Higher patient volume, insurance enrollment helps hike Highmark Health's revenue to $6.7B in Q1

Editor's note: This story previously inaccurately referred to Highmark as the largest insurer in New York state. It has been updated to reflect the correct information.

Despite having to weather inflation, staffing shortages and interruptions in its supply chain, Highmark Health’s revenue grew 5.6% in the first quarter of 2023 to $6.7 billion, mostly because of a 2.5% increase in health insurance enrollment and higher patient volume at its Allegheny Health Network arm.

The Pittsburgh-based payer-provider organization also saw an operating gain of $136 million and net income of $227 for the first quarter of 2023, according to its first-quarter earnings report. The company maintained $11 billion in cash and investments and net assets of more than $9 billion.

James Rohrbaugh, AHN’s chief financial officer, told Fierce Healthcare that the nursing shortage will most likely remain a major staffing challenge throughout the year “because it really does affect our ability to provide care.”

However, staffing shortages exist in other areas as well, such as radiology, said Rohrbaugh. He hopes that forging closer ties with teaching institutions might help address staffing needs. “There’s lots of focus on education partnerships on how we continue to make sure that we’ve got the right educational pipeline folks available for all our positions,” said Rohrbaugh.

AHN’s earnings came to $47 million before interest, taxes, depreciation, and amortization in the first quarter, and it reported revenue of $1.2 billion for the period ending March 31, 2023.

Rohrbaugh said some of the increase in volume springs from patients who had to put off care because of the COVID-19 pandemic but also represents a return to the normal ebb and flow of preventive care.

“I think it’s a little bit of both,” Rohrbaugh said.

“We opened up neighborhood hospitals,” Rohrbaugh added. “We opened up a new outpatient center. We continue to stay very focused on making sure the community has access to the services they need.”

Individuals desiring to pursue preventive health and elective procedures need to have access to providers, and Highmark Health's position as a healthcare provider and payer better facilitates that access to care, Rohrbaugh added. “We’re focused on making sure that our integrated system transforms the delivery of care.”

In addition to the AHN provider group, Highmark Health includes the payer businesses Highmark Health Plans, United Concordia Dental and HM Insurance Group.

United Concordia Dental saw an operating gain of $19 million for the first quarter. Highmark Health’s stop-loss business, HM Insurance Group, also reported an operating gain of $19 million for the same period.

Highmark Health’s broad reach in healthcare includes subsidiaries and affiliates that provide health insurance to approximately 7 million members in Pennsylvania, West Virginia, Delaware and western New York.

In a Q&A with reporters during the earnings call, Janine Colinear, the company’s senior vice president and interim chief financial officer and treasurer, was asked whether Highmark Health stands as the largest health insurer in each of those regions and by what yardstick.

“It does mean that it is the largest health insurer in each of those locations, and it’s by membership,” Colinear said.

Highmark Health’s information technology services company, enGen, serves millions of lives across the country and reported technology-related revenue for the organization reached approximately $300 million.

Colinear told Fierce Healthcare that technology—including AI—offers exciting opportunities for the company to provide better care, “but we have nothing to report on with any specificity," she said.

"We are definitely leveraging technology in many ways in the provider space. We talked about some of the challenges with labor. Technology becomes an important way for us to be able to make resources available. Certainly, during the pandemic, we leveraged a lot of virtual visits and continue to leverage virtual visits. We have areas where technology is an important strategy around care delivery," Colinear said.