million with lower equity returns in 2015.”
The impact of the Park Nicollet merger shows up in HealthPartners’ financials. Before the merger in 2012, the nonprofit had revenue of about $4 billion.
That grew to $5.2 billion in 2013 with the merger, which brought Methodist, numerous clinics and Tria Orthopaedic under the HealthPartners umbrella.
On health costs, some have questioned why HealthPartners and Tria are building a $48 million surgery center in Woodbury where other large orthopedic groups practice. In an interview, Brainerd said there’s plenty of room for Tria in the growing east metro market.
“We’ve got the demand … to warrant another site,” she said. “It’s the fastest-growing part of health care, particularly because of the aging population.”
During the annual meeting, Brainerd said HealthPartners and other health systems still have a lot more work to do to control costs.
During the third quarter of 2013, Park Nicollet’s total cost of care was about 4 to 5 percent higher than the statewide average, according to data presented Tuesday.
Park Nicollet’s costs were about average by the third quarter of 2015, at which point costs at HealthPartners clinics were about 5 to 6 percent below average. To get an outside perspective, HealthPartners hired the Optum division of Minnetonka-based UnitedHealth Group to provide national context for its costs.
The report shows that HealthPartners is more affordable than other providers in the state or nation, Brainerd said, although she joked during the annual meeting about the data source.
“Can you believe it?” she asked. “We hired UnitedHealthcare.”
“I want to be honest and say: I know it’s not good enough for you yet,” Brainerd said. “But I do want you to know: We’re measuring it, we’re working on it, we’re having results.”