When Fidelis Care New York bought Buffalo-based Better Health Plan in 1997, the health insurer had to decide whether to maintain a presence here or consolidate operations at its New York City headquarters.
Fidelis Care opted to commit to Western New York, where the company has moved twice since 1997 in search of larger space and now is planning to double the size of its CrossPoint Business Park facility.
The company has 700 employees here and plans to add nearly 400 more as part of its latest growth spurt in Getzville, where employees in information technology, claims processing and a clinical quality program serve the entire state.
“The backbone of our operations is in Western New York,” said the Rev. Patrick J. Frawley, president and CEO of Fidelis Care, which was founded by Catholic bishops to serve the state’s poor with a focus on government-sponsored programs.
Buffalo Niagara is home to the headquarters – or a major back-office facility – of five health-insurance companies, including Fidelis Care, and the insurance industry is a key piece of the regional economy.
Their workforces have grown over the past year, as the push to digitize health records has required an investment in upgraded information systems and as the companies have sought to comply with the Affordable Care Act.
But the insurers say their biggest effect on the local economy will grow from their ongoing efforts to keep members healthier while keeping the high costs of health care in check.
“Our most important role in the local economy is to use all of our resources to help better manage the quality and the cost of health care,” said Dr. Michael W. Cropp, the president and CEO of Independent Health.
BlueCross BlueShield of Western New York has the biggest share of the health insurance market here and the largest local workforce, with 1,300 employees here out of about 1,830 company-wide for parent HealthNow New York.
The company in 2007 moved into a new headquarters on a 5-acre former brownfield site downtown, a sign of its commitment to the city, said David W. Anderson, HealthNow’s president and CEO since July.
Anderson said with 1½ floors of vacant space in the building, the company has sufficient space to accommodate the work force for the near future, though he said major business projects now coming online in Buffalo could boost membership and spur hiring. “As Buffalo’s beginning to grow back the other way, and have some positive momentum, we would expect to grow with them,” Anderson said.
The company has more than 100 positions open, most in information technology and nursing, said Melissa Tucker, BlueCross BlueShield’s vice president for human resources.
Generally, she said, the company has found in Western New York the talent it needs. “Sometimes it takes longer, but we diligently look. Sometimes we go outside, but local is always our first choice,” Tucker said.
Independent Health, with the second-largest membership base in the local market, has about 1,100 employees in the region, most at its headquarters complex in Amherst.
Five years ago, employment was closer to 900, Cropp said, and the insurer has hired employees to manage and analyze digital medical information, to comply with the Affordable Care Act and to beef up the insurer’s care-management team.
Employment by the end of 2014 likely will decline as a major project to upgrade Independent Health’s computer network is completed, he added.
Univera Healthcare is the smallest of the Big Three local insurers, with 510 local employees, though its parent company, Excellus Health Plan in Rochester, has about 3,500 employees.
Buffalo Niagara is the largest market in which Excellus sells insurance, but it’s the region where Excellus has the smallest market share.
“This is the biggest opportunity for growth for the organization,” said Art Wingerter, Univera’s president. “That said, there’s more competition in Western New York than there is in the other regions.”
Wingerter pointed out that Univera and the other major insurers here spend millions of dollars with printers, food-service companies, office suppliers and cleaning companies, among other vendors.
Fidelis opened its current offices in CrossPoint Business Park a little over two years ago, and it now has 700 employees in 90,000 square feet there.
The company in October revealed plans for an 87,737-square-foot addition, with the promise of 385 new jobs paying an average of $53,000 per year. The Amherst Industrial Development Agency in October awarded the project $2.5 million in tax breaks.
Work has already begun on a parking lot, and construction on the $16.5 million building should be finished within a year.
Fidelis will spend $10 million to outfit the structure, which includes a first-floor data center.
UnitedHealth Group, the nation’s largest insurer, has an office in the Town of Tonawanda, where employees take customer-service calls, process claims and perform other duties.
UnitedHealth entered the local market in 2005, after acquiring Definity Health, which had 340 employees in the area then.
That same year, the former Definity Health workers moved into new offices on Colvin Woods Boulevard, where UnitedHealth has 800 employees.
EmblemHealth, the largest nonprofit health insurer in the metro New York City area, started a push into the Buffalo and upstate New York markets in fall 2012. The company has a sales office in downtown Buffalo, though an EmblemHealth spokeswoman declined to say how many people work there.