Highmark Health reports $174M in net losses during first half of the year

Pittsburgh-based health care giant Highmark Health on Tuesday reported a net loss of $174 million during the first six months of the year, driven by steep investment losses.

Highmark Health reported $12.9 billion in revenue during the first half of the year, up 25% over the same period a year ago. It also reported an operating gain of $387 million.

But the company reported that it also suffered a $460 million decline in its investment activity during the first half of the year.

“We reported strong financial performance across the first half. However, we were not immune from the many financial headwinds that the industry is facing,” said Highmark Health President and CEO David Holmberg.

During a call with reporters, Holmberg said he was upbeat about Highmark Health’s financials during the first half of the year. He said Highmark Health “weathered the storm” as issues such as stock-market losses, labor shortages, supply-chain issues and inflation continue to plague the health care industry.

Saurabh Tripathi, chief financial officer of Highmark Health, said the company’s investment strategy will remain unchanged, despite the losses.

“Highmark has a very strong investment portfolio and we are a long-term investor,” said Tripathi.

The Highmark Health system employs more than 37,000 people across the country, with the strongest concentrations in Pennsylvania and elsewhere in the Mid-Atlantic region. Highmark Health is the parent company of Allegheny Health Network, enGen and the health insurer Highmark Inc.

The Highmark Health Plans reported an operating gain of more than $450 million for the first six months of the year, down just $30 million compared to the first half of last year. Increased in membership helped to drive operating gains from Highmark Health Plans, United Concordia Dental and HM Insurance Group.

Tripathi said the slight decrease in operating gains from Highmark Health Plans compared to last year was caused by health insurance customers visiting health care facilities more often this year and patient volumes increasing across the network.

Allegheny Health Network, which operates 14 hospitals across the region, saw patient volume increase, especially for emergency room visits and outpatient registrations.

AHN suffered a $71 million operating loss for the first half of the year before interest, taxes, depreciation and amortization were factored in. The regional health care provider continues to struggle with labor shortages and supply-chain issues, Tripathi said.

Cynthia Hundorfean, president and CEO of Allegheny Health Network, said AHN is placing additional emphasis on hiring nurses for its hospitals and will be increasing staffing, particularly for bedside patients.

She said the nursing shortage issue is improving and AHN has been able to retain nearly all of its recent graduates from its two local nursing schools.