After a year of strategic activity, the Pennsylvania-based provider maintained its financial performance, bolstered by Allegheny Health Network's continued growth.
Highmark Health posted nearly $9.4 billion in operating revenues, including a $502 million operating gain, which remained stable year-to-year, as the organization competes for growth in its market.
The Keystone State provider acheived a net income of $551 million for the first half of 2018, including a net investment income of $133 million, which is a $22 million increase year-over-year. Highmark also recorded $8.3 billion in cash and investments, generating more than $400 million since the end of 2017.
Related: Pennsylvania Players: Highmark and UPMC Continue to Battle
Highmark posted its financials for the first six months of 2018, which were marked by the announcement of a $1 billion initiative with Penn State Health as well as keeping pace with its primary competitor: UPMC. Both providers have been challenging each other through dueling business moves and mergers not only in the western Pennsylvania market, but across the entire state, too.
Related: Highmark-Penn State Health Embark on Strategic Partnership
Highmark executives praised the organization's earnings report during a conference call Monday morning, specifically the improved performance of Allegheny Health Network (AHN), which posted an operating income of $24 million, an 85% increase. Though the region's inpatient volumes fell during the first half of 2018, AHN saw its inpatient volume rise by 1%.
"Our financial performance and growth, combined with the recent rating upgrades from Standard & Poor's, AM Best and Moody's, clearly indicate that our strategy is working and we have succeeded in creating true competition and providing consumers with choice and access to high-quality, value-based health care in the markets where we operate," David Holmberg, CEO of Highmark Health, said in a statement.
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Despite its financial staying power, Highmark did witness a $13 million dip in its diversified business, as well as a $41 million decline in its commercial business.
Below are additional highlights from Highmark's first-half earnings report:
- Highmark Health's insurance division performed strongly, with the Highmark Health Plan achieving an operating gain of $443 million.
- The organization also showed gains of $288 million from its government business, which includes ACA, Medicare Advantage, and Medicaid membership.
- Highmark's net assets totalled $6.9 billion as of June 30.
Additional information is available in Highmark's official press release.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
KEY TAKEAWAYS
Highmark Health continues to see positive gains, primarily from Allegheny Health Network.
The investment in Penn State Health did not damage Highmark's balance sheet, actually improving corporate expenses by $12 million.
After an eventful start to 2018, the provider keeps pace in its competition for market share with UPMC.