SYRACUSE -- Excellus BlueCross BlueShield (BCBS) and its parent health plan reported a $54 million net loss, or minus one percent on a premium base of $5 billion in 2008.

Health plan officials attribute the losses to higher-than-anticipated medical expenses, and poor performance on Wall Street causing health plan reserves, to drop by $329 million dollars to $858 million dollars at the end of 2008. Additionally, about $79 million dollars more in anticipated health benefits were paid out on behalf of members for 2008. A drop in enrollment of about 8 percent also contributed to the 2008 losses. 

Part way through 2008, Excellus BCBS began to take steps to curb administrative spending, including a temporary hiring and promotions freeze, an elimination of open positions and an early retirement incentive program that resulted in a reduction of nearly 530 positions or a 13 percent reduction from a fully staffed workforce. 

Other steps included reductions in travel, advertising and other expenses. Future pension benefits also were trimmed.

For 2009, BCBS will provide a minimum cost-of-living adjustment for most staff, but a freeze in base pay was put into effect for more highly compensated workers. Pay will significantly decline for all senior management in 2009, including the chief executive officer of the corporation whose compensation will be reduced by about 25 percent in 2009.

The health plan is the largest division of its parent corporation and employs more than 6,000 workers in about 30 locations throughout upstate New York.