QualChoice of North Carolina Inc. reported net income yesterday of $266,182 for 2001, its last full year of offering employer group coverage.

QualChoice, which is owned by N.C. Baptist Hospital Inc., will shut down its employer group coverage May 8 after losing millions of dollars over the years.

The division had difficulty competing with the larger, multistate insurance companies, said Hof Milam, the senior vice president for QualChoice.

QualChoice's Medicare Gold unit, which will remain open, did better last year, earning an operational profit of about $5 million, the company said.

The Medicare division's profit was partially offset by a $2 million loss in the employer-group section and one-time costs associated with a computer upgrade and with closing down the employer-group-coverage section, said David Patterson, the president and chief executive of QualChoice.

The Medicare division did well last year in part because of a 20 percent increase in reimbursement from the federal government for Medicare services, Patterson said.

"They struggled every year to come up with the right reimbursement for health plans, and going into 2001, I think it was not actually January but effective in March 2001, there was a substantial improvement in the reimbursement," Patterson said.

The financial earnings for 2001 confirm that it was a good idea to shut down employer-group coverage, Patterson said.

"We showed a nice profit, but we still showed a loss on the commercial part," he said. "Strategically it just made sense for us to exit the commercial market."

After years of losses, though, including an $11million loss last year, it was nice to see the company make a profit, Patterson said.

"We're very pleased. If you look at where we were back in 1997, the company reported a loss of $21.5 million. We've been working very hard over the past few years to at least break even, so it's very gratifying to make a profit in 2001."

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-- Anonymous, April 04, 2002