Highmark Health reports $64M operating surplus on strong health plan performance

Pittsburgh-based Highmark Health, the parent company of insurer Highmark and Allegheny Health Network in Pittsburgh, posted operating revenue of $18.2 billion in 2016, up 3 percent from revenue of $17.7 billion in the year prior.

Highmark Health said the financial boost was primarily attributable to higher patient volumes at Allegheny Health Network facilities, growth in Medicaid business and strong health plan performance.

The company's health plan division reported an operating gain of $242 million in 2016, up from an operating loss of $438 million in the year prior. Highmark said this growth was largely attributable to its government — small group, Medicare and Medicaid —and commercial health plan business.

On the provider side, Allegheny Health Network's operating loss widened to $39 million in 2016 from $36 million in 2015. Highmark said AHN benefitted from higher patient volumes last year, but capital investments in AHN's facilities, physician organization and technology, including the Epic platform, drove the hospital network's operating loss in 2016.  

Although AHN's financial performance didn't improve year over year, Highmark Health Executive Vice President and CFO Karen Hanlon said AHN's annual loss has significantly narrowed since it became affiliated with Highmark in 2013.

Highmark Health ended 2016 with operating income of $64 million, up from an operating loss of $565 million in the year prior.

"We began the year determined to improve our financial performance and break new ground in fulfilling the promise of our integrated delivery and financing system," said David Holmberg, president and CEO of Highmark Health. "We continue to increase our scale, we are financially strong and stable, and we maintain our leading positions in the markets in which we compete."

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