Fallon Health reports record year for membership and financial performance

Results driven by strategic investments in government market, effective management of administrative expenses

Worcester, Mass., March 1, 2019 ― Fallon Health today reported membership and revenue totals for 2018 that are the highest in the 41-year-old history of the company. The results were driven by strategic investments in government programs and effective management of administrative expenses.

For 2018, Fallon Health had 271,369 members – an increase of nearly 24 percent over 219,112 members in 2017, and revenue of $1.6 billion – a 21 percent increase over revenue of $1.3 billion in 2017. Fallon’s net income of $6.9 million consisted of an operating gain of $1.6 million and investment and other income of $5.3 million. For 2017, Fallon’s net income of $7.9 million consisted of an operating loss of $7.6 million and investment and other income of $15.5 million.

“Over the past several years, during a time of change and uncertainty in the health care industry, our strategic investments in government programs and careful attention to administrative expenses have put us on a path of long-term sustainability that will allow us to advance our mission of making our communities healthy,” said Richard Burke, President and CEO at Fallon Health. “I am grateful for the hard and sustained work of our employees in getting us to this place. We will continue this momentum in 2019.”

For the fourth quarter of 2018, Fallon Health posted net income of $2.9 million on revenue of $414 million, which included an operating gain of $2.8 million and investment and other income of $.1 million. For the fourth quarter of 2017, Fallon posted an operating loss of $1.5 million, investment and other income of $6.9 million, revenue of $335 million, and net income of $5.4 million.

“Investments in government programs, including our MassHealth ACOs, have resulted in Fallon Health’s deliberate growth in the government market. In the past five years, government programs as a percentage of Fallon’s total membership have increased from 20 percent to nearly 50 percent. With a growing reliance on government programs among state residents, we see this market continuing to provide opportunities that Fallon is well positioned to support,” said Kevin Grozio, Senior Vice President and Chief Financial Officer at Fallon Health.
Investments made by Fallon Health include:

  • Launching three MassHealth Accountable Care Organizations (ACOs) to improve health outcomes by providing coordinated and patient-centered care in partnership with community providers.
  • The expansion into Berkshire County of Fallon’s Medicare Advantage product, Fallon Senior Plan™, and its Senior Care Options/Special Needs Plan (SCO/SNP), NaviCare®. Fallon is the only SCO/SNP option in Berkshire County for adults age 65 and older who want to maintain their independence with comprehensive, coordinated, patient-centered care.
  • Continued expansion of Summit ElderCare®, including a new site in Webster, MA. Summit ElderCare is a Program of All-Inclusive Care for the Elderly (PACE) designed to allow seniors to age in place at home by providing comprehensive, team-based care and support services.
  • Technology investments that have driven data analysis and enhanced provider collaboration, strengthening quality and value for members while efficiently overseeing administrative and medical costs.
  • The distribution of $1.4 million in grants, sponsorships, in-kind contributions and volunteer hours to fight hunger and support other causes addressing social determinants of health.

Melissa Cordial

About Fallon Health

Founded in 1977, Fallon Health is a leading health care services organization that supports the diverse and changing needs of those we serve. In addition to offering innovative health insurance solutions and a variety of Medicaid and Medicare products, we excel in creating unique health care programs and services that provide coordinated, integrated care for seniors and individuals with complex health needs. Fallon has consistently rated among the nation’s top health plans by the National Committee for Quality Assurance for its HMO , Medicare Advantage and Medicaid products.