Highmark Health revenue up $1B

The parent company of Highmark Health insurance and Allegheny Health Network said Thursday its insurance business plans drove revenue in the first half of the year to $14.7 billion — up more than $1 billion from the same period last year.

Highmark Health also reported net income of $417 million — a $28 million increase year over year.

Strong financial performances of the company’s Highmark Health Plans, its United Concordia Dental and its Highmark insurance group helped to spur the increase in revenue, Highmark Health CEO David Holmberg said. The company’s revenue was up 8% from the same period last year.

Highmark Health’s diversified insurance business accounted for $12.2 billion of the revenue in the first half of the year. Highmark Health Plan was responsible for $11.1 billion of the company’s overall revenue — an operating gain of $304 million. The insurance plan added 30,000 members in the five-county area surrounding Philadelphia, Holmberg said. That increase in membership was better than expected.

Allegheny Health Network posted operating revenues of $2.58 billion for the first six months, up 8% from last year, but it lost $57 million, which was a smaller loss than last year’s $84 million. Patient volume is increasing, with inpatient visits and observations up by 3% from last year, outpatient registrations up by 6% and emergency room visits up by 7%, said Carl Daley, chief financial officer.

Brian Devine, CFO of AHN, attributed the operating loss to inflationary costs of supplies and the cost of paying agency nurses. AHN has addressed the latter problem by increasing its employee nursing staff by 800 people, Devine added.

Highmark Health plans to invest $1 billion in its flagship hospital, Allegheny General on Pittsburgh’s North Side, Holmberg said. It will add a new tower for comprehensive neurological services, expand its emergency services department to handle a significant increase in patients and invest in a new tower for cardiovascular medicine.

Highmark Health had a strong balance sheet with $11 billion in cash and investments at the end of the first six months, about the same as a year ago.