How Highmark Health Achieved 9% Year Over Year Revenue Growth to $22.1B

What can CFOs learn from Highmark Health’s positive results?

Highmark Health has announced its consolidated financial results for the first nine months of 2024, reporting $22.1 billion in revenue, $529 million in net income, and $273 million in operating gain.

The results come from several diversified businesses within Highmark Health, including Highmark Health Plans, Highmark Health’s provider network Allegheny Health Network (AHN), United Concordia Dental and HM Insurance Group.

This positive operating performance, driven by steady membership and increased patient volumes across all delivery areas, allowed Highmark Health to maintain a strong balance sheet, with $12 billion in cash and investments and net assets of $10.5 billion by September 2024.

Highmark Health Plans: Utilization and Cost Challenges

Highmark’s 2024 financial success was driven by steady membership in both government and commercial businesses. Highmark Health Plans reported $16.6 billion in operating revenue and $275 million in operating gain year-to-date through September 2024.

Highmark Health Plans reported better-than-expected commercial membership enrollment in the southeastern Pennsylvania region following its entry in the market. Despite this, the organization faced headwinds and cost pressures from rising health care usage, continued effects of Medicaid redeterminations, and high prescription drug costs, particularly GLP-1s, according to Highmark Health CFO Carl Daley.

Allegheny Health Network (AHN)

Allegheny Health Network reported 9% total revenue growth and improved EBITDA year-over-year. During the first six months of 2024, AHN saw patient volumes rise, as they had done year-over-year. According to Allegheny Health CFO Brain Devine, a few different strategies went into this.

“We’re moving efficiently from agency staff to investing in our clinical resources,” he said in an interview with HealthLeaders. “Even with the IV shortage that's been happening, working through those types of items has allowed us to determine the right clinical protocols and standardize supplies. That's allowed us to fully maintain safety while managing our spend at a different level.”

Patient Volume Increases

• Inpatient discharges and observations increased 3%
• Outpatient registrations increased 6%
• Physician visits increased 4%
• Emergency room visits increased 7%

Diversified Businesses

Highmark Health's diversified businesses brought in $3.1 billion in consolidated operating revenue through September. 2024.

• United Concordia Dental reported $1.3 billion in operating revenue and $75 million in operating gain.
• enGen reported $879 million in operating revenue.
• HM Insurance Group (HMIG) reported $907 million in operating revenue and $55 million in operating gain.

Executive Take

Part of Highmark’s 2024 success involved higher-than-average patient volumes stemming from increased efforts to drive access within the network.

“On the provider side, we’ve continued to drive access to locations throughout the community, to improve the health and wellbeing of the members that we serve,” said Daley.

Working with the states for appropriate reimbursements is a part of the plan, he says. Continued efforts to drive access, and technology improvements will be the two driving forces behind Highmark Health’s ‘living health strategy.’ said Devine.

Outlook and Guidance

While Highmark Health saw a positive operating gain, Daley said he expects cost pressures that affect commercial, Medicaid and Medicare Advantage customers will continue.

While some health system balance sheets are looking stronger than others, CFOs should expect more unpredictability around cost pressures in 2025. With a new administration underway, CFOs must come prepared with new, tailored strategies to protect the financial health of their organization.