Highmark Health has reported significant financial results for the first nine months of 2024, showcasing $22.1 billion in revenue and $529 million in net income. While the organization celebrates growth in revenue and improved operating gains across its diversified portfolio, it is also addressing mounting industry-wide challenges, including rising prescription drug costs and Medicaid redeterminations.
Insurance Success Despite Industry Pressures
Highmark Health Plans generated $16.6 billion in operating revenue and achieved a $275 million operating gain. These results highlight resilience amidst increased healthcare utilization and rising costs of high-demand drugs like GLP-1s. Medicaid redeterminations added another layer of complexity, underscoring the industry’s broader challenges.
Carl Daley, CFO and treasurer, acknowledged these difficulties: “The third quarter brought intensified cost pressures, from surging drug prices to increased care utilization. These factors have impacted our operating gains, but our diversified business model gives us the flexibility to adapt.”
Allegheny Health Network: Patient Volumes on the Rise
Allegheny Health Network (AHN), a cornerstone of Highmark Health, reported a 9% revenue increase year-over-year, reaching $3.8 billion. While AHN posted an operating loss of $88 million, it marked a 39% improvement over the previous year.
AHN’s patient volume grew across the board:
- Inpatient discharges and observations rose 3%.
- Outpatient registrations increased by 7%.
- Physician visits saw a 5% uptick.
- Emergency room visits climbed 6%.
The rise in patient volumes reflects AHN’s focus on meeting community healthcare needs while navigating operational hurdles.
Diversified Businesses Bolster Stability
Highmark Health’s diversified operations added $3.1 billion to the enterprise’s consolidated operating revenue. United Concordia Dental contributed $1.3 billion in revenue and a $75 million gain. HM Insurance Group added $907 million in revenue with a $55 million gain. enGen, the company’s technology solutions arm, reported $879 million in revenue.
These divisions play a pivotal role in stabilizing Highmark Health’s finances, particularly as the healthcare sector grapples with rising costs.
Maintaining a Strong Financial Foundation
Highmark Health’s balance sheet remains solid, with $12 billion in cash and investments and $10.5 billion in net assets as of September 30, 2024. The organization credits its diversified portfolio for its ability to withstand financial headwinds while continuing to serve its members and patients.
Looking Ahead to 2025
As Highmark Health prepares for the upcoming year, it anticipates that cost pressures will persist. However, the company’s strategic approach, backed by its diversified revenue streams and focus on adaptability, positions it to meet these challenges head-on.
Daley remains optimistic: “Our broad range of businesses and market presence allow us to pivot as needed while maintaining a strong foundation for future growth.”
Headquartered in Pittsburgh, PA, Highmark Health employs over 44,000 people and serves millions across the United States. Its subsidiaries, including Highmark Inc., Allegheny Health Network, enGen, and Helion, collectively provide health insurance, healthcare services, and innovative business solutions.