Highmark Health Reports 24% YOY Increase in Revenue for Mid-Year Earnings

Yet labor issues, supply chain challenges, and growing expenses hurt the financials of Highmark's health provider.

Highmark Health—a company that provides healthcare services (through affiliates) and health insurance to 6.8 million people in Pennsylvania, West Virginia, Delaware, and New York—announced its 2022 mid-year financial results, reporting a 24% year-over-year increase in revenue and $387 million in operating gains for the first six months of this year.

Highmark Health attributes its strong performance to its insurance business units. Overall, Highmark Health reported $12.9 billion in revenue and a net loss of $174 million, which includes a $460 million decline in unrealized equity market performance. Highmark Health's balance sheet remained strong with $11 billion in cash and investments and net assets of $9.7 billion as of June 30, 2022.

"Despite the challenging economic environment, we continue the strong fiscal discipline, and as a result of that, our long-term debt to capital ratio remained low at approximately 18%," Saurabh Tripathi, CFO for Highmark Health said during the company's mid-year financial performance conference call. "Rating agencies have taken note of our steady financial performance and our ability to overcome challenges and [produce] a very strong balance sheet."

However, the organization's health provider network, Allegheny Health Network, struggled during the first half of the year as cost pressures such as labor and supply chain issues continue to plague the healthcare space. Allegheny Health Network reported losses before interest, taxes, depreciation, and amortization of $71 million for the first six months of 2022. A rise in patient volumes was not enough to offset those costly pain points. Allegheny Health Network reported revenue of $2 billion for the period ending June 30, 2022.

"We have comprehensive organization-wide strategies in place to address these pressures," Tripathi said on the call. "And as we shared earlier this year, we anticipate challenges at AHN will continue at least through the end of the year."

Overall, leaders at Highmark Health are pleased with the organization's financial performance for the first half of the year and have a positive outlook going forward.

"Highmark Health's strong, consolidated financial results reinforce that our blended health approach and diversified business operating model are solid—both in our core markets and on a national scale," Highmark Health CEO David Holmberg said in a press release shared with HealthLeaders. "Despite challenges affecting the entire healthcare sector, we remain strategically and operationally focused on serving our customers, driving the purposeful execution of our Living Health strategy, and maintaining our holistic capital plan and strategy. We are built to weather these storms."

Editor's note: This story has been updated with a correction to the statement made by Saurabh Tripathi that the debt-to-capital ratio as reported is about 18%, not 80%.