Highmark Health reports $6.4 billion in revenue and $100 million operating margin gains in first quarter 2022

News provided by

May 31, 2022, 11:05 ET

Strong performance for Highmark Health Plans offset challenging first quarter for Allegheny Health Network
$150 million net loss driven by lower equity market performance

PITTSBURGH, May 31, 2022 /PRNewswire/ -- Highmark Health today announced consolidated financial results for the first three months of 2022, reporting $6.4 billion in revenue, an operating gain of $100 million, and a net loss of $150 million, which includes more than $200 million decline in equity portfolio value.

These results are due to the solid performance of most business units, notably Highmark Health Plans, driven by favorable claims, and strong results in its diversified businesses due to continued positive performance in United Concordia Dental and HM Insurance Group. Allegheny Health Network (AHN) experienced relatively flat year-over-year patient volumes and continued cost pressures related to supply chain challenges, inflation, and higher labor costs.

Highmark Health maintained a strong balance sheet with nearly $12 billion in cash and investments and net assets of nearly $10 billion as of March 31, 2022.

"Highmark Health's diversified business model is key to our financial strength and stability. The first quarter tends to be one of AHN's slower quarters financially, but this is typically balanced by strong health insurance performance during the same period. Overall, Highmark Health delivered strong financial performance for the first three months of 2022," shared Saurabh Tripathi, chief financial officer and treasurer of Highmark Health. "These strong results are driven by positive operational performance in our insurance businesses, where the addition of Highmark Wholecare strengthened our results. Our financial strength positions us well to continue investing in our Living Health model."

"Like other not-for-profit health care providers across the country, AHN is facing ongoing cost pressures related to staffing, inflation, supply chain, and continuing COVID-19-related impacts, which we are proactively addressing through our operational and enterprise strategies," explained James Rohrbaugh, chief financial officer and treasurer of AHN. "Foundational to our strategy is supporting and investing in our team members to address the current staffing challenges, including making significant financial investments in wages, benefits and incentives. Operationally, we are offering flexible work hours and hybrid positions, creating new care models and expanding the capacity of our AHN Schools of Nursing. We are confident the work we are doing supports our team members as well as the patients and communities we serve."

The Highmark Health Plans reported an operating gain of more than $150 million for the first three months of 2022, primarily driven by strong performance in the commercial and government business and favorable claims development.

Highmark's diversified businesses reported combined earnings of more than $50 million through March 31, 2022.

United Concordia Dental continues its strong performance, delivering an operating gain of $35 million for the first quarter of 2022. Highmark Health's stop loss business, HM Insurance Group (HMIG), reported an operating gain of $18 million.

enGen, formerly known as HM Health Solutions (HMHS), Highmark Health's information technology services company whose platform serves approximately 11 million lives across the country, reported strong financial results in the first quarter 2022 driven by higher platform enrollment and demand to support client projects.

AHN experienced losses before interest, taxes, depreciation, and amortization of $67 million for the first three months of 2022, as rising labor and supply chain costs offset stable patient volumes. It reported operating losses of about $100 million for the period ending March 31, 2022.

For the first quarter of 2022, patient volumes remained relatively flat compared to the same period of time in 2021, with a 2 percent decrease in discharges and observations, a 14 percent increase in outpatient registrations excluding vaccination appointments, a 4 percent increase in physician visits, and a 17 percent increase in emergency room visits. Births also increased nearly 7 percent across the network compared to first quarter 2021.

About Highmark Health
Highmark Health, a Pittsburgh, PA-based enterprise that employs more than 37,000 people who serve millions of Americans across the country, is the parent company of Highmark Inc., Allegheny Health Network, and enGen. Highmark Inc. and its subsidiaries and affiliates provide health insurance to approximately 6.8 million members in Pennsylvania, West Virginia, Delaware and New York as well as dental insurance, and related health products through a national network of diversified businesses. Allegheny Health Network is an integrated delivery network comprised of 14 hospitals, more than 2,500 affiliated physicians, ambulatory surgery centers, an employed physician organization, home and community-based health services, a research institute, a group purchasing organization, and health and wellness pavilions in western Pennsylvania. enGen's dynamic ecosystem of smart automation, and technology supports and streamlines complex operations for health plans and their provider partners. Founded in 2014 as HM Health Solutions (HMHS), enGen is a wholly owned subsidiary of Highmark Health. enGen has more than 3,500 employees and works with health care plans serving 11 million members nationwide. To learn more, visit Engen.health. Lumevity, a wholly owned subsidiary of Highmark Health, helps companies transform in ways that drive direct financial benefits while improving quality and increasing employee engagement. To learn more, visit www.highmarkhealth.org.

SOURCE Highmark Health