Highmark's Allegheny Health Network posts $116M in losses in first half of 2020 as volumes skid due to COVID-19 

A photo of Highmark's headquarters in Pittsburgh
Highmark Health released its mid-year financial results on Thursday. (Randy Tarr Photography/Shutterstock)

After 11 straight quarters of reporting positive earnings, Highmark’s Allegheny Health Network (AHN) saw million in losses in the first half of the year due to COVID-19. 

Based in Pittsburgh, AHN is a 12-hospital academic medical system that makes up one of the largest health providers in western Pennsylvania. 

The health system reported $116 million in losses through June 30 as patient volumes plummeted amid the pandemic, executives at Highmark Health said Thursday. AHN's operating loss represents a decline of $136 million from the first half of 2019. 

Over the first six months of 2020, AHN’s discharges and observations decreased by 13%, emergency department visits by 11% and outpatient registrations by 12%. 

In addition, hospital surgical cases decreased by 17% and visits to ambulatory surgical centers decreased by 28%, according to Highmark. 

CEO David Holmberg said on a call with reporters Thursday that volumes have climbed back to near pre-pandemic levels of late, however, “our front lines continue to wage war against this invisible COVID-19 enemy.” Volumes increased substantially in July, Highmark said. 

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As in-person volumes decreased, telehealth visits increased dramatically in tandem, according to Highmark. Pre-pandemic, AHN was conducting about 50 telehealth visits a day—at the peak of the pandemic, that reached 20,000 per day. 

Holmberg said that Highmark has overall covered 1.2 million telehealth visits so far this year, with 97% provided by local physicians. 

While AHN faced significant financial difficulties in the first half of the year, Highmark’s health plan performed strongly by contrast—making the company a microcosm in the broader financial trends in the health industry over the past several months. 

Highmark Health Plan reported $609 million in operating gains over the first half of 2020, buoyed the performance of its commercial and government business segments. Health plan membership was “steady” with about 5.6 million members across its markets in Pennsylvania, Delaware and West Virginia. 

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Highmark’s United Concordia dental insurance arm brought in $193 million in operating gain, and its stop loss business, HM Insurance Group, earned $32 million in operating gain. 

Holmberg said Highmark is focused moving forward on harnessing all its business lines to “reinvent the healthcare system. 

"We are going to focus on doing the remarkable on behalf of the customers we serve,” he said.