Highmark Health posted a $268 million net loss through the first nine months of 2022 as multiple headwinds drag its finances.
Highmark reported $19.5 billion in revenue, up 22% year-over-year, and $594 million in operating gain. The performance of its equity investment portfolio is a key challenge facing the integrated system, as its financial report includes $670 million in unrealized investment impact driven by a decline in the portfolio.
Saurabh Tripathi, chief financial officer and treasurer of Highmark Health, told Fierce Healthcare that Hihghmark expects to turn that unrealized impact around as the market improves.
Other major headwinds include ongoing supply chain issues, inflation and high labor costs, particularly at its Allegheny Health Network health system. Strong performance at its health plan arm is helping to bolster AHN as it weathers these challenges that providers nationwide are staring down.
"This is where the strength of our portfolio comes in," Tripathi said. "The insurance side is helping offset those pressures."
While AHN navigates the tight labor market and inflation, patient volumes remained largely flat or increased slightly compared to 2021, according to the report. The system saw a 1% decrease in discharges and observations alongside a 12% increase in outpatient registrations, excluding vaccination appointments. Physician visits were up by 2% and emergency department visits by 10%. Births increased by 6%, the system said.
“AHN continues to address ongoing cost pressures related to supply chain, inflation and staffing demands. As a part of Highmark Health, AHN is uniquely able to navigate these challenges and make strategic, future-state decisions with the best interests of our communities and patients in mind,” said James Rohrbaugh, chief financial officer and treasurer of AHN, in the press release.
Highmark Health's total membership across its core health plan, United Concordia dental and other ancillary coverage tops 29 million, according to the report. Its main health plan boasts 6.8 million members, and it is the largest insurer in Pennsylvania, Delaware, West Virginia and western New York.
Highmark saw 98% commercial membership retention over the first three quarters, the insurer said. The health plan posted $600 million in operating on the back of its commercial and government products, according to the report.