Eighteen months into his tenure as president and CEO of Pittsburgh-based Allegheny Health Network, Mark Sevco has presided over a financial recovery that transformed the system’s operating position in two years.
In 2024, AHN recorded a $140 million operating loss. In 2025, the system posted a positive $100 million operating margin — a $240 million improvement in 12 months. With a $160 million positive operating margin projected for 2026, AHN is on pace for a $300 million turnaround over two years.
Mr. Sevco noted that the second quarter of 2026 benefited from approximately $130 million in Federal Emergency Management Agency funding, reimbursement for expenses incurred in prior years. The operational gains underlying the broader turnaround, he told Becker’s, trace to three areas the system addressed from the start.
Mr. Sevco’s first move was the leadership team. AHN added leaders at multiple levels, drawing from internal promotions and external recruitment. Cultural engagement scores rose across every category over the past year. He describes a flywheel effect: investment in leadership driving engagement, which carries through to patient experience, quality and financial performance.
On top-line revenue, AHN focused on access and patient volume.
“We have grown top-line revenue quite a bit organically by focusing on growth, new patient volume, and actually a culture of ‘yes’ for patient care that has led to about a 15% increase in transfers,” Mr. Sevco said. “Our volumes are up somewhere in a range of 3% to 4% across every indicator from prior year, and so from that perspective, that organic growth has really helped us grow into some of the fixed assets that we have.”
The third area was benchmarking and standardization. AHN reviewed performance across every operational indicator and targeted best-in-class practice on staffing, clinical productivity and supply chain. The work produced approximately $40 million in improvements across the health system’s supply chain and revenue cycle.
“Operational excellence is looking at reducing variability and hardwiring best practices,” Mr. Sevco said. “When you reduce variability and you move to hardwiring, what I’ve seen through my experience in working is that that tool in the toolbox allows the organization to perform at a higher level and produce stronger, consistent results.”
If a peer health system leader asked how to replicate the results, Mr. Sevco said his answer starts with leadership. After building the right team, he recommends assessing the competitive landscape and positioning existing assets for growth, then pursuing margin improvement through systematic use of industry benchmarks.
“The benchmarks allow us to understand exactly where we fall in any categorical area because most data is publicly reported, shared, accumulated and then pushed back,” he said. He frames the approach as a focus on culture, growth and innovation, and disciplined finances with operating rigor.
The Highmark relationship and what comes next
A structural factor few systems share is AHN’s integration with Highmark Health, its parent company. AHN’s total revenue is close to $7 billion, with roughly 50% coming from Highmark. Primary care physicians operate under value-based compensation arrangements, managing patient panels with wraparound services designed to keep patients well and lower the total cost of care. Investment decisions — where to grow, where to build — are made jointly, guided by where Highmark’s insurance products are sold and where AHN needs to be present.
In July, AHN completed an affiliation with Beaver, Pa.-based Heritage Valley Health System, bringing its hospital count to 16. Of a $285 million, seven-year commitment to Heritage Valley, about $100 million is earmarked to bring the health system onto AHN’s platforms, with Epic as the centerpiece — with a go-live targeted for October 2027. Integration in the first 90 days has focused on back-office functions — finance, HR, operations, IT and digital — with physician recruitment and sharing underway across the expanded network.
Looking ahead, Mr. Sevco said population health leadership is AHN’s defining ambition.
“Allegheny Health Network has an ambition to be an industry leader in population health, and we have a unique opportunity in the market that we have to be able to accomplish that,” he said. “As we are working hand in glove with Highmark Health, the future of value-based medicine is very important for us to be a leader in that space in that we will focus on access, quality and cost, with a tremendous amount of laser focus on best practices and lowering the cost curve, so that we can be sustainable again, more affordable for patients and for consumers and for our employers, but without sacrificing quality or patient experience or access.”
