Blue Cross left in the red after virus outbreak
Insurer hit with $32m loss in quarter
The final financial toll of an outbreak of a stomach virus last winter has been tallied at Blue Cross and Blue Shield of Massachusetts. The state's largest health insurer yesterday reported a first-quarter loss of $31.9 million, compared to an $11.5 million profit a year ago, blaming a norovirus that led to a spike in healthcare costs.
The nonprofit had an operating income loss of $57.2 million, which was partially offset by investment revenue profit of $27.3 million. Blue Cross, with 3 million subscribers, collected $1.7 billion in premiums and paid out $1.6 billion in claims during the quarter.
Federal scientists in March determined that a new strain of norovirus was responsible for a wave of gastrointestinal infections that overwhelmed hospitals, nursing homes, and college dormitories across New England and the nation last winter.
"The high medical costs, attributed to a regional outbreak of a gastrointestinal virus, combined with seasonal increases in healthcare costs related to the flu and discretionary services, represent an unusual increase in cost trend," said Allen Maltz, Blue Cross chief financial officer. Maltz added that he doesn't expect the trend to continue throughout the year.
Unlike Blue Cross, the state's other large health insurers, Harvard Pilgrim Health Care and Tufts Health Plan , did not attribute any change in their financial performance to the unusual increase in norovirus cases.
Harvard Pilgrim reported a profit of $7.0 million on revenue of $605.0 million for the first quarter, compared with a $15.3 million profit on revenue of $602.1 million for the same quarter last year.
Tufts reported a profit of $668,000 for the quarter on revenues of $500 million. That compares to a profit of $1.3 million on revenue of $445 million for last year's first quarter.
Harvard Pilgrim had 1,008,000 members at the end of the quarter, up from March 2006 membership of 932,000. Tufts had 635,000 members, compared to 604,000 in March 2006.
Fallon Community Health Plan , based in Worcester, reported profit of $3.3 million on revenue of $226.5 million in the first quarter, compared to a $4.9 million profit on $214 million in revenue a year ago.
Christopher Rowland can be reached at crowland@globe.com. 
